To continue to grow, asset management firms must genuinely have the customer’s needs at heart, says Arthur’s Darren Lassiter.
Asset management needs a fresh approach. And with research from Casey Quirk suggesting that a quarter of all asset managers risk becoming unprofitable by 2028, it needs it soon.
The problem is that much of the sector is trying to address new challenges with old solutions. Cost cutting, investment quality and outperforming on benchmarks – these are the tactics the sector has traditionally relied on to boost profits.
But the same research that predicts the widespread drop-off in revenues also reveals that these tactics are becoming increasingly ineffective. In today’s market the customer wants more.
Even with this dire warning front and centre, too few asset managers are looking to the customer for answers. They should. There is concrete proof that those who actively build their offering around customer needs from the ground up deliver consistent and sustainable growth.
Certainly, there is no shortage of firms who use a liberal sprinkling of the word ‘customer’ across their communications. Customer care teams have also, no doubt, been drilled in the importance of a ‘customer-centric’ approach. But, in too many cases, the adoption of a customer-centric approach is all too superficial.
For companies to succeed beyond the predicted nine-year event horizon, they have to truly understand what customer-centricity means – and they need to understand how to make it work.
Customer-centricity starts with the product and what the consumer wants that product to be. The research found that profitable growth firms transformed their product management group into a development function that based product creation on buyer demand. As a result, these firms were open to changes in that demand. They had built a function based on data, personalisation, technology and predictive analytics to help them understand customer need and act rapidly to accommodate it.
These forward-thinking companies engage with technology, but don’t consider it as a solution in itself. They recognise it for what it is – a tool that allows them to move on new ideas quickly, deliver experience seamlessly and bring systems in line to support change and future innovation.
Critically, these new development groups are cross-functional. They break out of the sales or product management silos and bring on board all touchpoints across the business. As the single biggest customer advocate in this process, it is unsurprising that the Marketing function, is proving to be the vital element within these cross-functional teams.
For too long, many asset management firms have used customer-centricity as a buzzword rather than a true corporate goal. But within their Marketing functions they may already have the expertise to make their claims a reality.
Within Marketing, ‘customer first’ is an organisational state of mind. Their function is the hub of analytics, sales data, customer care, trends impact and even…or maybe particularly… of a new era in product development. Marketing recognises that the company’s existence, survival and growth depends entirely on being able to give customers what they want.
We know that an organisation can only continue to exist only as long as it continues to satisfy the needs of its customers. Now we must ensure that it has a structure that allows it to deliver this, and that Marketing is its driver.