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The Three Hump Problem: Building a Robo Advisor Customer Base

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Chairing a panel of “digital marketing gurus” last week at Platforum’s D2C conference, I pitched the customer acquisition challenge as being the two hump problem – operating in a category no-one knows about before you even try and create preference for your offering.  In retrospect I would make it a three hump problem.  While awareness of the category is slowly creeping up – the figures I had for the event were 11% but a more recent study by AT Kearney now says 20% (this is in the US mind you) – we still face a largely disengaged audience to start with as Lucian Camp warned us in his warm up to our session.

That’s a tall order if you are going to build what McKinsey called “trust and intimacy” in its recent report for what is essentially a service not a product. Yet I remain an optimist. Consumers are prepared to entrusts things to the internet (not always wisely) that would have been unthinkable 5/10 years ago and we have reached a tipping point with mobile devices and their role in our lives connecting us 24/7 and changing our habits rapidly and irrevocably.

The challenge for traditional companies is how to respond in a fast-changing world they decreasingly understand.  I have written previously on reverse mentoring and I would also refer everyone to Scott Brinker’s useful musings on marketing technology and its irritating inadequacies.

In marketing terms my top five tips remain:

  1. Listening – you cannot invest too much at this point in understanding your customers/clients and how their needs are changing. Established players will lose them to someone who understands them better if they don’t and new players won’t gather clients and assets unless their client experience really delivers what its target market wants and needs.
  2. Customer referral and advocacy – Betterment is only five years old and already a third of its new business already comes from current clients. Active advocacy is not something wealth management firms have traditionally invested in leaving it largely in the hands of advisers but a less laissez faire approach may now be advisable.
  3. It’s not just about finance – we have tried for decades to get people excited about pensions and largely failed. Besides most people under 50 will never be able to or want to retire completely – engagement with consumers has to be about how we all want to live and manage our income and capital over lifespans my grandparents would have been astonished by.
  4. Learn new tricks – having failed to get most people to come to us – we need to go to them, wherever they are, and talk to them how they want to be talked to. Gamification is a particularly interesting area.
  5. Get personal – online need not mean impersonal. I predict a growth in brand characters – perhaps more in the avatar and virtual assistant’s mode than Tony the Tiger but you can’t knock his longevity.
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