Today, especially in a pandemic environment, all financial firms are striving to improve their business models with technology-driven strategies. Over the past two years I attended the Executive Education program at MIT’s Sloan School of Management – the program combines the best of two worlds by offering the opportunity to learn from world-renowned professors at MIT while also exploring case studies created by Harvard Business School. As asset managers and fintech firms embrace digital strategies and marketing tools, here are four ideas that may be applied to help your firm succeed.
- Create value-add through digital tools. How can firms add complimentary digital tools to their products and services to further engage their customers? This is one of the most prevalent challenges distribution teams are facing. Your firm’s products may have better performance returns than those of peers but yet continue to lose market share. BlackRock jumped into the fray as a leader with its offering of Aladdin, which allows advisers free access to analyze how their portfolios perform in various market environments. Fidelity has set a goal of rolling out free tools on its platform in categories such as tax preparation and ID protection. They will scale each of these areas after reviewing usage analytics. The development of such “freemium” services will better enhance the chances of a firm’s survival, or continued success.
- Leverage algorithms and the power of like-minded influence. Most of us have scrolled through LinkedIn to come across a post in our feed from a company that we don’t follow but above it there is a comment noting that your connections “Jane Smith and Sam Johnson follow Salesforce” – which explains why the post appears in your feed. If these two people are connections that you have similar business interests with, then you are inclined to follow Salesforce as a result of seeing this. Humans are naturally interested in what other like-minded individuals are doing. This same logic can be applied to your firm’s website. Perhaps your company offers a large variety of investment products, which a client may find overwhelming. One idea would be to create a compliance-approved page behind your firm’s login wall that shows the client what other similar-minded clients own. If a client logs into your site as she researches potential buys, use her prior digital activity history to display products that other similar-minded clients (with similar activity history) are invested in. Your firm can then list these products at the top of the list. Or perhaps these funds can be highlighted, or better yet, put a percentage number next to the product stating that, for example, 60% of clients that own Optimized Bond Fund also own Dividend Income Fund.
- Ensure all digital touchpoints are designed to work together. 83% of customers make purchase decisions prior to visiting a website. The challenge is for firms to change this behavior by establishing digital touchpoints with the client and then ensuring that all digital touchpoints are designed to work together. Whitepapers, emails, calculators, and educational tools are all relevant digital touchpoints. By having these available, it’s possible to measure where your client’s interests lie, and influence them to finalize the purchase, perhaps purchase an additional product, or forgo a redemption. For example, a robust value-add calculator that allows a client to choose a fund and then see other funds that similar-minded holders own has the potential to produce additional sales. Other calculators (such as the Laddered Investing offered at Eaton Vance, or Tax Evaluating at BlackRock) may be offered to draw interest to your site, and when used, additional intelligence is gained to further build the customer profile in your CRM. Once a profile is built, new content and messaging can be targeted to this segment.
- Continuously experiment. Google conducts and learns from over 10,000 experiments per year, playing with everything from text size to image width. These small and steady optimizations over time will compound knowledge, leading to large improvements. “A/B testing” in an email campaign is an example of the experimentation that should be taking place. If you are promoting your Total Return Fund in an email, create two email subject headers (A/B), and then measure KPI’s such as Open Rates and Click Through Rates. You can further experiment by segmenting the audiences to gain further intelligence. A/B tests may be short experiments that allow you to move fast, learn fast, and gain a general idea as to what works. Large learnings can be gained with small samples. To achieve more granular learnings, larger sample sizes are needed. Experimentation must be encouraged (a time frame of three months is standard) because it is the best way to learn.
When speaking on a Business Development Institute’s Virtual Panel with financial professionals representing forty financial firms on the topic of FinServ Marketing, I asked for a show of hands of how many attendees worked at companies that were putting an additional focus on digital strategies. All hands went up. I then asked how many felt their company was excelling in converting these strategies into engagement and lead generation. No hands remained in the air. This exercise was telling, as it suggests that all firms are learning together, which makes it an especially exciting time to be in the business.
Tim Keane is a 20-year veteran of the asset management and fintech industry.
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