Generally favorable market conditions have helped many wealth management firms put up strong performance and growth numbers over the past few years. This positive momentum is likely part of the reason why many wealth management CMOs are looking at 2016 with optimism.
One recent study by Scorpio Partnership highlighted some of the ways that CMOs of U.S.-based wealth management firms are showing this optimism. One sign is that over half (54%) of the CMOs in the study reported that they expect increases in their 2016 marketing budgets.
This study also documented the fact that client satisfaction tracks closely with wallet share. The higher the satisfaction ranking earned by a wealth manager, the greater percentage of investable assets clients place and keep with that provider. In the study, clients who ranked satisfaction with their wealth manager as “good” had more than 50% of their total assets placed with that manager. When clients’ satisfaction rankings improved to “very good”, wallet share increased to 62%.
Wealth management CMOs know that keeping clients happy is the key to success. It’s not surprising, therefore, that so many of these marketing leaders are focused on improving the client experience their firms deliver, especially the digital variety.
Measurement – A Must for Continued Progress
What is surprising, however, is industry research that shows that many wealth management CMOs aren’t measuring the business impact of their digital client experience initiatives. In the Scorpio study, for example, among the firms that have moved forward with these projects, about a third of them reported having no way to track their programs’ results, or assess their ROI.
A separate study reaffirmed the lack of ROI measurement of tech investments across the wealth management industry. In Financial Planning’s 2015 Tech Survey, only 8% of the CMO respondents said they conduct formal ROI analyses of marketing programs, and a mind-boggling 32% of them reported conducting no ROI assessments whatsoever.
No doubt there’s lots of pressure on wealth management marketing teams to build and deliver a great online, digital and client experiences. But to continuously improve that experience, and prove its contribution to top- and bottom-line results, wealth management CMOs and their teams generally need to:
- Establish a baseline
- Set measurable goals
- Track progress against those goals
- Observe results and test changes
- Make adjustments based on data.
There are many approaches and methodologies that wealth management firms can use for capturing and analyzing the ROI produced by a digital client experience initiative. Several of these are discussed in a blog post from Marketo, a provider of marketing automation solutions.
ROI measurement techniques all have their pros and cons. The most important thing is for a wealth management firm to pick one and start using it. The good news for firms is that critical elements of the digital client experience can be tracked and measured more easily than some other, more traditional marketing methods.
There’s a fair amount of uncertainty for wealth management firms that are entering the digital arena. The sooner these firms can analyze the data driving their digital customer experience initiatives, the sooner they’ll get on a path of continuous improvement and competitive advantages.