Digitise or die

A delightful digital experience is no longer differentiating, it's table stakes.

This is an extract from last week's IMTW.

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Issue № 109 | London, Sunday 29 September 2024

Read on to learn why:

① Failing to deliver digital delight will lose you customers.

② Marketing should be as focused on client retention as it is on acquisition.

③ The FCA’s Assessment of Value report requirement is doing a great job.

④ AI continues to confound regulators.

⑤ KPIs are focused on the big picture; metrics zero in on specific tactics.

⑥ It’s time to reconsider automated prediction systems.

⑦ The AI backlash has begun.

📸 But first, flashback to last week when I told you that a distinctive logo trumps corporate synergy every time. This week, it seems the Magic Circle’s oldest firm, Freshfields Bruckhaus Deringer, ignored my advice. Apparently, the New York-based partners charged with spearheading the law firm’s US presence insisted on a more ‘global’ look - and the results are as uninspiring as you’d expect.

What's new

Investors are prepared to dump their wealth managers if they fail to embrace new technology, Finextra reported this week.

In short:

• “A survey, conducted by investment tech provider Avaloq, found that investors trust the wealth managers that are able to incorporate technology into their offering. Two-thirds (67%) of respondents stated that the ability to see their investment analytics and portfolio visualisation were crucial to building trust with their advisers.”
• “However, despite the finding, wealth managers are still reluctant or unable to use investment advisory tools with clients, stating that the tools are not suited to clients' needs and too confusing.”
• “This disparity is more acute when looking at the UK where almost three quarters (72%) of investors note the importance of portfolio visualisation but only 50% of wealth managers use investment tech with their clients.”

Why it matters

① Losing your customers matters, we can all agree on that. And this survey is just one of three out this week that make one thing abundantly clear: losing customers is exactly what will happen to any financial services firm that doesn’t meet its customers’ expectations of a delightful digital experience.

In banking, a recent survey reports that almost all consumers now regard the quality of digital products and services as the critical factors in their selection of a bank – on par with security and customer service, and much more than interest rates, fees, branch availability or anything else. Similarly, research commissioned by CRIF revealed a shift towards digital banking among UK consumers, underlining a dropping interest in bank branch proximity. Only 23% of UK adults consider having a nearby bank branch important when deciding on a financial provider.

Digital isn’t a nice to have, it’s a must-have. Why then are the majority of UK-based financial firms risk-averse when it comes to new technology? There are tech-related pain points of course - the persistent lack of integration between systems, the inability to hide sensitive information and the difficulty of navigating systems - but demand from clients is only going to increase. If financial services firms want to remain competitive, they must digitise.

② What has this got to do with marketing, you might ask. It is notoriously difficult to measure the impact of a lot of marketing activity (see Media & Marketing below). Teams typically report metrics like reach, engagement, and - yes - leads. But even if your marketing is delivering plenty of new business, it will count for little if your client attrition rates are high. Keeping a client happy is easier - and less costly - than finding a new one to replace them when they leave. Marketing should be just as focused on client retention as it is on client acquisition.

What to do about it

Take action

If your marketing team is already involved in developing your digital client experiences from a branding, copy-writing and tone of voice perceptive, then congratulations. You would be amazed how many firms don't even do that. But there's much more to be done.

Your head of marketing should be responsible for - or, at the very least, consulted about - every single client touchpoint. Use your marketing team's expertise to ensure that the user experience is consistent with everything your brand has been until then, that it's easy and feels like it was designed by humans who want to help. Make sure it delivers on all the promises that have been made and that a human adviser is readily available if needed.

Have a chat with your head of marketing this week. If you’re not already doing so, there are two obvious improvements you could make together:

1. Involve marketing in client retention: Marketing should have a say in every single interaction a client has with your brand. This is very much part of keeping a client happy. Whether it be through events, relevant and valuable communications, or simply a delightful digital user experience, marketing has a critical role to play in ensuring that a client feels proud about their decision and - whisper it - might even recommend you to their friends.
2. Work customer lifetime value into marketing’s metrics: Most firms will have a stab at measuring return on marketing investment by producing metrics like ‘cost per click’ or ‘cost per lead’. Some even measure ‘cost per new business’. But it’s worth making sure you have a precise ‘customer lifetime value’ in those metrics. Not only does it make your KPIs closer to financial reality but it will focus your marketing team on drawing out the all important length of that lifetime.

Get help

InMarketing is a dynamic repository of help for senior leadership teams in finance or technology who want to drive growth. Browse others’ ideas, find tactical support, or leverage marketing advisory.

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To learn why:

③ The FCA’s Assessment of Value report requirement is doing a great job.

④ AI continues to confound regulators.

⑤ KPIs are focused on the big picture; metrics zero in on specific tactics.

⑥ It’s time to reconsider automated prediction systems.

⑦ The AI backlash has begun.

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About

Written for senior leadership teams in finance and technology, InMarketing This Week is a showcase for news likely to impact you - delivered with insight on why it matters and ideas on what to do about it. It’s published every Sunday at six to give you a head start on the week. Read extracts here, or subscribe to have each full issue delivered straight to your inbox, before it's available anywhere else.