Financial services clients believe their providers’ advice continues to feel “off-the-shelf,” lacking personalization, and can be dated by the time they receive it.
In the age of automation, the demand for real-time and bespoke advice continues to be a value driver that should be prioritized. In recent years, the combination of product shelf complexity, less experienced advisors due to high attrition, and the growth of the number of clients being served by an advisor have led to some advisors feeling ill equipped to adequately meet their clients’ needs.
Next best action (NBA) is a form of predictive analytics that can be used to guide efforts more strategically and answer the important questions: what should I offer and when? By focusing on one or more of the following key levers, organizations can build to enhance their NBA strategy:
- Customer-centricity
- Omni-channel strategy
- Data governance and design
Becoming a client-centric organization
There is an opportunity for advisors to develop a deeper understanding of who their clients are beyond their wealth by focusing less on available products and instead on suitability. This deeper understanding helps remove the dichotomy between client needs/goals and sales incentives, and allows for a broader view of client attitudes, behaviours, ambitions, pain points and knowledge.
By shifting away from a rudimentary product-based approach to a client-centric one, roadblocks to value realization are removed by capturing micro-moments rooted in goals-based planning, spur-of-the-moment decisions and other cross selling opportunities available through other lines of business.
For firms looking to move from being product centric to client centric, there are three key considerations:
1. Firm-level strategy: This entails validating the client-centric approach against the firm-level strategy and adjusting the approach as needed based on market positioning, required capabilities and current strengths to effectively execute.
2. Operating models and governance: Beginning with a clear view of the ideal customer experience allows for high-priority capabilities to be identified that are required for effective execution. Designing an agile operating model that defines functions and organizes resources efficiently against those needs is often a missing link in client-centric organizations.
3. Performance and reporting incentives: Capture and report the right metrics at the right intervals to create incentive-based alignment.
Once a strong culture of client-centricity is established, the introduction of hyper-personalization and NBA can be introduced. Hyper-personalization in the form of individualized communications, including emails and videos, is a common and effective method of marketing used by wealth and asset management firms to engage with clients in a more meaningful manner.
Taking a more nuanced approach than simply adding a name to an email, some leading insurers have captured users’ attention by sending individualized emails on client milestones that contain a photoshopped image of employees holding a message on a whiteboard. This unique messaging approach is supplemented with incentive-based nudges: limited-time offerings based on consumer demographics and psychographics, which allows firms to interact with clients during “micro-moments.”
Intelligent chatbots are another way to enrich the client experience through 24/7 availability and access to comprehensive client data, which allows for the resolution of highly specific personal inquiries.
Below are some additional use cases of how NBA is being effectively used: