Just a few years ago, if you asked someone for an example of a personalised service, it could be as simple as a local supplier who knows not only their name but details about their family and what they do for a living.
Or, it could be a bespoke service like tailoring, conjuring up images of Savile Row and a cluster of eager-to-please assistants ready to satisfy the client’s every whim.
But, I hear you say, delivering a personal service where you can tailor your delivery to the customer’s individual needs doesn’t come cheap. It is labour-intensive. It’s not readily available to all.
Well maybe all that was true. But that’s changing and digital advances mean we’re now in the era of mass personalisation.
We have the tools at our disposal these days to understand customer behaviour in a way that should, if used properly, allow us to give them exactly what they want.
The data that can be generated allows companies to provide relevant, tailored services to consumers in a way that simply wasn’t possible until recently.
And that’s the expectation too. All of us have, to a varying degree, taken advantage of personalisation, whether it’s in the way we buy music, view films and TV programmes or travel.
Empowered by digital devices (and by social media), we’re getting increasingly used to being able to dictate what we want, how we want it and when.
We now have ‘personal assistants’ that respond to our every request or command.
We can use our phones to control our central heating and lights and check what’s in our fridge (or what the dog’s up to) from wherever we are in the world.
We can use real-time data, such as that from energy smart meters in our homes, to compare products and services and analyse costs.
Firms that don’t offer at least some degree of personalisation or customisation risk losing the trust and loyalty of their customers and potentially suffering a revenue dent as a result.
Those that continue to view their customer base as one generic mass will soon alienate a large chunk of them, especially if they persist with one-size-fits-all products and services that will invariably be irrelevant to many of those customers.
But personalisation is only made possible by fully embracing the possibilities of digitalisation.
According to the 2016 World Wealth Report by Capgemini, companies with poor digital experiences could be putting up to 56% of their net income at risk as clients turn to other providers with a better grasp of digital tools.
There’s a school of thought that one area in which technology is limited is in enabling personalisation in wealth management, where face-to-face has long been at the core of the service are questionable, or at least limited.
This is a narrow view of what we mean by personalisation, however. The option of choice is increasingly becoming a differentiator.
Take communication, for example.
You may still prefer to have face-to-face or phone conversations with your clients, but those same people may on occasion value the opportunity to communicate through other means, such as Skype meetings, video-conferencing and ‘chat’ apps. In fact, what they will probably value most of all is choice.
It’s also easy to assume that certain clients may prefer traditional channels, but they will likely be more than comfortable with interacting digitally - and they will expect to have that option available to them. It will increasingly become a differentiator and a point of competitive advantage.
There are different ways to engage digitally with different types of clients.
For instance, while those who don’t require control or involvement may particularly value the ability to contact their adviser by mobile app, customers who are more proactive, involved and interested may place a greater premium on digital features such as performance tracking and trade execution.
The wealth management business that uses data to really understand what clients want and how they behave will be able to anticipate their needs and even provide solutions to problems before they are crystallised.
This is a level of digital personalisation that strengthens relationships and builds trust in a way that is unprecedented in the wealth management world, but which is increasingly familiar in other spheres.
They are just some of the reasons why personalised service propositions are no longer just an optional extra for wealth managers. They are essential for any firm that values existing client relationships and who want to build a broad long-term customer base.
None of this involves abandoning the strengths of traditional models.
Rather, it’s about complementing the existing proposition and quality of service by using digital technology to get the best out of the business on behalf of clients.
Richard Ross (pictured) is digital product manager at Iress