Reimagining the Client Experience In The Face Of Commoditization
It’s no secret that the influx of technology over the past decade has created tremendous competitive pressure across nearly every industry. From auto parts to airline travel, technology has accelerated the race to the bottom for any products no longer able to compete on much besides price. Financial services firms are starting to feel the crunch too. In an age when consumers increasingly view financial service providers as interchangeable, how can we, and others in our position, head off the threat of commoditization and reposition ourselves for success? Reimagining the client experience is our greatest opportunity — rethinking the services we provide, how we deliver them and what we ultimately enable for the client.
I often use the example of the iPhone in this context. When it debuted, the services the iPhone provided — a cell phone, a camera, a web browser, a map — were not new themselves. But the delivery of those services in a holistic package from a cell phone provider, the experience of using them and the things it made possible for users were truly revolutionary. Financial services must think boldly about the ways we can deliver our largely commoditized suite of products and services in new ways that, like the iPhone, engage users and unlock opportunities that weren’t previously available to them.
So what does an ephemeral goal like reimagining the client experience look like in practice? In a 2016 article, EY Global Banking & Capital Markets Deputy Sector Leader Jan Bellens sums it up well when he says that creating client engagement “requires excelling on both strategic and operational dimensions, as well as connecting with customers on an emotional level.”
Operational efficiency is critical in that it eliminates friction in the user experience. Well-designed interfaces, responsive customer service, error-resistant systems all ensure seamless delivery of service and a pleasant customer experience. But perhaps even more importantly, efficient processes allow firms to focus less on the many transactional elements of a banking or wealth management relationship and more on the client touchpoints that create deeper engagement.
In the digital age, most financial services companies have simply digitized their traditional, brick and mortar experience. But that linear shift from analog to digital is not enough to support legacy business models when the market has shifted so drastically. Operational efficiencies, including automation where appropriate, allow financial service firms to re-envision their role in their clients’ lives, including considering the nonfinancial services they may be well suited to provide.
Fostering a “connected community” of clients and partners is one such idea. In my experience working with high-net-worth and ultra-high-net-worth clientele, I know that they often come up against similar questions or challenges, often ones for which helpful resources are not readily available. They also are eager to understand how their strategies and interests compare to similar individuals and families. Financial service firms are uniquely positioned to tap into their networks to create opportunities for clients to share ideas. Whether in-person programming, an online system or something else completely, creating opportunities for clients to connect and learn from one another and from your team of experts and partners provides an invaluable resource distinct from the traditional suite of services but importantly linked. The ability to deliver a network of perspectives— whether it’s consulting on their children’s education, helping them make new business connections or supporting their interests in collectables or philanthropy — has the potential to create tremendous brand affinity and loyalty. It moves you from a service provider to a trusted advisor and creates that emotional connection necessary for real client engagement.
The key to reimagining the client experience in a meaningful way is to understand the core of what we do for clients. We help them achieve their personal and family life goals. At Boston Private, we talk a lot about understanding our client’s motivations, the “why of wealth.” By understanding clients’ deeper goals and motivations to create wealth, not only are we able to tailor a better financial plan, but we are able to uncover new ways to help them achieve those goals and add value to their lives in ways previously unimaginable from a financial services provider.
Competitive pricing alone won’t keep customers. Financial services firms and other industries facing the threat of commoditization can better position themselves and better serve their clients by mastering operational efficiencies, thinking strategically and creatively about new services and their delivery, and connecting on an emotional level. Commoditization is a real threat but winning companies will use it as an impetus to recreate themselves.
This article was originally published on Nasdaq’s MarketInsite blog.
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