Although moving client activity to the web offers many benefits — including a rich user experience for your clients and cost savings for you and your dealer — evidence shows that the web is only a fruitful resource when combined with traditional approaches.

As an example, Grocery Gateway burst onto the scene 17 years ago as an online delivery service that allowed consumers to buy their groceries from a website and then have the items delivered to their front doors. The company was going to change the way consumers shopped for produce and it raised $100 million — only to be sold a few years later for just $7 million. The problem appeared to be that many consumers actually preferred the physical shopping experience and wanted to squeeze the tomatoes before purchasing them as well as perhaps enjoy the opportunity to make impulse purchases in the store rather than relying solely on the “quick list” of food items on the website.

Similarly, I was part of a team years ago that developed a pilot for a bank’s branches. During this process, we created an electronic brochure carousel website for a variety of products and services — such as credit card applications, small business loans, insurance and about 15 others — that the customer could peruse and even email to a relative or friend from a kiosk that sat in a lounge area within a bank branch.

The bank’s motivation for this project, in addition to reducing the printing and destruction costs associated with obsolete printed inventory, was to create a richer customer experience vs. the traditional wall of brochures that confronts visitors as they enter the bank. An unexpected result from the pilot was that far from helping facilitate the sales process within the branch, it eliminated a sales situation by allowing customers to serve themselves without affording the sales person an opportunity to close the sale. Clients were entering the branch, going directly to the kiosk to find what they wanted, and then leaving without even speaking to any staff. The pilot project was successful inasmuch as it provided great insight in consumer behaviour, but it disrupted the sales connection. Thus, the rollout was dropped.

And when online discount brokers first came on the scene and started attracting do-it-yourself investors with robust web functionality and ever lower commissions, the fear among the advice-giving channel was that advisors might be displaced. Although discount brokerages have now established a clear position, the capital market’s increasing complexity, combined with busy lifestyles, will secure a long-term role for advisors.

Next: Complement other communication channels
Complement other communication channels

complement other communication channelsThe magic of being successful when using the web is that it should complement other communication channels to enrich the overall customer experience. And when it’s used to reduce costs, it must be part of a multi-channel strategy that provides options and not as “all or none.”

Case in point: the emergence of digital textbooks in the classroom is helping to transform the educational system by reducing overall costs while enriching the student experience. In December 2013, Archbishop Stepinac High School in New York became the only school in the U.S. to provide access to all digital books for all students, which they download from the cloud.

“The online history books, for example, include videos on subjects ranging from Woodrow Wilson to Malcolm X. The science books show scientific processes in motion. The English books grade an essay and offer a student a worksheet on the proper use of commas if it’s needed,” said the school’s vice principal. “Students can highlight passages or leave notes to themselves in the margins, without ruining the book for anyone else.”

Teachers are also using these tools to enhance their techniques and appeal to students’ different learning styles, modifying the curriculum and even customizing the digital textbooks to reflect their own teaching priorities. And students prefer to carry an iPad and a lunchbox in their backpacks instead of a 30-pound load of textbooks.

Financial advisors should view technology in the same light, meaning, how can you complement the human experience using the web and provide tools to educate and ultimately convince clients? Many aspects of the financial services industry are complex but, used effectively, technology and the web can enhance relationships and sales situations.

Just as teachers are now incorporating more technology in the classroom to engage their students, advisors can use the web to become more effective in their jobs or in coordination with clients to walk them through investment scenarios. For advisors seeking to strengthen their relationships with clients and provide better customer service, online tools such as client-relationship management solutions, portfolio planners and proposal generators, will earn them credibility and facilitate the sale.