First published in Mortgage Business on 18th February 2018
2019 is shaping up to be a year of firsts for the financial advice industry. Beyond the royal commission, changing consumer expectations and technology advancements are causing many advisers and dealer groups to reconsider the way their firms are set up and the way they deliver services to their clients.
Creating a culture of innovation
Innovation can happen at multiple levels, from business models to internal processes and products/services offered. The key to building a culture of innovation is to explicitly empower everyone in the organisation to think outside the box and question the status quo.
By adopting a “first-mover” mindset and approach to business, innovative practices and dealer groups willingly experiment and apply new concepts and technologies in controlled environments, giving them a distinct learning advantage. Through the application of iterative testing across targeted client cohorts, they gain valuable insights that can then be embedded in every aspect of their business model.
Defining client personas
By carefully defining distinct client groups with similar needs, innovative firms are able to tailor their messaging, hone their service offering and “package” related professional services to drive great outcomes for clients and ultimately, the practice.
In marketing speak, developing meaningful customer personas is the best way to articulate what clients value most, their key challenges, and how to overcome them. Most businesses will have anywhere from five to 20 or more personas, but the most successful businesses are those that have identified a narrow set of three or four and focused their efforts on servicing them as best they can.
It may seem counterintuitive to narrow your scope in order to grow your client base but “crystal clarity” and “fierce focus” is what it takes to stand out from competitors, delight your clients and streamline your business for maximum efficiency.
Articulating a digital engagement strategy
In your quiet time, it would be worth reading an interesting article from McKinsey titled Why digital strategies fail.
The key message: every growth-minded client-focused business owner who has not embraced digital-engagement as a core strategy needs an urgent wake-up call.
Take smartphones: they have become intertwined with our lives in countless ways despite being only 10 years old. According to Deloitte’s 2018 Technology, Media and Telecommunications Predictions report, Australia will exceed global trends, with smartphone penetration surpassing 90 per cent by the end of 2018. Firms that think they don’t need a mobile strategy are at risk of being severely left behind.
A robust digital engagement strategy starts with trust and data. If your clients trust you, they will provide you with data in exchange for relevant, value-adding services. The key here is ensuring clients understand what they’re being offered – with both the royal commission and latest Investment Trends research highlighting the need for more transparency, it’s important to be a trusted “host” that can package timely, value-adding solutions. Today’s technology allows you to combine data insights and tailored personas to proactively connect clients with an ecosystem of well-thought-through products and services (including those of third parties), empowering you with a unique ability to offer the right solution, in the right place, at the right time.
Pick any service-market sector and you will find the emerging dominant players are creating service/product ecosystems. With the customer at the centre and the trusted brand “hosting the party” (as articulated by Jeff Bezos of Amazon), smart businesses are using customer data insights to capture interrelated value that was simply not possible a decade ago. If you are not thinking and acting this way about your market sector, you will soon find new competitors vying for your client’s business that you never thought was possible.
With a clear and focused strategy, firms can set the culture and tone for innovation in their business. Developing a winning and sustainable client engagement strategy may include redefining advisers’ role in an ecosystem that offers new business-value propositions while driving significant improvement in client outcomes.
The bottom line is it involves proactive thinking, planning and the courage to take action while the laggards are still stuck solving the problems of yesterday.
Takeaway thought: “What are the one or two key decisions you will make in 2019 that you will look back on with a smile in five years time that transformed your business?”
By Mark La Bozzetta, myprosperity Enterprise Strategy Manager