The personalization of goods and services is now a business essential. Particularly as the pandemic wanes, consumers have been conditioned to digital forms of nearly everything—shopping, banking, dining, health care and more—all in search of convenience and customization. Businesses of every size and sector are adjusting accordingly; and thankfully technology is enabling significant advancements, especially in personalization. But as our industry, wealth management, demonstrates: technology alone isn’t the future—it’s the right combination of technology and human expertise.
For corporations, personalization is the act of tailoring an experience or communication based on known individual preferences—which, in turn, improves a company’s productivity and increases customer satisfaction. According to McKinsey, companies that grow faster drive 40% more of their revenue from personalization than their slower-growing counterparts. Personalizing a customer experience can also reduce acquisition costs by as much as 50%, lift revenues by 5 to 15%, and increase the efficiency of marketing spending by 10% to 30%.
To compete in today’s market, professional service firms must integrate more personalization into their business model, tailoring their approach to each customer’s desires and needs on a case-by-case basis. According to a survey by Infosys, 86% of consumers say that personalization has some impact on what they purchase; and one quarter admit that personalization “significantly influences” their buying decisions. What’s more, Mckinsey’s Next in Personalization 2021report reveals that companies who excel at demonstrating customer intimacy generate faster rates of revenue growth than their peers. And, as stated in the report, the closer organizations get to the consumer, the bigger the gains.
With limited access to in-person events and institutions, the Covid-19 pandemic instigated an even larger push for businesses to match individual preferences, as we all adjusted how we worked, learned, entertained and lived. The most successful companies leverage consumer data to offer recommendations to customers based on past behaviors and patterns.
And certain businesses are quickly learning to adapt. Meal delivery services such as HelloFresh now offer customized culinary options depending on consumers’ dietary needs and restrictions. Streaming services showcase a tailored selection of TV shows and movies based on a user’s previous watch history.
When it comes to wealth management, however, personalization all too frequently means losing access to an expert. And while advanced technology has enabled significant strides in automation, we’ve found at Farther that when it comes to wealth management: human expertise must blend seamlessly with technology to truly provide a worthwhile personalized experience. By leveraging cutting-edge technology to help automate simple administrative tasks and back-office functions, we empower our expert advisers with more time to dedicate to their clients.
If a sector or company doesn’t adapt to this new reality, they do so at their own peril. Due to their largely antiquated mode of operations, for example, legacy banks are being quickly left behind by retail and tech giants that are investing heavily in their customer experience. In the digital age, banks can no longer assume that customers will adjust their needs to meet antiquated, pre-existing services. According to a recent survey: two-thirds of today’s customers expect their financial institution to understand their unique needs and expectations, and over half (52%) expect offers to always be personalized. To accomplish this, banks and financial firms will need to account for their customers’ history with their institution, utilizing pre-existing data to anticipate their customers’ needs proactively.
Personalization is not just beneficial to a company’s revenue and growth. It also creates a more competitive business model by addressing a myriad of customer needs. Our company just celebrated the closing of a successful Series A investor round by blazing ahead in our efforts to personalize customer experiences. As the world continues to evolve, consumers’ needs will continue to grow and expand, but there will always be a universal need for companies that make our lives simpler and easier, combining advanced technology with human intelligence.
Taylor Matthews is CEO and co-founder of Farther. Brad Genser is CTO and co-founder of Farther.