Category Archives: Segmentation

Customer Experience: Playing maturity catch up…

Observations from the Sydney CX Design & Implementation Conference

(11 November – 12 November 2015)

I was lucky to be able to attend the Customer Experience Design & Implementation conference in Sydney last week listening to and speaking with organisations as each shared their experiences, success stories (of course) and learnings (can’t be enough) from organisations covering (but not limited to)  Telco’s, Financial services, Age-care, Government, Recruitment, Logistics, Design, Technology vendors, Fintech and Startups.

It was great to hear the variety of ways organisations make an effort to improve customer experiences across different industries. Such perspective across industries becomes increasingly valuable as many of the experiences people have to one industry drive their expectations and perception of others. As a result, a glass ceiling is put over industries with lower maturity levels in regards to customer experience and related expectations. From my view, which focuses on financial services and wealth management, those industries with lower customer experience maturity levels must play ‘maturity catch up’ versus other more established industries and/or organisations.

In case you are not interested to read further for more detail, buzzwords to summarise the conference include: #Employeeengagement drives customerengagement; #Designthinking; #Listening; #Empathy; #ValueExchange; #Culturalchange; #Differentiateyourexperience; #Multiscreen/#Multidevice; #Rewarddrivescustomerbehaviour; #Customerownsthejourney; #Actionable; #Beingandfeeling; #Voiceofthecustomer; #Nuroscience; Continue reading

Resistance to change to a Needs Based Segmentation Strategy cannot be the advisor anymore…

Last year I spend two blogs around the need for adjusted segmentation models and adjusted pricing and of business models for the private banking industry.

In the first blog I detailed the importance of a Needs Based Segmentation Strategy, but also outlined some of the challenges organisation faced:

“Changing your segmentation strategy impacts the complete way a firm needs to think and should operate. It is not only operational (cross business unit thinking) it is also a cultural shift in the organizational thinking and the position of the client in the operating model. While the relationship manager was in the middle of the operating model for years, the HNWI client wants to be at the center of the operating model now and uses the different facilities around them (e.g. branch, advisor, call center, online, mobile, social media, …). The HNWI expects these facilities to be available, because these clients have personal preferences and want to make the decision themselves. -“I would like to use the channel I want to contact my bank, not the channel I have been asked to use”. – Not all clients want to be fully in control, because they like to have everything managed for them, but even this group seems to be increasingly involved in managing their own wealth. These examples, again, show the different clients and the different way of being serviced (with a different price tag that should be expected from a cost to serve perspective)”. Continue reading

Wealth Management ‘Everything comes with a price’

The Segmentation Discussion in Wealth Management (part 2/2)

My previous blog ‘The importance of a needs based segmentation strategy’ mainly focused on the importance of putting the HNWI customer in the center of the service model of a wealth management firm. Fact of life is that today 99% of the wealth management firms put the relationship manager in the center of their service model. I tried to summarize it as shown below:

from selling to being bought

This article in Wealthbriefing, based on an interview with Celent, describes Segmentation: ‘Product and services based on an increasingly diverse client base’. Firms are addressing all types of customer segments, going outside their traditional investor segment, and therefore require scale and technology. Retail banks are moving to serve the HNW customers, while private banks have lowered their threshold to serve more of the lower-end of the market. They describe exactly the issue if the industry, because lowering a threshold is not the answer on the industry challenge. I would say: A needs’ based segmentation strategy, where segments are built around the needs of the clients, instead of the Assets size of the HNWI’s should drive this change. Continue reading

Wealth Management and the ‘The importance of a needs based segmentation strategy’

The Segmentation Discussion in Wealth Management (part 1/2)

In the traditional thinking of a wealth management firm or private bank there are certain products only available to a wealth management or private banking client that are not available to non-HNWI’s. As personal banking client (other definitions might be applicable as well) you are not able to buy it, because your assets size is not big enough. That is pretty strange right? A client wants to buy a product, but the ‘sales person’ says no. My point of view is clear:

“Every client should be able to buy the products they want, but everything comes with a price”

The segmentation discussion in the wealth management discussion is very actual, but also not easy to grasp. Last week I had a great conversation with two wealth management experts from our beloved Switzerland and there was clear consensus that the industry business model is going to change (because it needs to, due to regulatory pressure, need for transparency and changing client behavior), but we also agreed there is no a one-off solution. The industry is looking around.

In this first of my two blogs I will focus on the way to define the right segmentation that is different from the traditional AUM (Assets Under Management) based segmentation. In the second blog I will discuss the impact on products, services, channels and pricing!

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Loyalty in Wealth management requires ‘Chameleons’

Loyalty is like a key performance indicator for wealth managers and worth of mouth referrals are the best leads to new clients. As wealth manager you focus on making your wealthy clients (HNWI) happy. If all (or most) of your clients are happy, we could argue that you do not have to worry about the size of the portfolio you are managing.

Unfortunately, the loyalty subject is not very easy to catch. The loyalty of a 60 year old HNWI will be achieved in a complete different way than for a 30 year old HNWI. Different life stages, different personal interests or different needs are just examples explaining this. Again flexibility is asked from the wealth manager and yet another example of the fact that a wealth manager needs to be a ‘Chameleon’ like. Without going to discuss the role and activities of the wealth managers too ‘broad’, the job of a wealth manager requires increasing flexibility in managing client relationships. HNWI demands have never been as high as they are today and because of the increased diversity of the HNWI population this requires this flexibility of them. Diversity has never been discussed so often.

chameleon-1

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How a cost driven solution becomes a differentiator for wealth managers…

… About the important role of digitisation in the segmentation strategy for wealth managers and their clients…

Segmentation

In the past I have written about the importance of the right segmentation strategy for wealth management firms and private banks. The segmentation subject sometimes has a negative undertone. Reading quite some angry comments on blogs that are discussing the impact of digitisation on levels of service from the negative side or what they call ‘reduced services’. I would like to use this blog to discuss the important role digitisation has in a segmentation strategy for the wealth manager and the added value to their clients.

Historically wealth managers (and banks in general) segment their clients primarily based on Assets Under Management. Advisers look into CRM systems and refer to conversations they previously have had (although this probably is captured in the CRM systems), to define the strategy how to approach the clients. Is the client an entrepreneur, a doctor or politician? This is how their segmentation is done. Of course I describe this very ‘black and white’, but Scorpio Partnership highlighted this recently as well. ‘Too rigid’? Oh Yes!

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