Change, as we all know, is inevitable – and sometimes painful. Our industry has seen significant changes over the years, with most focused on improving efficiency rather than enhancing the client experience. At least that was the case until now.
The rise of robo-advice is a case in point. While many industry observers dismiss this trend saying a computer cannot replace a human, their argument misses the point. ‘Robos’ hold the potential to change how advisers and clients work together, creating a more active role for the client. They facilitate co-created value.
The co-creation of value, I would suggest, will be the basis for future client engagement. The concept of co-creating value has a credible analytical history and is often linked to researchers CK Prahalad and Venkat Ramaswamy. Put simply, it focuses on how you work with clients to create value.
Instead of asking what can we offer to clients in order to drive engagement, we need to ask what we can create with clients to drive engagement. This marks a significant break from the past and requires us to imagine a future in which clients take an active role in innovation of the product, service and overall experience.
To demonstrate how things have changed, let us look outside financial services and consider 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 online forum in which clients influence product development, service offerings and overall experience. You are actively involved in the development of the entire experience. You are choosing to be involved as much as you are choosing to buy.