I have a lot of feelings on what the finance sector can learn from retailers.

In my previous life I worked in the dreaded space of Executive Search or “Recruitment” as most refer to it. I learned valuable lessons in that time, especially what is happening in the retail marketing space and how companies differentiate themselves to attract new customers, all while retaining their core base.

A comment that we heard repeatedly was that the younger generation (I’ll refrain from using the term millennials for the moment) are less loyal to companies than their parents. “Generation Y” is more about finding the best deal for the item they are looking for. We aren’t lazy, we’re just about finding what we want at a price we feel it deserves. However, when we find a brand or product that we love, we will stay with it; but, we may not go to the same company to buy the product. With that in mind, consumer facing companies have to market themselves to show that they understand their customers’ wants, needs, desires, and contents of their wallets.

Take Apple for example. Steve Jobs aimed to give us the items we didn’t know we wanted. How else have they been able to sell billions of iPhones and have repeat customers?  It’s definitely not the price point that keeps us engaged and wanting more. Apple even has a program in the US where you can upgrade your iPhone every year with your respective mobile plan, instead of waiting the usual two years. The consumer gets a new phone (that they didn’t know that they wanted) when they do want it.

Then there’s ASOS – a pureplay retailer that prides itself on having an easy to use website with unlimited next day delivery for less than £10 per year. Imminently, ASOS will be more valuable than Marks & Spencer, a well-known albeit slowly fading UK institution.

Finally, there’s Amazon – the conglomerate who just paid a fat paycheck for Whole Foods and almost immediately decreased the price of avocados for the soccer moms, among other items.  Amazon also own a host of other companies including Audible, Goodreads, IMDB, Twitch, and Zappos. Much like Netflix, Amazon sucks in their customers: Prime subscriptions; movies; next day delivery in the UK; Prime Day sale; and now a fashion line. With the plethora of products it sells, it keeps the consumer hooked and almost at its bidding. I mean, I’m already counting down for the Black Friday and Cyber Monday sales.

Did I only choose companies starting with A because it’s the first letter of my name and I like it?

Possibly. But in all honesty, it’s because Apple, ASOS, and Amazon are A+ students in the world of marketing. They are aggressive marketers, with product placement on billboards and public transport, and even some iconic TV ads (when you hear Are You Gonna Be My Girl by Jet, do you think of their music video or people dancing with the iconic white earphones?). Although the marketing budgets of these companies are more than a majority of us will see in our lifetimes, they do not publish complete eyesores that make us want to avert our gaze. These more minimalist advertisements pay off because of the simple fact that the products sell themselves.

You, the asset management firm, may not want to be exactly like an Apple, ASOS, or Amazon – although having a large number of customers and being acquisition hungry never hurt anyone. You may want to have similarly slick websites that are intuitive and responsive, but more than anything, you want increased AUM and lifelong customers who birth more. How do you do this?

You build a brand.

Apple does “think different”, and Amazon does aim to be “Earth’s most customer-centric company”, so why don’t financial institutions follow through with their ‘mission statements’?

After the largest financial crisis of our generation, we have lost trust in almost anything in the realm of finance. Goodbye to international banks where CEOs receive millions for sitting at a desk and looking down on “peasants”, hello to community banks (at least in the United States) who make you feel cared for. To build a brand and a following you need trust, and that is something that the financial industry needs to work on. Own up to the fact that your funds may not always perform 5% above average – the stock market is an emotional rollercoaster that you’re putting in a pretty little fund package for your investors. Own up to the fact that there are traders who are purely hungry for their bonus and are not focused on the Elliots of our world who need to pay off college loans and save for retirement.

Millennials (now I’ll use the term) have grown up with this mistrust.  Some of us saw our families and friends lose houses, savings, nest eggs. We can trust Apple, ASOS, and Amazon because, not only is their customer service better than average, we feel that we are a part of their journey. That may be because they have crept into our lives in such a way we don’t know how we would be – or if we could just be– without them.

With asset management firms, we don’t have that connection. We don’t know what our returns will be this year, or in the next five.  We don’t know if the firm will go under, or when an advisor may leave, or if exorbitant fees will negate any gains we earn from the investments. You need to market yourselves in a way that show you are worthy of us investing our money in your way of thinking, instead of us taking the time to research companies and invest in them ourselves.

What if Amazon opened up their own asset management and advisory arm? They could potentially become our most trustworthy financial advisor because we already do trust them. It’s just like with people: we listen to those we know more than someone off the street. With Amazon, however, they already know our spending habits, likes and dislikes, even who are family members are due to the “secure” storage of our data.

Now imagine if Google were to do this. Google has even more data about us since they have a browser, phone operating system, email, search engine, and who knows what else? Take a step back and think about the companies Google and Amazon would tell us to invest in (other than themselves). They can tell what causes we are interested in and take that into account when looking at a company’s CSR initiatives, and even the right type of diversification for your investments when it comes to sectors, market cap, etc.  The Amazons and Googles of our world could in fact create personalized funds for each user and alert us to buy and sell specific stocks to better represent what investments match our lifestyles and our end investment goals.

Not quite as big a long shot as you’d expect, right?

So what lesson can you learn from this? Some say that millennials don’t work hard enough, which isn’t true. We just want you to work harder to impress us, and market in a way for us to buy into your ideas after all of the disasters we’ve seen. If you do that, and are consistent, you have us until you do something to make us mistrust you again.

Alexandra Filippova

Customer Success Manager at Kurtosys
With experience in consumer-facing executive search and working previously as Head of Client Relationships at an independent equity research firm, Allie brings her experience of the financial industry and passion for customer success to the Kurtosys team. She shares her enthusiasm for all things regulation and is focused on driving positive relationships among our technology experts and asset management clients. Allie also harbors a multilingual skill, dabbling in languages such as French, Swedish, Russian, and Mandarin, and you’re most likely to find her at home indulging with wine and cheese (husband optional).