Video Killed the Radio Star
They never even saw it coming
I handed the driver my credit card as I exited the taxi. He grabbed an iPhone with a peculiar white dongle attached. He slid the card through the white node and as I asked him for a receipt, my iPhone chirped and a text-messaged receipt appeared.
This impressed me as reminiscent of my experiences in the Apple store (or more recently Nordstrom). It also evoked a barrage of thoughts, the most prominent being if you sell or repair cash registers; you better update your business plan or resume.
That thought led me to ponder “category killers”, a marketing term used to describe a product, brand or company with such a distinct sustainable competitive advantage that competing firms find it almost impossible to continue operating profitably.
It seems these “category killers” are popping up with alarming speed. The litany of household brands eviscerated seemingly overnight is astonishing – Borders Books, Towers Records, Blockbuster, Kodak, and Encyclopedia Britannica to name just a few.
Google’s advertising revenue now exceeds that of the entire U.S. print industry combined. Newsweek published its last print edition in December.
Fidelity is one of seven trust companies to have one trillion or more of assets under administration; formerly hallowed ground reserved for banks.
Discount brokers captured market share faster than the other wealth management distribution channels, with RIAs finishing second.
When I first started in the business, clients had to call for a quote or a research report; now it’s in the palm of their hands. No longer are advisors the conduit for information. Today’s consumers have seemingly limitless amounts of information available to them and they are using it. They research more and are unabashed in sharing their opinions and experiences.
If you are like me, before I make travel arrangements, visit a restaurant or make a meaningful purchase I check the reviews on Epinions, Yelp, TripAdvisor, Facebook… Every experience is amplified positively or negatively as it finds its way into virtual communities leaving an indelible impact on you and your brand. Never in history has the consumer gotten so much of what they want, so quickly and in such a customized way. And never have they shared their experiences so easily with so many people.
No longer do I have to drive to the record store to strap on a pair of dirty headphones to listen to tracks on a CD. Nor do I have to buy the whole CD. I can customize my experience from anywhere in the world. I can do much more, they way I want it, when I want it and for less. And, iTunes does not run out of stock. I get what I want, right away.
Consider how the discount brokers are transforming the business by pushing so much information and so many tools into the hands of the consumer at such a low price. Consider the proliferation of ETFs and the consumer awareness of them and you might catch a glimpse of how the old way of providing wealth management products and services is being transformed – now!
Still not convinced? Take a look at Wealthfront – www.wealthfront.com
Yet, with this writing on the wall, ours is an industry reluctant to change – reluctant to embrace social media; reluctant to develop consistent processes for managing the client experience; reluctant to invest in new technology; reluctant to outsource; reluctant to use multi-channel marketing.
KaneCarlton is currently working with a bank trying to integrate several wealth management business lines, as well as maximizing cross-selling capabilities within the institution; two fairly common challenges.
Working with the key stakeholders in the institution it quickly became clear, the relationship between the wealth managers and bankers ranges from indifferent to bitter. Wealth management is complaining about the lack of referrals, while Retail harps about unfair goals and inadequate advisor support.
We are left wondering if this is much ado about nothing. While we understand the importance of a high share of wallet, the plain truth is, foot traffic is down in branches and will likely continue to decline.
This bank also serves very remote areas, which creates staffing challenges, as well as productivity issues as advisors spend more time behind the windshield and less time with clients.
Muddying the water even further is the nagging question of whether these retail clients are the most desirable wealth management targets.
So before wasting a lot of time and money, the bank might want to ask if the ladder of success is leaning against the right wall.
Should the institution be channeling resources to what is arguably a dying channel, or directing those resources toward providing solutions for increasingly sophisticated and demanding consumers?
These new consumers seek objectivity and sound advice delivered consistently and, on-demand. They seek an experience easier to understand, easier to use, more measurable and more tangible.
They want to feel connected and part of a network, yet unique and in a partnership with you; steering together toward their desired outcomes.
Ask yourself who those category killers are for wealth management and how you can begin acting today to dramatically retool your offering to meet the consumer revolution at hand.
I am a consumer and I want my MTV.Scridb filter
Date: April 2, 2013