Category Archives: Customer Success Management

Soulmates: Marketing and Change Management

Their eyes meet across a crowded room. Drawing together, they begin a conversation and discover that they have much in common – core values, personality, life goals. They make plans to meet again, filled with wonder at how the hand of fate has seemingly led them to find each other.

Who are these two souls? Marketing and Change Management. Two disciplines that aren’t typically thought of together, but which are in fact very similar in their goals and objectives and who powerfully complement each other when combined. At their cores, marketing and change management are about influencing behaviors and attitudes of a target audience to move it in a desired direction. For marketers, that direction is purchase; for change management practitioners, that direction is adoption of new processes or technologies. The terms change, but the concept is the same: persuade individuals to move from their current state to a desired future state.

There are two ways you can get people to do what you want them to do: force them or persuade them. Needless to say, while there have been times in history when force has been coldly effective, companies in the free world today have to rely on persuasion. This means that they not only need to have a clear picture of where they want their audience to go, but to do this they also need to have a strong understanding of the attitudes and motivations of the audience. This is true whether your audience consists of internal users of a new technology or prospective customers of your product or services.

Whatever the audience and whatever the desired action, marketers and change managers therefore need to begin by making sure they can answer the following six questions:

  • What audience need is addressed by the solution?
  • What is the audience’s current way of addressing that need?
  • Will the audience immediately understand the benefits of the solution?
  • Will the audience need guidance on how to implement the solution?
  • How does the audience typically consume information that relates to this solution?
  • For any of the questions above, are there any significant segments of the audience for whom the answer would be different?

When marketing strategies and change management initiatives aren’t supported by answers to these questions, they fail. The failure might be immediate, or it may be longer term, but ultimately any effort to influence decisions and actions not built on the foundation of this understanding cannot succeed.

At the end of the day, then, marketing and change management are really just two sides of the same coin. For practitioners of either, this should be cause to rejoice as the thinking and experience of both disciplines can be mined for ideas that help improve outcomes. And perhaps both disciplines will end up living together happily ever after.

Advisor Fintech: Three Ideas for Capturing the Promise and Avoiding the Perils

TD Ameritrade Institutional’s FA Insights study (summary here) offers the following nugget regarding firm profitability:

Firms that focused on adding younger clients (under 55 years old) grew 2x faster than other firms…but were 1/3 less profitable than those serving older clients.

This is hardly surprising, as older clients have more assets and are likely to have settled into a consistent servicing process. The challenge is that attracting younger clients is necessary for the long-term health of the firm. Moreover, the asset profile of younger clients is not really something that firms can control so it’s difficult to affect the revenue side of the profit equation. That leaves firms with a need to reduce the costs of acquisition and servicing.

Fintech to the rescue?

The promise of fintech offerings – software that handles functions like client onboarding, risk assessment, financial planning and portfolio management – is to deliver cost savings through automation and digitization of these manual, time-consuming processes. The result: improved profitability.

The problem is that fintech only solves problems once it is successfully implemented. Until that point, it is an investment without a clear return. Even more importantly, software represents a solution for advisory firms, not necessarily their clients. There is a lot of wishful thinking behind the assumption that younger investors will universally embrace technology solutions. In fact, a recent survey of millennials (supported by other surveys as well) reveals that they WANT human interaction.

This isn’t to say that there aren’t plenty of opportunities for firms to introduce cost-saving technology AND enhance the client experience. The client onboarding process – e.g., capturing and transferring of financial documents – is a great example how software can facilitate a quick, smooth transition and lead to greater client satisfaction. But one example does not make the case. Moreover, even software that sits at the “sweet spot” of client experience enhancement and firm cost savings can be a false idol if it is difficult for clients to use.

Pre-empting fintech failure

The point is that just because technology offers the potential for benefits doesn’t mean that it automatically will. Firms need to have a realistic view of the potential benefits and risks and have a game plan for minimizing the possible disruption of valuable client relationships.

We recommend the following as key elements of that plan:

  1. Form a “technology council” – develop a list of trusted and valued clients who represent a cross-section of your client base and solicit their feedback on technology options
  2. Invest in onboarding and training – don’t assume that clients will be able to figure it out themselves; develop materials to make it easy to get started and provide ongoing support
  3. Monitor usage and satisfaction – just because you’re not hearing complaints doesn’t mean they like it; actively seek out information and feedback that can identify issues and best practices

These efforts will go a long way to ensuring that the benefits that should accrue from technology don’t get eroded by unanticipated problems.

Integrating Human and Machine Advice: Current State and Future Requirements

Several recent articles and pieces of news pertinent to robos and advisors create an interesting mosaic of the current state of human and machine advice:

The image created by these items depicts the struggles in the advisory business to settle on a clear, promising strategy for integrating advice channels.

The Limits of Disruption

When robos appeared on the scene several years ago, they were heralded as the future of wealth management, a democratizing blow for the industry, and a mortal assault on traditional financial advice. Any who have seen the hype machine movie before won’t be surprised that none of those things turned out to be true. In the real world, the biggest “robos” in terms of assets are those of Vanguard and Schwab that operate as hybrids while the “pure play” B2C robos have struggled to accumulate assets and breakeven on customer acquisition costs.

The reason for this discrepancy between reality and hype is simple: Irrational as it may sometimes be, most people want humans involved in their financial planning. A 2016 survey conducted by EMI and Boston Research Technologies showed not only that most want human involvement, but also that those who were more open to algorithm-driven investing didn’t neatly map to pre-conceived demographic categories. The bottom line is that you can’t will customers and prospects into following your vision for a service offering. Moreover, making assumptions about their behavior based on intuition and truism doesn’t create a strong foundation for success.

Changing Perspectives

The truth is that the majority of customers want a hybrid model. Many of the leading wealth managers understand this and have implemented or will implement various forms of hybrid offerings. In fact, as I mentioned earlier, the largest robos are actually those launched by existing wealth managers Vanguard and Schwab.

But any business heading down the hybrid path needs to recognize that their old models of and assumptions about client management and messaging will likely need to change. Specifically:

  • If portfolio management is outsourced to machines, it becomes a commodity and value must be defined in terms of relationships and communication—an idea that has been around for some time but which has not gained universal acceptance because it is hard to execute.
  • If you are advocating for clients to use your automated platform, you need to recognize that you are now responsible for their adoption of and satisfaction with the investment management software. Firms and their advisors need to be ready to assist clients onboard, answer their questions, and help them realize the full value of the software.
  • Pushing the wrong clients towards a robo solution is a lose-lose situation that will cost time and assets. Firms and their advisors need to have ways of identifying where clients are likely to fall on the spectrum of interest in and comfort with automated portfolio management, recognizing that age and net worth will likely not be great proxies.