The question of how to manage one’s finances is a deeply personal one. The journey is often wrought with emotion and anxiety over whether consumers are making the right choices, anxiety that can lead to inertia that precludes consumers from making strides towards their financial goals. Microsoft Advertising partnered with Ipsos OTX to investigate this complex journey. Our study explores consumers’ attitudes towards financial decision-making, how goals span different life stages as well as the people, media and technology influencers along the path to financial security. Along the way, we uncover opportunities for media, technology and brands to enable confidence, provide control and build trust with consumers as they tackle their financial goals. 1 Contents 2 I. Introduction 3 II. Approach & Methodology 5 III. The Stages of the Financial Services Consumer Decision Journey 8 IV. The Goals: Short, Medium and Long Term 10 VI. Privacy and the Value Exchange 23 VII. Marketer Implications 25 I. Introduction 3 4 II. Approach and Methodology Online Blogs In-Depth Interviews In-Market Questionnaire 5 We look to understand how influencers play a role in fulfilling key consumer need-states as they move from stage to stage, Personalization, Enrichment, Validation and Information. Personalization How does this fit into my life? Enrichment Information Does this feel right? How do the facts stack up? Validation Am I making the right choice and will others think so, too? The four primary need-states are further broken out into more specific needs by goal and path, to help identify the top consumer need-states and surface how well various influencers are meeting those needs. Thinking about what might work, what the product(s) would do for me Gaining approval or support for my choices, ideas or actions Visualization Comprehension Discovery Investigation Enrichment Validation Imagining or visualizing (dreaming about) what I want or need Confidence Validation Enrichment Getting specific information I need to fill gaps in my knowledge Projection Information Simplifying/making sense of the details I have to help me choose Personalization Getting ideas / discovering what feels right Gaining a better sense of the products or services I’m considering Gaining confidence or reducing risk in making choices / what I was doing In cases where consumers have a need that is not being met, we highlight opportunities where media, brands and technology can enable better decision-making. 6 To uncover deeper motivations behind goal setting, we asked consumers a series of questions related to their reasons for starting a goal and what the goals represent to them when it’s completed. We asked consumers to complete this thought… Enjoyment Conviviality Belonging Like anything is possible Joy or happiness A sense of togetherness Daring A feeling of community or neighborliness A sense of comfort A sense of fun, enjoyment Laughter, comedy, humor Joy or happiness Like I can let my guard down or be silly Reassured A sense of togetherness Control Recognition Power Safe In control Like I am being technologically advanced A sense of pride in achievement Organized and on top of things Expert. Pioneering A sense of commitment Standing out in the crowd A feeling of strength Like I am being technologically advanced A sense of pride in achievement The buzz of achievement Security Vitality Reassured The buzz of achievement A feeling of trust On top of the world Simplicity A feeling of being alive— an adrenaline rush Safe In awe of aware of what’s possible in the world 7 III. The Stages of the Financial Consumer Decision Journey The Consumer Journey: Financial Services identifies two types of decision paths – Passive and Active. Consumers who approach the decision with less confidence, knowledge and initiative will often slip into the passive stages and can stay there until a disruption happens. The Passive Path OPEN TO POSSIBILITY DECISION TO BUY/CHANGE EXPERIENCING Consumers who approach the decision in a more confident state can bypass the Passive path. But more commonly, consumers are jolted into the Active Stages through a disruption, shock or by a buildup of angst. They wake up to a realization that something needs to change, work out what needs to be done, put a plan in place and acquire products to help reach the goal. The Active Path OPEN TO POSSIBILITY 8 DECISION TO BUY/CHANGE EVALUATING SHOPPING EXPERIENCING 9 “As emergencies happened I was not prepared for them and had to borrow money. I do not want to be in that position again unless I absolutely have to.” - Male, 43 10 Appeal to underlying motivations to inspire action Consumers’ experiences often set the stage for how they approach a financial goal. Lessons learned from parents/people influencers, earlier experiences and their own personalities can define how actively or passively consumers approach their goal/decision. In addition, specific motivations are tied to specific goals and when motivations are triggered, consumers become aware of a need to act. Playing on specific motivations can help consumers realize they need to put a plan in place. 