Are You Skating on Thin Ice?

I skate to where the hockey puck is going to be, not to where it has been. – Wayne Gretzky

You dont have to be a hockey fan to realize the brilliance of this quote and how this strategy enabled Wayne Gretzky to be recognized as the undisputed all-time greatest hockey player.

Where is the puck going in the financial services world?

Here are three trends worth considering:

1. Behavioral Finance: Translating Theory Into Practice

Independent research shows that 93.6% of the financial planning process is the behavioral management of clients. Yet our research shows 53% of advisors invest 1 to 2 hours of time in the discovery process, and 50% of advisors spend under 6 hours in the complete financial planning process.In addition, behavioral finance has been given a significantly increased level of importance with the UK regulator publicly expressing its views. As other regulatory authorities strengthen their suitability compliance requirements, will they go down a similar path? And what does this mean for advisory firms?

Perhaps it is time for firms to start preparing now for a regulatory environment that is requiring greater recognition of a clients behavioral biases in making suitable recommendations.

Do you have a system in place to holistically determine the complete financial personality style of the client? Or, are you still relying primarily on your intuition?

2. Target Marketing: Moving Beyond Demographics to Behavior

For decades, financial service marketers have used demographic segmentation for product development, product positioning, marketing communication and results measurement. Traditionally, this segmentation has been done based on characteristics such as age, income, gender, family life stage, occupation, education, race, etc.Terms such as Baby Boomers, Gen-X, and Millennials were created with generalizations on how to market to these groups. In addition, when we overlay men versus women, the marketing mayhem begins!

Despite continuing popularity, the research (Journal of Financial Services Marketing, Suboptimal Segmentation: Assessing The Use of Demographics In Financial Services Advertising) found that while demographics can explain broad behaviors, they play a weak role in explaining brand preference, product purchasing, innovation adoption, channel use and technology uptake.

Behavioral marketing is gaining followers within the marketing community while the dimensions of how to segment based on behavior differs by firm. While some organizations will segment based on internal purchase (I have business checking so maybe I need a business credit card), payments, and/or use dynamics (how many times I use an ATM), others are expanding the realm of behavior captured to include personality and social behavior.

Forward thinking firms now want behavioral data that empowers sales and service people at the point of sale.? For example, how do you present new ideas, how will a prospect absorb technical concepts, and what is the prospects preferred style of interaction are all data points that would assist to uniquely engage a prospect.

With increased competition and ever-tightening margins, firms that are not able to successfully pinpoint potential customers, cross-sell indicators and income opportunities will be at a significant disadvantage to those more progressive organizations.

Are you still stuck in the demographic marketing world or do you have the tools that can capture the communication preferences and personalities of your prospects and clients?

Creating Unique Client Experiences: Going Beyond the Talk

How do you really define creating a unique customer experience?To answer that question, you need to go back to marketing basics and take the customers perspective. From the customers point of view an excellent customer experience is one that is simply effortless and easy. No customer wants to be required to go to any extra trouble, or to fix problems, or to repeat things already communicated. The best kind of experience a customer can have is one in which he can meet his need or solve his problem completely, without having to jump through hoops or overcome obstacles. Obstacles are friction. No one has time for obstacles.

But if you dont objectively uncover the financial personality of your clients, how will you know what is an obstacle for them?? Are some financially disorganized making your attempts for them to submit budgets a frustrating experience?? Or, maybe they want options and as soon as you recommend certain investments, the lines of communication begin to shut down.

Do you have a tool that can tell you how to present products and solutions according to the communication preferences of your clients?

As you think about these trends and the actions you are taking now, are you skating to where the puck is going or are you skating on thin ice?

Now its your turn.? What are your thoughts on these trends in the financial services industry?

To learn more about gathering objective behavioral data on your prospects and clients, visit or

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Peggy Mengel

Peggy Mengel

Peggy Mengel - Business Coach - The Biz Sherpa

As CEO and founder of The Biz Sherpa, I coach and consult with executives on developing deep and strong relationships with clients, staff and most importantly, themselves. When you align your talents, passions and strengths with a strategy that fits your uniqueness, you will transform yourself, your client experience and your business.

Throughout my career, one my driving principles is to understand people before numbers. It is this philosophy that ignites my desire to help financial services firms meet the challenge of driving results through a behaviorally based strategy.

How can your firm balance the demands of effectively managing people and maximizing profits? Start building business from the "inside-out" with a coach who understands your industry and your challenges.

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