Ross Dawson kicks off a promised series of posts on megatrends in professional services with one on client sophistication. At first I thought this was just going to be telling us about how tough clients are these days. Ross talks about pressures on costs, but also about collaboration. (I read this in the context of some his other posts, such as one on moving beyond zero-sum thinking.) He gives the example of ABN Amro:
The downside of increasing client sophistication is that you can’t fleece your clients, and you can’t survive your whole career on what you learned in college. The upside is that sophisticated clients help you to develop your own capabilities, they understand what rewards they need to provide to get the best, and they know how to work with you so you can do your best. Investment bank ABN Amro runs a training program for its fund manager clients that gets them to play the roles of banker and fund manager in order to teach them trading techniques, how to use their high-value research, and even how to use ABN Amros proprietary trading models. The advantage for ABN Amro is that their clients understand better how their bankers work, and in turn what it takes to get great service from them.
On the one hand, information travels very freely these days, so pulling the wool over client eyes gets riskier and riskier. On the other hand, most of us experience some form of information overwhelm so it’s potentially easy to get into relationships that resolve down to catching each other out – for what isn’t known. Ross is arguing for something more facilitative… where both sides get to explore the unknown together – I expect ABN have as much to learn from their training as their clients do.
My second cent: maybe it would be less loaded to talk about sophisticated relationships rather than sophisticated clients?