75% 70% 70% 65% 55% 50% 46% 27% Control Security Long-Term: Retirement Power Belonging Recognition Enjoyment Conviviality Medium Term: Home Improvement Short Term: Emergency Fund Security +20 Security +11 Recognition +7 Control +13 Control +6 Belonging +4 11 Vitality +5 Belonging +11 Vitality Consumers often find themselves juggling multiple goals. To add to the worry, day to day spending takes up the majority of their funds. It’s no wonder that when you look at the allocation of worry to actual spend, financial goals take up a much higher share of consumers’ stress. Consumers need a way to better understand their whole financial picture and the tradeoffs their actions trigger. Retirement 78% Pay off debt 74% Emergency fund 64% Vacation fund 53% Savings target 40% Home improvement 38% College fund 33% Home deposit 18% Car deposit 16% Inheritance 16% Career break fund 10% Move out fund 10% 12 Average # of goals/person: 4.5 % of consumers with goal (<6 yrs completion) Move Other Out Fund 6% 6% Down Payment Car 7% Savings Target 8% Emergency Fund 30% Vacation Fund Home Down 11% Improvement Payment 16% House 15% 13 “I have always lived paycheck to paycheck…a few years ago I started reading more financial articles and I think it is really important to have a cushion in case of emergency.” - Male, 41 Personalization 46% 44% 36% 33% 31% 31% 31% 16% Visualization Investigation Confidence Discovery Information Enrichment Comprehension Projection Validation 80% Weak Visualization/ Strong Investigation Bank site 22% 60% Acct Info 30% 40% Financial news site 21% 20% 0% Work 34% Spouse/ partner 72% Weak Visualization/ Weak Investigation 0% 10% Travel 20% Strong Visualization/ Weak Investigation 20% 30% Showing all influencers mentioned by at least 1 in 5 consumers %s/size of bubble indicate reach of influencer 14 Strong Visualization/ Strong Investigation Search 27% 40% 50% 60% Personalization Visualization Projection Investigation Comprehension Confidence Enrichment Discovery Validation 60% Weak Visualization/ Strong Projection Strong Visualization/ Strong Projection 50% Acct info Bank site 31% 40% 42% 35% 32% 31% 29% 29% 27% 16% Search Work 27% 37% Financial news sites 22% Spouse/ partner 69% 25% 30% Travel 22% Email (friends) 25% 20% 10% Weak Visualization/ Weak Projection 10% 20% Strong Visualization/ Weak Projection 30% Showing all influencers mentioned by at least 1 in 5 consumers %s/size of bubble indicate reach of influencer 15 40% 50% 60% 16 % of consumers with goal (>15 yrs completion) Other 12% Down Payment House 8% Savings Target 9% Emergency Fund 38% College Fund 9% Home Retirement Improvement 12% 12% “I would like to have an emergency fund so I don't have to be stressed out when something happens with my car or house or health and I don't have any way of paying for it.” - Female, 28 What’s stopping you from doing more? (Among consumers who feel they aren’t doing everything they think they need) Passive Active 35% 26% Negative thinking +10 17 Putting it off +4 Personalization Visualization Investigation Confidence Projection Information Discovery Comprehension Enrichment Validation 80% Weak Visualization/ Strong Investigation Financial news site 22% 60% 40% 39% 34% 33% 33% 31% 28% 13% Strong Visualization/ Strong Investigation Search 27% Acct Info 30% 40% Bank site 21% 20% 0% Work 34% Weak Visualization/ Weak Investigation 0% 10% Email (friends) 20% Strong Visualization/ Weak Investigation 20% 30% Showing all influencers mentioned by at least 1 in 5 consumers %s/size of bubble indicate reach of influencer 18 Spouse/ partner 72% 40% 50% 60% Personalization Confidence Comprehension Investigation Visualization Information Projection Enrichment Discovery Validation 50% Validation Weak Confidence/ Strong Comprehension Strong Confidence/ Strong Comprehension Acct Info 31% 40% Financial news sites 22% 30% 10% Spouse/ partner 72% Bank site 25% Search 27% Email (friends) 25% Travel 22% 20% Work 44% Weak Confidence/ Weak Comprehension 10% 20% Strong Confidence/ Weak Comprehension 30% Showing all influencers mentioned by at least 1 in 5 consumers %s/size of bubble indicate reach of influencer Top needs shown with biggest gaps (opportunities to fill white space) 19 42% 37% 37% 37% 37% 32% 29% 13% 40% 50% Long 20 % of consumers with goal (>15 yrs completion) Other Savings 8% Target 7% College Fund 11% Emergency Fund 13% Retirement 60% “…I am close to that age to retire and I don't know if I have enough saved to ensure that I can live comfortably the way I am now.” - Male, 62 Why consumers decide to act Passive Active Worried about the economy 41% Want to be financially independent 40% Tired of living paycheck to paycheck 35% Want to maintain current standard of living Need to put some money away where I don't touch it Want to make sure my family is provided for Concerned about my job security Used up all my savings on a past emergency or issue 21 32% 29% 27% 24% 23% Investigation Confidence Projection Visualization Information Comprehension Enrichment Discovery Validation 80% Weak Investigation/ Strong Confidence 60% Financial news site 37% Spouse/ partner 69% 40% Email (friends) 21% 20% 0% Validation Travel 21% Weak Investigation/ Weak Confidence 5% 15% Email (FI) Bank site21% 20% Magazines (content) 24% 35% 45% Showing all influencers mentioned by at least 1 in 5 consumers *Among those with Advisor %s/size of bubble indicate reach of influencer 22 Strong Investigation/ Strong Confidence Acct Info 43% FS brokerage site 26% Mailed statement 34% Work 45% 25% 43% 41% 39% 34% 34% 33% 25% 12% Newspaper (content) 29% 55% FA* 52% FA Office* 53% Search 21% Strong Investigation/ Weak Confidence 65% 75% 85% Personalization Projection Confidence Investigation Visualization Information Comprehension Enrichment Discovery Validation 50% Weak Projection/ Strong Confidence 30% 10% 0% Strong Projection/ Strong Confidence Mailed statements 