Monday 21 December 2015
The top 8 ways to prepare for digital disruption
Monday 21 December 2015
Use these tips to help you navigate and survive in this challenging environment.
1. Accept that change is inevitable
It might be tempting to hope the challenges of digital disruption will abate, but all signs suggest disruption will be the new normal. Society is now digital, and the web and smartphones are intrinsic parts of modern life. These factors will not change, and they have already changed the people that use them. Their impact will be greater still for those generations who have never known anything different, and these younger generations will someday be your customers. So learning to adapt now will place you in a better stance today to predict and plan for the changes that will become reality tomorrow.
2. Watch other industries
Digital disruption has already taken place in other sectors, such as book and music retailing. While they might seem a world away from financial advice, they still involve a brand marketing a service to a client whose behaviour and expectations are significantly different to what they were two decades ago. The best opportunity to profit from disruption is to understand the mistakes of other sectors and avoid repeating them. For instance, while selling of traditional books is in decline, sales of books through electronic reading devices is growing. Therefore, would communicating with your clients through different channels be appropriate?
3. Be curious about your own industry
No one can know the future, but it is possible to extrapolate possibilities based on current observations. While robo-advice might be responsible for a tiny fraction of funds under management today, it is growing, and can be assumed to play a bigger role in the future. As with all technology, it is also likely to become both more sophisticated and cheaper over time. Study emerging technologies and models within your industry and ask what would happen if these went mainstream, and what opportunities might they unlock?
No one can know the future, but it is possible to extrapolate possibilities based on current observations
4. Learn how disruptors disrupt
There are no secrets regarding the tools that digital disruptors use to gain a foothold in markets. Learning about these tools can provide insight into how they work, and also into how they might work for a traditional business. Common amongst these tools are digital marketing and service delivery, data gathering and analytics, and a culture that stays close to customers and incorporates feedback into ongoing product development. Can you use these tools to redesign your own services?
5. Explore new channels
Almost everyone carries a smartphone today, but rarely are they used to make telephone calls. They are a person’s portal into a world of information and services. What other opportunities does a smartphone present in terms of enabling your clients to engage with your services? Could a secondary service offering delivered purely through a smartphone open the door to a market segment that is otherwise unable to pay for advice? Talk to local mobile specialists such as TigerSpike, Outware or Appster to learn the options.
6. Get close to your customers
Your customers are with you for a reason, and would rather stay with you than go elsewhere. When was the last time your surveyed your customers to ask them why they like working with you – or what you could do better? Are there other services that they would like to buy from you? And what would they be prepared to pay? Online tools such as SurveyMonkey provide a simple tool for soliciting feedback. Staying close to customers not only keeps them loyal, but may see them advocating on your behalf – and hence sending you more clients. Furthermore, happy customers can also act as a testbed for your ideas, enabling you to test concepts quickly and inexpensively.
7. Collect and use data
Companies that win in digital disruption are often those that are best at gathering data and using it to find competitive advantage. Are you capturing client data in such a way that you can generate insights across your entire client base? What do you know about their demographics and broader circumstances? Invest in a customer relationship management system such as Salesforce or SugarCRM to harvest client data. The goal then is to look for correlations between clients of a similar profile and use this to craft new service offerings that will either draw in similar new clients, or unlock cross-selling opportunities your client pool?
8. Find partners
The complexity of digital disruption means it is impossible to take on all possibilities on your own. Many new market entrants have shown willingness to partner with incumbent businesses to accelerate their growth. What new entrants could you potentially partner with, such as robo-advisers like OwnersAdvisory or Betterment, to expand your existing service offering, and defend your client base from other new competitors? After all, if you can’t beat them, why not join them.