In brief
In this article, we introduce the benefits of CX benchmarking, provide links for further research, and demonstrate them using the scenario of a post-merger integration. CX benchmarking will deliver these benefits, regardless of whether your firm is going through a merger. But we chose this scenario because it is one of the biggest challenges an asset manager can face and it will be relevant to many firms. Skip straight to the scenario.
The benefits of CX benchmarking
The benefits of CX benchmarking fall into three categories – design client-centric processes, deepen client engagement, and stand out – which the Client Behavior Benchmark breaks down into 26 itemized use cases. We will remain at the category level for now, but this underlying detail helps asset managers translate Accomplish’s insights and recommendations into specific actions. Before we get into the scenario, let’s explain the categories and give you links to individual articles in case you want to explore them further. Book a demo to see these detailed use cases.
1. Design client-centric processes – first, the Benchmark’s behavioral dataset allows you to design processes based on your clients’ actual behavior, such as how far down they scroll on a thought leadership web page or how often they log in to a client portal. There are dozens of similar insights, they are end-to-end, and building on them lets you leverage patterns of client behavior, such as identifying your superfans, being alert to changes in market norms, or responding fast to changes in client behavior, e.g. indications of sales opportunities or clients at risk.
2. Deepen client engagement – second, client behaviors are either ‘gifts of time’ (which you can stimulate) or transfers of money. This means the Benchmark lets you:
- Widen your pipeline by 1) becoming an expert in maintaining and stimulating client engagement and 2) increasing your number of leads because the Benchmark’s funnel encourages Marketing to flow seamlessly into Sales.
- Reduce your average cost of sale by setting balanced targets for the ‘dollarizable’ client behaviors: client tenure, product-per-client ratios, and sales conversion.
- Demonstrate compliance with the FCA’s Consumer Duty.
3. Stand out – the brutal truth, however, is that “good CX is forgettable; only the extraordinary gets remembered, discussed, and shared.” So, the third category of benefits comes from the Benchmark’s ability to pinpoint, in time and money, where your pre- and post-sale CX stand out (i.e. outperform) at engaging clients, and vice versa. Armed with this information, you can:
- Be laser-focused in your efforts to avoid being just another asset manager in an over-supplied market.
- Make external statements about the excellence of your CX.
- Establish business cases to further capitalize on your strengths and fix areas of underperformance.
Now that you have this foundational knowledge, let’s see how these benefits minimize retention risk by enabling a client-centric merger.
First, let’s set the scene.
What if your merger deters clients?
Large money management firms are gathering assets and squeezing fees as they spread costs across greater income.
In response, mid-sized players are evaluating their alternatives to the status quo – merge in pursuit of scale, retreat to a specialism, or exit – and many will consider mergers.
But scale alone is not a panacea. For example, how do you avoid the post-merger arrangements deterring both existing and prospective clients by (let’s face it) either taking too long or resulting in an expensive mess?
Having designed BlackRock’s post-merger institutional client experience (CX) in 2010 after it bought BGI, I believe the answer now is the same as it was then, which is also the Financial Times’ recent conclusion: “The compelling rationale must be centred around the client.”
Therefore, as BlackRock did, any asset manager embarking on a merger should mitigate retention risk by establishing CX as a core part of its project plan.
Retaining clients is vital to the success of your merger
For sure, a merger brings your company a once-in-its-lifetime opportunity to reaffirm clients’ place at the heart of the business. And because you merged as a way to gain scale, retaining clients is vital to the success of your merger.
But do not assume they will stay with you.
A merger’s upheaval and internal distractions also create a once-in-a-lifetime client retention risk. Do clients still feel like they are your top priority? What benefits will the merger bring them, and when? And what new issues will your merger create for clients who have relationships with both legacy organizations?
Clients receive exceptional experiences from other asset managers and will be eager for answers from you. So, after an initial grace period, they will assess the success of your merger and begin deciding whether to stay with you. Their decisions will drive your merger’s ultimate success.
With a client-centric merger, however, the winners will use their time wisely to minimize their retention risk. An immediate action, therefore, should be to deepen client engagement [a benchmarking benefit]:
- Stay focused on the basics of serving clients and managing relationships.
- Set balanced targets with relationship managers responsible for client retention as well as new sales.
- Prioritize the future CX in the integration project, so you can get your new Marketing and Sales teams working together on widening the pipeline.
Anything less could risk their confidence in you, so also check out our client engagement playbooks to learn more.
The client-centric merger
The grace period will give you one chance to get it right, so go straight to the numbers in your systems, compare them against the Client Behavior Benchmark, and capitalize on the remaining benefits of CX benchmarking.
Across your legacy client journeys (from marketing and sales to service and relationship management), find out where you out- and underperform the client experiences other asset managers provide.
Be thick-skinned because this is just the moment when some people may not want underperformance to be unearthed. But clients already know, so it should also have been known internally, and if not, you had better find out to avoid perpetuating it.
At each key stage of the client experience, ask what the best outcome from the merger will be for clients and then incorporate the answer as a ‘design decision’ into the processes of your new operating model:
- Protect and build on the strengths.
- Decide how to respond to weaknesses.
- Make choices about areas of contrast.
In so doing, you will embed client-centricity into your processes [a benchmarking benefit]. I have run several integrations and, in my experience, this client-centric focus will also let you move faster because it subordinates the internal politics of a merger to the critical goal of client retention.
Lastly, engage your communications team to publish regular client updates. Just because you are undergoing a lot of change, don’t allow your firm to get distracted or lose its voice. Instead, find out from the Benchmark where you stand out and play to your strengths [a benchmarking benefit] while you work through the necessary internal integration.
Accomplish’s 3 steps to CX excellence
To summarize, the benefits of CX benchmarking fall into three categories: design client-centric processes, deepen client engagement, and stand out.
These benefits apply regardless of whether or not your firm is going through a merger, but in this article, we use the scenario of a merger to demonstrate them.
Combined, they will help you level the playing field against the larger firms who can afford exceptional CX.
We hope you found this useful and if you would like to learn more, here are Accomplish’s 3 steps to CX excellence:
- Book a demo to see the Client Behavior Benchmark in action.
- Check the readiness of your CX data.
- Pinpoint, in time and money, where your CX out and underperforms at engaging clients.