29% Email (friends) 22% Acct Info 44% 40% 20% Validation Work 45% Bank site Newspaper 21% (content) Weak Projection/ 25% Weak Confidence 15% 25% FS brokerage sites 24% FA* 44% Spouse/ partner 61% Fin TV programs 19% Search 19% Travel 21% 35% Showing all influencers mentioned by at least 1 in 5 consumers *Among those with Advisor %s/size of bubble indicate reach of influencer 23 41% 39% 38% 31% 29% 28% 28% 10% Financial news sites 29% Magazines (content) 24% Strong Projection/ Weak Confidence 45% 55% “I really don't like sharing my personal information with people or institutions that I don't know, since I don't want to be solicited with things I don't need or want.” - Male, 62 24 What would make you more likely to share info? 67% 58% 53% 53% 38% 10% Full knowledge Stop or delete Info Restrict specific Get reward or None of these & control at any time anonymous/not companies benefit from it tracked to me seeing it When consumers see the benefit of the value exchange, they are also more likely to feel empowered I understand the benefit/value of sharing my information % who say they are confident they are taking all the action they need 66% 41% 31% Importance 25 Satisfaction 29% Satisfied Not satisfied VII. Marketer Implications Provide the 3Cs: Clarity, Control, Connection Clarity “”[I want] clearer fine print. [Tell me…] do this. Don’t do this. Clear risks listed.” - Female, 61 26 Provide clarity to build confidence. • • 27 Guide consumers with personalized signposts showing them how they are doing and how day-to-day fits with longer term priorities. Enable Visualization and give context to longer term goals by juxtaposing them with shorter term goals, which are easier for consumers to digest. but allow the tool to grow as consumers’ knowledge and confidence grows along with it. • Give consumers a view of how different decisions can lead to different outcomes. Fulfill both the need for Projection and Information by providing digital tools that allow them to customize different scenarios. Allow basic calculations for those seeking less complexity, Give examples that can help them envision success with their goal (Visualization and Projection). Personal stories can help connect consumers to scenarios that are closest to their situation and give them ideas on where to start or where they need to be. • Inspire and trigger action using emotional messages that speak to why consumers seek to complete goals. “[I wish I had] more control of my personal info, more incentives, better interest rates, more info on new products and promotions.” - Male, 45 Control 28 Enable a sense of control over their plan and their information to battle inertia. • 29 Bad experiences can trigger negativity and feelings of helplessness. Help consumers feel empowered in their approach and steps they need to take by fulfilling Investigation and Confidence. Provide balanced information through third-party sources or link to experts that consumers trust to give them a sense of the big picture. • Be transparent about the value exchange – don’t assume consumers know what you can and can’t do with their information. Enable simpler terms of service. By shedding some light up front about what personal information is being used, marketers can better fulfil Confidence that consumers have the right partner in place. “If [access to a simple advisor service] were available in any local banks [in person or web chat] I would gladly pay for the services, and, assuming I had a positive experience with the advisor, I would be likely to move all of our available banking services to the bank in question.” - Female, 45 Connection 30 Connect at the right moments to reassure and build up trust. • Start slowly with new customers – fewer are willing to share deep information, but can be open over time. • Don’t let consumers build up anxiety over your role – out of sight is definitely not out of mind. Validate along the way to reinforce the relationship. 31 • Reward consumers for loyalty while fulfilling Projection. Providing specialized services such as alerts to better products and rates are welcome. Benchmarks that allow them to see how products stack up can be even better. While many tech and media companies conduct market research that describes what consumers are doing, the Microsoft Advertising Consumer Insights team believes innovation stems from getting to the why. As a result, we take a consumer-centric approach. We go beyond behavior to focus on why consumers do what they do—whether that’s choosing one brand over another, or exhibiting a preference for a specific platform. Our goal is to humanize digital behavior and motivation, enabling brands and agencies to put consumer needs at the center their marketing strategies. Contacts: Natasha Hritzuk Sr. Director Global Consumer Insights [email protected] Ivy Esquero Consumer Insights Manager Thought Leadership [email protected] Kelly Jones Head of Thought Leadership Global Consumer Insights [email protected] Esther Burke Consumer Insights Manager Thought Leadership [email protected] ©2013 Microsoft Corporation. All rights reserved. This document is provided “as-is.” Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. You bear the risk of using it. Some examples are for illustration only and are fictitious. No real association is intended or inferred. This document does not provide you with any legal rights to any intellectual property in any Microsoft product. You may copy and use this document for your internal reference purposes. 32