CX strategy – go to the heart of the matter
Seize the opportunity to gain a competitive advantage
Accomplish’s research recently discovered that client experience (CX) impacts firms’ profitability twice and that, for many asset managers, CX has become the differentiator.
Yet we also learned that industry-wide CX is not going well: firms actually are experiencing twice as many indicators of an unfavourable CX than of a favourable one.
The root cause is that ~75% of firms lack a CX strategy and sufficient CX governance to control the operational complexity of serving clients with different needs.
This situation is controllable, and we are encouraging asset managers to seize this opportunity to gain a competitive advantage. In two blogs, we break down the problem and propose straightforward actions firms can take as part of a broader response to each root cause.
This article addresses firms’ CX strategy options, explores the pitfalls of not having one, and recommends immediate actions firms can take. A separate blog focuses on CX governance as an essential framework for asset managers.
What is a CX strategy?
A CX strategy is an agreed way of serving your current and future clients so as to create in them the confidence and trust that comes from a predictable and dependable experience.
Choosing a strategy is relatively straightforward, as your options will be either to customise, standardise or segment. Once you have chosen, you should then determine what it will mean for each touch point across your end-to-end client experience.
For example, if you choose to standardise, what service levels will you adopt? If you customise, will you accede to any client request and, if not, how will you govern this? Or maybe your client base isn’t homogenous and you choose to segment, thereby offering different service levels to clients with different needs.
These choices are at the heart of how you set clients’ expectations and meet them across your end-to-end organisation.
How should I go about this?
Take a three-step approach:
- Analyse your client base, their needs, and their alignment with your business strategy.
- Choose a deliberate CX strategy that will best suit your situation: customise your service, standardise, or take the middle line of segmentation.
- Check feasibility – what would it take to adopt your preferred strategy from your starting point, and would that be feasible?
Check out the full research report for more guidance and how with this information you can then design a deliberate CX and embed it into your workflow and governance.
Do I really need a CX strategy?
Yes, you absolutely do. You cannot expect to deliver a consistently favourable CX in an ad hoc way, especially as client experience impacts firms’ profitability twice.
If, like many asset managers, you have lost the ability to differentiate yourself reliably by either product or pricing, you should consider CX as a non-discretionary approach to revenue retention.
Even if you are one of the Top 20 most recognisable brands, relying on brand alone is a risky business strategy, because market events can erode companies’ reputations rapidly – and they frequently do.
Our research data indicates that to choose not to have a CX strategy is essentially a choice for ‘customisation-as-standard’. Far from satisfying clients, such a strategy of ‘always saying yes’ ultimately results in an unfavourable CX that stimulates ‘unwelcome client behaviours’ (see our CX research for an explanation). This is because the increased complexity raises costs and operational risks – both of which work against clients’ interests in the long run.
Furthermore, we heard from firms about how they are tackling CX tactically through discrete initiatives, for example, onboarding projects, reporting projects, billing projects. But the list of issues the industry has identified spans the client journey, which implies they are the symptoms of a deeper and systemic root cause.
Unless firms go to the heart of the matter and implement a CX strategy, they will find it harder to join-up their tactical efforts and be slower to seize the benefits CX can bring to profitability.
Immediate action you can take
If the situation above sounds familiar, we advise firms to use the Accomplish model of Client Experience to define their CX strategy as part of a broader response. It starts with a CX Health Check to diagnose the quality and sustainability of your current CX before rushing into more fundamental changes.
Contact us if you would like to learn more.