Anti-hawking laws come into effect in Australia as of 5 October 2021 which means many finance brands, including insurance companies and superannuation firms, will be unable to cross-sell products. We outline what the anti-hawking legislation means for finance brands and how best to navigate the changes.
What is the anti-hawking legislation?
Following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, The Australian Securities and Investments Commission passed legislation that states: “Under the Corporations Act, a person (the ‘offeror’) must not offer financial products for issue or sale in the course of, or because of, an unsolicited meeting or telephone call.”
Put simply, finance brands like insurance companies or superannuation firms can’t cross-sell products to customers from 5 October 2021.
“ Put simply, finance brands like insurance companies or superannuation firms can’t cross-sell products to customers from 5 October 2021. ”
Why was the anti-hawking legislation brought in?
The Royal Commission wanted to eliminate consumers being pressured into and being sold ‘bolt on’ products or services that they didn’t need or couldn’t afford. Consumer Action CEO Gerard Brody reports that the legislation is being put in place to stamp out “cold-calling people to sell low-value insurance or bundling junk products”. Ultimately, the legislation is being put in place to protect consumers and help deliver a level of transparency.
How to prepare for the anti-hawking legislation
Review your organic customer journey
Anti-hawking provisions mean it’s a great time for finance brands to review their customer journey and map out when sales teams get in touch with customers. When reviewing the customer journey, rather than relying on cold calling which many customers don’t engage with, instead consider the role content can play to educate customers and drive an organic journey through your blog, website and product information. Look at ways to support rather than sell to your customers, with relevant resources and information ultimately serving to build a longer and stickier relationship over time.
Explore lead generation
The anti-hawking legislation states that in order for a consumer to have consented to additional products or services, “they must make a positive, voluntary and clear request to be contacted about financial products”. Financial marketers could also use this as an opportunity to develop lead generation content so customers are actively seeking them out and leaving their contact details to find out more. This will not only help identify customers who have consented to being contacted but also funnel enquiries direct to sales teams
ASIC reports that consent is valid for six weeks, so financial marketers need to ensure they’re acting quickly to stay in touch with consumers who have volunteered their contact details. Ensuring a more streamlined customer experience, gone will be the days of receiving an email from a company you don’t even recognise because you signed up for a product of theirs 3 years ago. The anti-hawking legislation should see consumers receiving timely information about products that are relevant to their interests and needs.
Broaden your channels of communication
The anti-hawking legislation only targets unsolicited calls or meetings which means there’s still ample digital channels and opportunities to deliver content and communications to customers. Regardless of what channel you’re communicating via your customers’ needs and interests should always be front of mind, and any content you deliver should offer value and guidance rather than being an outright product push. Email marketing could be the answer for a lot of finance brands who are able to segment audiences to deliver timely and relevant messages about products and services.
Financial marketers should also look to expand to digital and social channels to help target audiences and also retarget and re-engage customers that have shown interest in a particular topic or product on your site. Tara Cimino, senior paid media specialist at The Dubs shares her thoughts on how a targeted social media distribution strategy can drive engagement and direct customers to product information.
If you want to find out more about how The Dubs can help you navigate anti-hawking legislation and make sure you’re still able to share the value of your products with customers in the right way, get in touch.