As the economy stablises, consumer sentiment is all about trusting in our future together, writes JP Hughes.
It always amazes me how quickly a year can pass. From the long dark nights in January when we thought the winter would never end, to mid-summer and the longest day of the year. However, even in the depths of the winter there was some brightness as our turbulent economy continued the process of stabilising and consumer sentiment remained on its upward journey.
Time also flies when it’s busy and it is certainly true to say that the first half of 2015 has been exceptionally busy, challenging and productive in Friends First. While consumer sentiment is improving there has been little change in consumer spending patterns and in the uptake of spend on financial services products. However, we believe that as incomes start to rise again, it is a good time for people to begin reviewing their financial circumstances and ensure they are planning for the future once again.
Although there is a certain level of optimism in the market, a great deal of caution still remains. According to the most recent Consumer Sentiment Index, the proportion of respondents expecting the general economic situation to improve over the next 12 months fell slightly. However, this is primarily attributed to consumers adopting a more cautious attitude with regard to the economic outlook, and to a degree, smooths the overall view and removes some of the monthly volatility which would give us a more realistic overall picture.
While conservatism remains high, the falling deposit rate environment is leading to more investors telling us they are willing to take on some risk to seek returns. However, this coincides with increasing concerns as to whether bond and equity markets may have reached full value.
Given this economic backdrop and the hesitancy that consumers are showing, it is important for those of us in financial services to ensure we engage with consumers in a meaningful and proactive way to alleviate their concerns – and not only encourage planning for their financial future, but to educate as to the importance and value in doing so.
An important element in instilling trust with consumers is the strength and meaning to them of a brand. People don’t have relationships with products – especially not intangible, functional products such as those we offer – but they are loyal to brands. Trust in financial services has taken a beating over the past few years and it is now time to invest in our brand and ensure that consumers put a value on its credibility.
To this end we have created a new brand advertising campaign, ‘Amongst Friends’ aimed at enhancing the Friends First brand by communicating the values of friendship and trust. Underpinning the brand is a set of core values, among them friendship, trust and support. The new campaign supports our strategic push to connect with our clients and communicate messaging about both pensions and investments as well as income protection.
This campaign is the result of a major investment which demonstrates the value we place on creating a strong brand and is an important milestone in the Friends First story. This level of investment is clear proof that Friends First has the ongoing support of Achmea, our parent in the Netherlands, in achieving its ambitions and that it is fully committed to the Irish market.
Achmea have stated that they see opportunities for further value creation and premium growth in Ireland and are looking to strengthen ties with their partners in a more structured and cohesive way. Investment in technology and innovation are key areas that Achmea is progressing in order to strengthen its position as a customer-focused organisation and these are areas where Friends First will benefit from on an ongoing basis.
So with the economic and consumer sentiment improving, there is certainly light at the end of the tunnel. It is now time for us to ensure we are ready to meet the demands the improving economy places on us, and the expectations that consumers have. It is still a challenging time but we are starting to see the rewards and it is exciting to be a part of this bright new future.