VUCA World
We live in a VUCA world. And as
you know, VUCA starts with Volatility. There is no industry where volatility is
as transparent as the stock markets. With stock prices changing tick by tick,
you can monitor the ups and downs of your portfolio every second. Access to technology
via stock market apps and 24x7 media/social media news has made this even
easier in recent years. This volatility leads to increasing investor
restlessness. Who wouldn’t be restless when you see your hard earned money
going up and down second by second? It’s only a matter of time before smart-watch
based stock market apps synch your portfolio with your heart rate monitor!
While volatility has always been
a part of investing, in the recent years this has shown an increase With the
euphoria of market performance in CY2017 followed by the see-saw conditions in
CY2018 and while not apparent in the Sensex performance (at all-time highs; but
driven by only 4-5 stocks), the broader markets in CY19 have seen peoples
portfolios getting hammered . This market volatility can be seen in the
increasing Volatility Index.
Source: NSE Website
Brand Challenge
Increasing volatility has led to
increasing challenges for financial services. It is a known fact that while
investments maybe a rationale decision (based on company earnings, performance,
track record etc); investor behaviour is emotional. Infact, investing is based
on two key emotions – Greed and Fear. The ability to not be swayed by euphoria
or not deviate from your investment strategy during transient underperformance
is what distinguishes a successful investor. Like advertising, investing too is
based on emotions. These emotions oscillate daily during times of volatility.
Typical brand planning requires a consistent message communicated over time. A
level of brand consistency builds brand trust. Managing volatile investor
expectations/emotions while providing a relevant message is what would make
brands stand apart. But how do brands stay relevant in terms of volatile times
without sounding schizerophreniac?
How can brands
survive and thrive in volatility?
To start with, brands must
realise that the stock market is like a cardiogram. It has its ups and downs.
If it becomes flat; it dies. So rather than get intimidated by volatility, financial
brands need to embrace it. In financial services, this can be done by
addressing needs of different customers by their investment horizon and state
of evolution as investors.
Customers can be segmented by:
1.
Investment Horizon: Just as some people prefer
watching a slow and steady Test match while others prefer watching dhana-dhan
20-20, there exist Long Term Investors and short term Intraday/Positional
Traders. Needs of these two segments differ in terms of expectations, risk
appetite as well as products
2.
Need for advice: Based on how evolved they are
and the level of control they want, there are some investors who completely delegate their investing
decisions (Delegators) while some who may need advice but take their own
investing decisions (Validators) . There also exist a set of completely DIY (
Self Directed)
Different products and education
campaigns need to be created for each of these mind-states, given volatile
conditions. For example, in times of volatility, a long term Investor who has
delegated his money to a mutual fund needs to be educated on the need to Buy
Right and Sit Tight. While a Self Directed Trader whose complete capital can
vanish with a volatile trade needs to be educated on the necessity to keep a
Stop Loss.
From a communication point of
view; brands need to adapt an agile approach by creating a mix of
focused/topical messaging for various market conditions. As these messages
would change frequently they need to be held together with a distinctive brand
personality and brand idea. Quite like the different verses of a song held
together with a common hook/chorus.
Over a period of time, topical
brand messaging with a distinct brand look and feel under a master brand idea
not only builds relevant communication, it also differentiates.
This approach is what we have
followed through our various communication messaging for Motilal Oswal over the
past 3 years. We have adopted a master brand proposition of an “Equity
Investing Expert” and come out with focused and topical messaging that is
relevant to a particular time in a volatile market. The common brand line (Think
Equity Think Motilal Oswal) and distinct brand personality has been maintained
across various market conditions.
For eg. when markets are buoyant,
everyone was looking to invest in equity (either through stocks or equity
mutual funds/PMS). The brand messaging hence revolved around the fact that
incase you are thinking of investing in equity, invest through the experts who
have only been focused on equity for over 30 years. (See campaign here)
When markets turned volatile, the
messaging changed to the fact that volatility can unseat most people. You need an
equity expert to pick the right stocks and have the discipline to hold onto
them i.e Buy Right. Sit Tight. (See campaign here)
When markets underperform and
investors lose money due to investing in penny stocks, we created a campaign on
the need for investing in Quality businesses/stocks as those are the ones that
create wealth over the long term.( See campaign here)
Even for different customer types
(Investor / Trader), we created different mobile apps to give them a customised
experience based on whether they were Delegators/ Validators/Self Directed (See
ad Here )
While advertising creates the
brand messaging at an overall level, we also continuously come out with
thematic studies based on the market conditions (See Wealth Creation Studies Here
)
Even though the messages seem
disparate, each communication provides the investor with relevant and topical equity
messaging. A common brand personality and executional elements ( music, use of
experts in their fields, , tag line etc) has been used to provide brand
consistency. We have also consciously stayed away from clichéd BFSI category
imagery (happy family, dream fulfilment etc) for differentiation and executional
cut through
In summation, Equity penetration
in India is less than 5%. As penetration increases, there would be a new set of
customers with little experience in terms of handling market volatility . With Volatility here to stay, brands that provide customers
with the knowledge and education to not just survive but thrive in volatility (rather
than be intimidated by it) are those that would succeed over a period of time.
