Business

A Future of Trusted Advisors: Loyalty to the customer, not customer loyalty

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Want to earn customers’ trust? Put relationship before product.

In an earlier column here on Techonomy, we discussed the role of human trusted advisors in a future of proliferating options and shorter product lifecycles—and the consequent need to get maximum return on our attention. As significant parts of the economy—largely those that create new products and services—fragment, the trusted advisor role presents a new growth opportunity, and people working in that role will be able to work closely in conjunction with smart machines. The trusted advisor makes proactive recommendations, supporting the client’s goals rather than just fulfilling current expressed needs.

The catch for companies that will seek to employ and market the services of such trusted advisors? Becoming trusted. 

Becoming trusted requires a company to overcome two hurdles. First, the company should be firmly aligned with its customers’ best interests. Second, the would-be trusted advisor should have the depth and reach to create real value for the customer. These hurdles may prove challenging for many existing companies, particularly if current revenues come from selling a product or service to the potential market or from selling the customer’s data to third-parties, directly or to target advertising.

Before we delve into trust, what exactly is a trusted advisor?

Today, trusted advisors don’t really exist at scale, but the concept is similar to a wealth advisor or wellness coach/personal trainer who offers bespoke services today to wealthy clients. Such an advisor analyzes complex contexts and needs, sorts through options, and proactively makes recommendations that maximize value for the individual customer.

The convergence of advanced analytics and ballooning context-specific data from our increasingly instrumented and connected devices makes the role more relevant and feasible as a scalable opportunity, well beyond fitness and finance.In effect, in a future world of connected data, human advisors who lean on data about their clients will potentially be able to offer beneficial advice and counsel in almost any domain. This may range from personal assistance at home or the office to coaching of all sorts. We believe the business opportunity for such services will be large.

Here’s the crux of it: A trusted advisor will succeed by understanding the customer’s needs over time, and by committing to meeting them in the best way possible. That translates to a very different measurement of success, one that hinges on the relationship.

This is where it gets tricky for existing companies.

Aligning with the customer’s best interests

Importantly, in sorting through the options for the customer, a trusted advisor is agnostic, as willing to recommend a competitor’s products or services as its own, if it has any. How many product-focused, sales-oriented, companies today can envision saying that? How might such companies “cross the chasm” and earn the trust of consumers?

Consider the width of the chasm even for the relatively new businesses–such as Stitch Fix, Trunk Club, and Birchbox—built on a subscription model of monthly boxes of apparel, accessories, or cosmetics, which the customer may purchase or return. The combination of items in each box are unique, personalized based on algorithmic processing of expressed preferences in the customer’s profile and previous acceptance patterns, and mediated by a human stylist’s judgment and experience. The customer can also provide extensive feedback about what worked or didn’t for each shipment and, for some services, can choose to share social media accounts and content to give the stylist more insight into their preferences and needs.

These services are moving closer, but true alignment with the customer is elusive. For one, stylists recommend products not from an entire world of options, but from a subset of brands—essentially acting as retailer-specific personal shoppers. Some services are building their own private lines, using data to better fit the needs of their customer bases and to work directly with apparel manufacturers to hone in on the right color/style/size combinations. This is good for customers, but adds a potential conflict for the stylist whom the client is trusting to make the best recommendation, whether it is from an external brand or a private label. In addition, because these services carry inventory, moving product is a strong motivator. And, for services that only require limited, self-reported customer information, stylists may lack a richer contextual awareness of behavior and needs to create real value.

Creating value requires data and relationships

The kind of  trusted advisor we envision creates value by knowing the customer better than anyone else. Real-time, multi-device data–not just historical data or data tied to being online or using an app—can give the trusted adviser a richer understanding of the client’s context and the ability to make recommendations in real-time, too. This hinges on the trusted adviser having access to a lot of data about the customer. Provide enough value in exchange, of course, and customers may deem it worthwhile. But that means meeting high bars for data protection and privacy—not just selling customer information to the highest bidder.

In this context, the value of data is no longer as a tradable commodity but as a basis for relationships. Yet, many companies have neither the depth of data nor do their employees maintain real human relationships with customers.

Where to start? Small. Companies can look for one area where they can start making use of the data they do have, to demonstrate greater value to their customers. In so doing, they learn more about how to create value for customers and establish their ability to be trusted as a first step toward building an advice business.

Of course, in addition to trust, companies still have to find a model that can generate so much revenue from subscriptions that they will not have to sell products or data. For some, that points in the direction of enterprise rather than individual customers.

Consider two companies that are addressing the need for training and continuous learning amid mounting performance pressures and proliferating options. Degreed, which facilitates discovery and tracking of lifelong learning across a variety of formal and informal sources, and Better Up, which provides affordable performance development/life coaching, have both shifted to focus on enterprise sales.

This shift make sense in terms of quickly gaining users, but it also points to the challenge of creating sufficient value for clients to pay for, especially when “advice” is a new category of expense for many individuals. Instead, these two companies are trying to align with what is already a significant category of expense for companies–training and career development.

Paradoxically, the more value they can provide for enterprise customers, the more trustworthy they will have to be with individual users. For individuals to offer up the type of data that yields the most insight about hopes and dreams, aspirations and roadblocks, they will likely want to know that it is secure. In this kind of case that will mean secure from the employer. The advice provider will also have demonstrate that the data is being used to generate objective advice that remains aligned with the individual’s best interests, not the company’s. 

We’ve said that this role is now a real opportunity because technology—data collection and analytics—can do some of the heavy lifting to crunch through options and match preferences. However, the human-machine symbiosis is critical to creating more value for the client, by focusing the human efforts on higher value activities. The aim is not to minimize human interaction, but to maximize the value from it.

The human touch means more than giving an algorithm a personality. There’s a difference and the customer can tell. Today many boutique fitness programs and personal trainers use customer engagement software that automates the mundane tasks of outreach, but that is a far cry from a melding of human and machine. If customers aren’t paying for the service, they might not mind the thin veneer of personalization on top of automatic reminders and daily motivational messages. But although they might be getting good advice, it isn’t personalized advice.

If a trusted advisor invests in really knowing a customer, and also knowing customers who face similar challenges in similar contexts, the real value could come not just in meeting a particular need at a point in time but in shaping the client’s experiences and helping the individual change mindset over time. Hence, some services explicitly encourage clients to try everything in the box so that their tastes might expand beyond just what they’ve always liked in the past. Similarly, 1:1 video-conference sessions, chats or personal communications can build trust and familiarity that open the door for a coach, stylist, or other advisor to offer advice and experiences that may not match what the client asked for but that will better serve their aspirations. Those aspirations will have been learned and understood by the human advisors by applying their personal judgement to the data they see generated by devices and services that surround their customer.

Opportunities—and challenges—for would-be advisors

From a consumer perspective, the rise of the trusted advisor will be almost all upside. But companies that want to seize this opportunity may face challenges in establishing trust and establishing value. In our recent paper, Approaching Disruption, we explore in more depth some of the ways a company might begin to earn trust and prove value. The key will be to start small and stay focused on a goal of truly knowing the customer.

John Hagel III, Deloitte Services LP, is the co-chairman of the Deloitte Center for the Edge based in Silicon Valley. John Seely Brown is the independent co-chairman of the Deloitte Center for the Edge.

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