Change, as we all know, is completely inevitable and sometimes painful. And while our industry has seen significant changes over the years, few changes are universally accepted as truly disruptive. This is as true for the client experience as it is for other aspects of the business. The client experience has most certainly been impacted by access to a dizzying array of product, an increased focus on financial planning, the emergence of niche-focused businesses and technology. In almost all cases, these changes have provided clients with greater choice or more customized solutions. And they’ve provided firms with the ability to improve efficiency and profitability. Today I’m going to ask you to think forward, unshackled by how things have been done up to this point. Ask yourself how the client experience will change and what that means for your business? Today is about asking ‘what if’.

A New Role for the Client

I'll start with a potentially provocative statement.  Changes in how we manage client relationships have been driven more by firms/advisors than clients. Now before you feel too insulted by that, let me share a few thoughts. I believe that:

• this industry is client-centric and that good people are actively trying to improve the client experience to help their clients.
• firm-driven change can, in fact, be client centric. These two things aren’t mutually exclusive.
• the future of the client experience will involve the co-creation of value, which is client-driven rather than client-centric.

What is Co-Creation of Value?

In a previous post I discussed the concept of co-creation of value, which is linked to researchers C.K. Prahalad and Venkat Ramaswamy. (See Co-Opting Customer Competance for more detailed information). And while true co-creation may be far in the future, but is worth thinking about now and holds out the potential to transform how you work with clients. Simply stated, co-creation of value focuses on how firms (you) work with clients to create value. In the past, value was created by firms and offered to clients. That meant that the primary goal of the business was to identify and target the right clients for the product/service being made. In the future, according to this theory, value will be driven by clients, who will take an active role in innovation of the product, service and overall experience. My own definition takes the form of a question.

Instead of asking what can we offer to clients, in order to drive engagement, we need to change the question to ask what we can create with clients in order to drive engagement.

To demonstrate how things have changed, let’s look outside financial services and look at how value has changed in the coffee industry.

1. Firm-driven value. A coffee company opens a shop on your corner. You can choose to buy the coffee that is available or not.
2. Client-centric value. A coffee company crafts a range of coffees that reflect the tastes of several key client segments. You can choose the coffee best suited to you (or not).
3. Co-created value. A coffee company creates an on-line forum in which clients influence product development, service offerings and the overall experience.  You are actively involved in the innovation and development of the entire experience. You are choosing to be involved as much as you are choosing to buy.

With co-creation of value, clients are truly involved in the innovation of the product, service or delivery. In the first two phases, the firm is making decisions, albeit with a view to meeting client needs.

An Hypothesis About the Future

Here’s my hypothesis. Discuss.

The future of the client experience is tied to co-creation of value. Clients will play an increasingly active role in driving innovation. True innovation will occur when advice is more completely integrated into the lives of clients when, where and how they need that advice.

Co-creation of value isn’t just asking for feedback and it isn’t just shifting some of the work to clients. It’s about client involvement and the creation of a truly personalized experience.

The Two Faces of Co-Creation of Value

1. From Client Input to Client Involvement

It’s no secret that I love client feedback as an engagement and growth strategy. And while client feedback is a part of the co-creation of value, it has limitations. Perhaps the most significant limitation of traditional client feedback is that it limits the scope of the response. In an effort to be efficient (and sometimes in response to directions from compliance) most surveys are strictly quantitative. A quantitative survey is a great way to measure performance however it forces you to define closed-ended questions. The options you include in those closed-end questions are necessarily biased and while this doesn’t discredit the process, it limits the value when it comes to true innovation. What does this mean for our industry? At a minimum, we need to find ways to understand what clients’ need at a deeper level. Structure conversations with clients via focus groups, advisory boards or one-on-one interviews to gather deeper information on on they define great and the specific issues they want to resolve in their day to day lives. But let’s look forward. There are companies that are getting creative about client involvement.

• Starbucks actively solicits consumer input that informs their products, services and the overall experience. Check it out here.
• Lego has created tools that allow customers to build whatever they want. Lego provides the building blocks but customers can use those to build something completely unique and personal. Check it out here.
• Fitbit tracks your steps while inviting you to enter additional information about your health so that the outcome is greater than that which the firm alone could provide.

Client involvement changes the value that is created. So what if…..

• we involved clients in an 'innovation lab' that examined if and how they are using advice in their lives and surfaced their unmet needs?
• we transformed client feedback into a conversation so that clients were regularly sharing information on how they were feeling or what they worried about?
• we examined client behavior more closely to understand when they actually think about money and how it plays out in their day to day lives?

Co-creation of value is driven by finding increasingly innovative ways to tap into client creativity and to understand how they think and use the services provided. On the basis of this input, you can not only innovate, you are on the path to a truly personalized client experience. Your clients might create a fundamentally new way to support them in dealing with money in their lives.

‍2. Toward a Personalized Client Experience

‍Perhaps the bigger transformation promised by a co-created approach is the way in which clients experience working with you. There are two key questions that will be critical for financial advisors.

• Are you creating an experience which is truly interactive for the client? That process might involve co-creating agendas or the effective use of technology to run scenarios during a review meeting.
• Are you personalizing the experience? That might involve personalizing the communications a client receives and the form in which those are received.

I would suggest that if we can co-create the experience, we can achieve true differentiation.  That means that we need to meet clients on their turf, providing advice when and where they need it.  Advice may not be delivered on our terms in a traditional review meeting. The traditional process of communication assumes two things.

• The notion of quarterly or annual reviews suggests a client is primarily focused on money when he or she meets with the advisor. But what if that isn’t the case? What if I really need advice when I’m talking to my mom about whether she can continue to live on her own, or to my son about money or to a friend about a new business idea?
• The way in which we communicate suggests that clients are passive ‘receivers’ of information. You probably spend a great deal of time educating clients, identifying the right topics, curating content or running workshops. What if I want more input into the kind of information I would find valuable?

What does this mean for our industry? At a minimum we need to find ways to allow clients to personalize how they interact with the company, whether that's frequency of contact, form of contact or access to information. Technology will play a huge role in this process.  That means gathering input on what is of interest and customizing the service and communication plan to their needs (assuming there is a baseline level that reflects the value of the relationship).Let’s look forward. At my son’s school, there is an emphasis on integrated learning. For example, in art they might recreate paintings of a famous artist. As they are doing that, they learn about the time in which he/she grew up and they might also ‘sell’ their paintings as part of a charitable effort to support the arts. One core theme – multiple learning points. What if we could take that concept and apply it to advice? So what if…..

• A client shared a vision for retirement that involved climbing Kilimanjaro? With a narrow lens, you know I need to free up the cash flow to support the adventure. What if, instead of looking at my plan, you were able to generate a report that not only told me how much money I would need, but provided links to training schedules, on-line communities, insurance providers, packing lists, travel companies. You get the picture.
• You could connect your advice to real day-to-day challenges. What if I wanted to be able to access information that supports me when I argue with my spouse about money, try to figure out the best allowance for my kid or start thinking about my legacy?

A Final Word

The reason that co-creation of value is so powerful is because it informs a client experience that cannot be commoditized. We spend a great deal of time focusing on how to improve and enhance what we are already doing. It's time well spent.  But every now and then it’s a good idea to think about what the future might hold so we don’t wake up to find ourselves irrelevant in a world that is changing around us. No, I don't think we're at the stage of implementing some of these 'what ifs'.  I do think we need to find considerably more creative solutions to involve our clients in crafting a vision for the future of the client experience and this industry.

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Thanks for stopping by,

Julie