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As businesses are now cottoning onto the fact that a reliance on financial capital is not enough to survive a potential triple dip recession, more sophisticated ways of influencing client behaviour are increasingly used in the commercial world as business focuses on relationships as well as transactions.
This is quite simply because we are turning full circle from an era of capitalism at all costs, to a need for stakeholder engagement, social responsibility and ethics. You only have to look at the banking sector and the demand for transparency, diverse boards, and NEDS to address the severe client trust deficit that exists.
The good news is trust in its own right can be repaired over time and this can be enhanced by the fact we currently are living in a time of great entrepreneurial innovation. Think SMAC: Social, Mobile, Analytics and Cloud technologies, which are leading a different and radical approach to client relationships.
Never before have clients had the ability to access instant information over social media, and hand held technologies. This combined with businesses scramble for accountability and transparency means that clients have the upper hand if they want. But it also means businesses can adapt quickly and offer clients what they want.
Even where cost and price is concerned, cloud technologies now give business the ability to set up anywhere and offer cheaper solutions to their clients.
SMAC allows businesses to transform their client relationships in the following ways:
• Simplicity: Allow instant access to simple solutions to match client needs • Transparency: Using Push technologies, (YouTube, Twitter, Blogs) and Pull (Websites, Facebook, Linkedin) to gain attention • Accountability: SMAC offers a 24/7 strategy fulfilling clients expectations for instant information and return on investment (ROI) for the business • Cost effective: Intelligent use of SMAC technology means lower business maintenance costs which (if passed to the client) makes the value chain offer more value • Engagement: Effective customer relationship management (CRM) systems with the emphasis on defining and building the desired relationship will build empathy, rapport and trust
We now see SMAC technology offering a social network promoting collaborative and more productive client relationships: Yammer, Chatter, Jam and Open Social are all examples of software designed to encourage knowledge share, service efficiency and clear communication channels.
Within the retail financial services industry there has been plenty of stick and little carrot from the regulator where the Retail Distribution Review (RDR) is concerned and a move to client agreed fee based services. Yet, (along with complying with regulation) by applying the above strategies adviser firms will be offering low cost online value along with their face-to-face services.
To do this the firm has to have developed:
• A clear segmentation approach • Decided on centralised investment propositions, outsourcing, passive services • Tailor services to match the independent and/or restricted approach
In other words the client service proposition should now be developed to accommodate their clients’ needs. This requires a clear focus on relationship not just financial capital.
For example, the trouble with segmentation by client trail revenue, profit, and value means the cash is the client not the client. This promotes short-term thinking in managing a business through the rear view mirror. By nurturing relationships and positively influencing client buyer behaviour, firms can design services around the desired relationship they want with clients, promoting loyalty and trust.
Once this is all in place, Analytics must then be used to assess the performance of the technology in the relationship building process. There are plenty of free tools that can be accessed to illustrate the firms reach on social media: Hootsuite for the reach of multiple social media networks, Google analytics for website visits and sales, and Klout providing an social media influencer score can all provide an accurate account for real ROI for the applied technology.
So if relationship building appears a little fluffy and ‘tree huggy’ for your hard core financial service businesses strategies, then think SMAC and how this is applied to your client service proposition. You’ll be creating real value, online communities of shared interest and surprised how much client trust you can generate.