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Many asset management firms are implementing customer relationship management (CRM) systems to automate their sales and marketing processes and build more comprehensive views of their customers. Likewise, many are building interactive client portals and applications, as well as client reporting and document automation capabilities, to better service customers, create operational efficiencies and meet regulatory reporting requirements. As a next step, asset managers can devise a strategy to share the information generated by these customer-facing portals and apps with their CRM systems, and vice versa, to proactively engage the customer on an increasingly personalized level. In this article, Thomas Kracz discusses why creating this level of client engagement is essential to ensure asset managers generate and retain the interest and attention of younger customers, and survive the impending wealth transfer from Baby Boomers to Gen Xers and Millennials.

Beyond CRM: Tapping the Combined Power of Customer and Product Data

 Amazon, LinkedIn and Facebook know everything about their customers—from when they need to order another printer cartridge to the movie they plan to see next week. While it’s nice, and a little bit unnerving, that they know so many personal details, wouldn’t consumers prefer to see this level of knowledge and capability in the hands of organizations that have far more significance in their lives? More to the point, why don’t the institutions that manage financial assets know their clients this well?

Firms like Facebook have a slight advantage. Consumers spend considerable time on their websites and applications, or at least log into them—often from mobile devices—thereby generating a stream of continuous data that is used to track and analyze their every move. Consumers are drawn to these websites because they provide highly desirable information, services and user experience.

Fortunately, asset managers can create a similarly compelling experience for their customers. In fact, asset managers have two inherent advantages: (1) they manage money, which plays an important role in a customer’s life, and (2) their relationships with customers often begin with a detailed investment profile, which offers a baseline for insights into their needs and expectations. From day one, customers have specific reasons to visit their asset managers’ websites, such as to check investment performance and obtain information necessary to make the experience personally rewarding. But a truly desirable experience requires a continuous flow of information about the customer’s behaviors and actions that can be gathered, analyzed and leveraged to provide services and information that are of increasing value to the customer.

A Virtuous Cycle: Building the Digital Hub for Client Engagement

The first step for asset managers is automating processes and data management such that the information customers require—and that asset managers are required to provide—is easily available, timely and in the desired format. Often, this first step is taken to address operational efficiency and reduce cost, but it also creates the minimum essential service necessary for a customer to consider a return visit. If the data is bad, incomplete or not current, the customer moves on. However, if the information is accurate and easily accessible, the customer will likely return with relative frequency. At that point, there is an opportunity to gather data that can be used to enhance subsequent visits—and the entire customer journey.

Theoretically, this insight-enrichment process could be further enhanced by tapping additional sources of information through customer interaction. For example, asset managers could provide updates on what’s happening in the financial markets that day, the latest economic and world events, the most recent financial performance of the customer’s employer, local weather reports, tuition costs for area colleges or the price of a recently purchased house in the customer’s home or neighboring towns. The ultimate goal of these event-driven updates is to personalize the customer’s experience and build a far more insightful story about his or her goals and plans for the future.

customer journey

Integration and Synchronization

Achieving all this requires a high level of integration and coordination with critical systems, including:

A client portal or digital hub for client engagement that attracts customers and keeps them coming back for more, in addition to providing essential services and timely, accurate information.

A CRM system to maintain richer prospect and customer profiles, as well as drive sales, service and marketing processes that are increasingly tuned to customer needs and expectations—even those they didn’t know they had. The profile could be fed by the initial investor profile, but would be continually replenished by various sources of information—directly from customer interactions, analysis of digital client behavior, trading and investment patterns and predictive behavior.

Web and marketing analytics engines to churn through raw data and draw meaningful conclusions about customers that the CRM system can act upon.

Dashboards and other tools to assess the effectiveness of marketing programs and processes, allowing the asset manager to reallocate resources for optimal effect, tapping the more intimate knowledge of the customer contained in the CRM system.

An artificial intelligence (AI) capability to explore customer behavior in a much more expansive context (e.g., world news, economics, occupations, personal relationships, etc.) via integration with external data sources. Such a capability might be useful for forecasting customer behavior at a more refined level, while more advanced levels of AI might actually articulate the specific causes for such behavior.

asset managment digital platform

Tying these systems together to work uniformly and in real time is essential because customer impressions and decisions, particularly among the younger generation, are often made in an instant these days. Asset managers, as well as the wealth management advisors who sell and support their products, must create digital hubs to attract and retain younger customers.

Gen Xers and Millennials may not have significant assets today, but they will soon, and some do now. Gen Xers are turning 50 and in their peak earning years. Older Millennials are in their mid-30s, hitting their stride financially, and they are set to inherit wealth from their Baby Boomer parents, with fewer brothers and sisters to share it with. Over the next 30 years, $30 trillion will be passed down from Baby Boomers to Gen Xers and Millennials1 . Sixty-six percent of children fire their parents’ financial adviser after they inherit their parents’ wealth, according to an Investment News survey. Therefore, asset managers and advisors will need to fight for their share of these assets.

The younger generations—and even the older Gen Xers—grew up with technology. They are accustomed to an overflow of digital information and have little tolerance for organizations or institutions that cannot provide them with the information they need, when and how they need it. For them, it is a baseline expectation. Asset manager retention rates for younger customers are much lower than for older customers. Those that don’t align their services and technology with the needs of the digitally savvy will see increased customer churn.

As asset managers build the internal business case for creating digital hubs, they should consider the tactical benefits of increased operational efficiency. They should focus on the lifetime value of the customers most likely to engage with these hubs, as well as the strategic value of the insights derived from analyzing their actions. To do this, they must tightly integrate CRM with customer-facing digital platforms. The ability to generate these insights and use them to create an Amazon- or Facebook-like level of familiarity and comfort with the younger generation will improve customer satisfaction, increase retention and position asset managers to survive, if not thrive, as the assets of the younger generation grow exponentially.

Thomas C. Kracz is a Vice President and leader within Sapient Global Markets’ Solutions practice. Based in Boston, Tom has more than 25 years of experience in technology services for global capital markets, having held senior management positions with established software and consulting firms. At Sapient Global Markets, he is responsible for identifying, cultivating and managing strategic technology solutions.