A look at the new routes to market

James Goad

Asset ManagementAsset ManagementBehavioursBusiness ModelEngagementExperienceJourneyRisk

This topic included the D2C model, issues around increased brand management, product white labelling, and outsourcing.

Headlines:

  • Understanding the customer
  • What do 'new' customers want
  • Key pillars of customer proposition
  • Importance of partnerships 
  • D2C businesses 
  • Robo

Key issues and challenges

Understanding the customer:

  • More work needs to be done to understand the end customer
  • All products need to be bespoke and fit with the individual customer needs
  • Many companies are fixated on their best customer base (normally around 10% of full customer base)
  • More needs to be done to understand why this group are you best customers, ie what are their main drivers / motivations?
  • Once understood – they can better understand how to target new customers through partnerships
  • Online reviewers such as Trust Pilot play a key role in customer satisfaction
  • Role of segmenting customers is also key

 What do ‘new customers’ want:

  • Simplicity
  • Transparency
  • Trust
  • Reporting and accountability
  • A sense of community
  • Convenience and speed of service 

Key pillars of customer proposition

  • Product and Price
  • Customer experience
  • A clear focus of what the company stands for
  • Value for money (differs for each business) 

Importance of partnerships

  • Route to market split between factors you can control and factors you can’t – re the factors you can’t control, this is where partnerships can play a key role
  • Before looking at partnerships – key to take a step back and work out what the customer wants but doesn’t have at the moment – however sometimes the customer doesn’t know what is best for them!
  • Has to be the right brand – has to be linked and or relevant to the business and what they offer
  • Set up costs need to be considered, as well as emotional link to partnership e.g. John Lewis advert

D2C businesses

  • Some firms are struggling with their D2C business – but taking a long-term view on profitability
  • Regulation is making it more difficult to launch D2C – more support needed from the FCA around clarity of objectives
  • Some firms believe providers haven’t launched D2C in the ‘correct’ way – ie a belief they should have taken a deeper look at what customers wanted
  • Some firms don’t believe D2C as a strategy works for them
  • However, others are more optimistic around D2C as plenty of people are using platforms to buy funds – they see that the public have a better understanding around FS then others would credit 

Robo

  • UK investors are less engaged with Robo – more engaged investors are found across Asia e.g. Tencent
  • The feeling among asset managers present however is that human interaction is still the most important aspect for many investors

Conclusions and solutions

More needs to be done to truly understand a customer’s main drivers and with a better understanding companies will know how to target new customers through partnerships.

Customers want transparency and to feel part of a community which is why a partnership with an emotional link succeeds.

 


Owen James Group

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