Piles of coins increasing in size through right retirement choices

How does financial marketing work?

  • How marketers use psychology to convince customers
  • Tricks to watch for when choosing financial products
  • Test how savvy you are to financial marketing tricks

Financial brands spend millions on marketing to you every year. They use well-known psychological devices to persuade you - but do they work? We showed examples of the following marketing tactics to a panel of more than 3,300 people, with some surprising results. It was clear that psychological tactics used by banks and insurers influence choices. Take the following test to find out how savvy you are when it comes to financial marketing.

Can you spot the best deal? Take our test

Click on the 'More info' panels to reveal how the tricks work, when you've answered the question.

Question 1

Q: Put these offers in order according to whether they provide the best deal over two years.

AMore info

This is the best option over two years - as the rate is unlikely to go down within that time, a fund of £100 will be worth £103.53 after two years.

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BMore info

This option is the second best - a fund of £100 will be worth £102.81 after two years.

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CMore info

This option is third best - a fund of £100 will be worth £102.76, unless you switch after two years. However, many savers fail to switch when their rates go down - and marketers know this.

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Correct!

Incorrect!

Answer: 1. A, B, C

Inertia is one of the key human traits marketers play upon - this's why so many people fail to switch their Isas, even when they know they'd get a much better deal elsewhere.

Question 2

Q: Which of these offers the best value?

AMore info

This is an example of a social norm - fear of missing out makes us more likely to buy.

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BMore info

This simple appeal to call for a quote relies solely on the image of the smiling couple - who, it's hoped, the customer identifies with.

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CMore info

By naming 'Lucy' the marketers are hoping customers identify with the woman in the photo - making them more likely to buy.

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Correct!

Incorrect!

Answer: 1. They're all the same

Norms are a key driver of human behaviour - numerous studies have shown that we're influenced by the behaviour of those around us. Marketers know this and often attempt to appeal to the herd mentality that's an essential aspect of human nature.

Question 3

Q: Which of these offers the best value?

AMore info

Despite the fact that '12 months for the price of 9' means the same thing as 25% off, we found that the time-related discount was more attractive

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BMore info

Framing this product as a 25% discount suggests that the customer is getting a special deal.

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CMore info

This may seem less attractive, however, as no price is actually mentioned, we have no way of knowing whether it's a worse deal than the others

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Correct!

Incorrect!

Answer: 3. Impossible to tell

The way something is expressed - or framed - can make all the difference. Despite the fact that there is no indication of any actual difference in price between these products, framing them as a discount made them more attractive to participants in our study.

Question 4

Q: Which of these adverts is the most trustworthy?

AMore info

This advert bears a false crest created by our design team - it's meaningless.

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BMore info

This advert contains the Financial Services Compensation Scheme crest - which guarantees your savings up to £85,000 if your provider goes under.

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CMore info

This advert does not feature the Financial Services Compensation Scheme crest - you'd need to check that your provider is covered.

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Correct!

Incorrect!

Answer: 2. B

Crests confer status on a product. They are a form of 'heuristic' - a rule of thumb - by which we can save time. Marketers try to profit from this human tendency, knowing that we have busy lives and must use rules of thumb all the time. This's why its important to know the difference between reliable crests such as the Which? crest or that of the FSCS, and the entirely false one depicted above.

Question 5

Q: Which of these is the best deal?

AMore info

This image of a smiling couple is intended to reassure you - this works to convince many people that the product is attractive.

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BMore info

This image suggests you will get rich with this product and appeals to the product's purpose - increasing wealth, rather than to our emotions.

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CMore info

No image here - but the product is exactly the same.

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Correct!

Incorrect!

Answer: 3. They're all the same

Numerous studies have shown that displaying particular imagery next to products makes them more attractive - especially if they're designed to play on one's emotions rather than intellect. While we suspected the 'logical' image of a piggy bank, denoting wealth, would have some effect in making a savings product seem more attractive - it's actually the less rational image of the couple that was most attractive in our experiment.

Top 5 tips for reading between the lines

Just one click away

Advertisers know that consumers find choosing and purchasing financial services a hassle. They therefore offer products that are ‘just one click’ or ‘a quick phone call’ away. Balance convenience with price and suitability when making your choice.

Pressured sales tactics

Treat any sales encounter like a session with a clairvoyant. Salespeople use the subconscious cues you provide to convince you to buy, and buy from them – immediately. Ignore unsolicited calls, emails or encounters. Purchase according to the needs that you've already identified.

Brand power

Be conscious of the ubiquity of brands. For example, many financial providers sponsor major events, aiming to keep their brand in your mind by showing their logo prominently and often. Don’t reject lower-profile brands. Our research shows that they're often better value.

Celebrity cameos

Some persuasion is non-verbal. Celebrity voiceovers and appearances, as well as puppets and soft toys, are used by  to strengthen their message. Though some of these tactics are subtle, ignoring the obvious ones is a good start.

The fear factor

Some marketing plays on our need for safety and security, promising to prevent the worst happening, from covering you after a flooded house to helping you feel more financially secure in old age. Make sure you evaluate offers with attention to your specific requirements.

Tell us any misleading marketing you've spotted

Help us crack down on misleading or confusing marketing messages by telling us about them in our questionnaire. They can come from any type of financial literature - from terms and conditions to online marketing. 

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Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.