Happy New Year – and welcome to the year of the customer.
Whilst the Chinese may be preparing to celebrate the year of the monkey, we at Platforum have declared 2016 the year of the customer.
The parallel should be obvious. Of course, the monkey in the Chinese zodiac is clever. The ancient title “marquis” is pronounced “hou,” a homonym with “monkey.” It is auspicious.
Customers are auspicious too. In the West, they signify revenue.
There was a renewed focus on customers in 2015. Fund groups, life companies and platforms increasingly talked about investors, savers and consumers. We believe this year we will see an even greater emphasis on customers. But who is this mythical creature, The Customer?
Several weeks ago I was at a dinner at which the label given to customers was hotly debated. One industry guru implored that we all do away with the term “consumer” and adopt the word “investor” instead. Our customers do not consume our products; they invest in our products.
Language is important and a simple change in how we refer to our customers can have a big impact on behaviour. If we want to evolve from a consumer culture to an investing one (or at least encourage an evolution in that direction) we need to start with the labels we use for our customers. Whilst Platforum’s research suggests that more people are investing, the reality is that there are still too many who do not. There are also “savers” and there are “consumers.”
We view the potential pool of customers on a continuum: from die-hard “do-it-yourselfers” to “blenders” (who dabble a bit but also rely on advice). The customer archetypes stretch from “outsourcers” (who leave it all to a professional financial adviser) to “savers” (whose only investments are cash). Finally, at the other end of the spectrum, are people who hold no savings or investments at all.
Our industry has a responsibility to help all of them. And we are rising to the challenge.
The wonderful news is that our Consumer Insights report published today reveals that more people are saving and investing than at any time in the past five years since we began our tracking. There are now 28 million savers and investors in the UK and just over 14 million are investors (i.e. they hold risk-based investments). In fact, the number of people that say they are investors has grown by nearly 2 million in the past year alone.
So yes, our customers are investors but there are still many savers and consumers who are not yet accessing the markets. In fact, that sizeable figure of 14 million investors translates to only a quarter of UK adults. Yes, you read that right: just one quarter of UK adults say they are investors. There is a lot of room to grow our businesses. We can support people’s most precious needs as they grow older: financial stability, comfort in retirement and maintaining quality of life.
We will be celebrating the year of the customer over the next twelve months, culminating with our annual conference “Platforum 2016” on October 4th in London.
Let’s aim for another two million investors in 2016 — how’s that for a new year’s resolution?! We’ll publish an update to our Consumer Insights research in June. Stay tuned for a progress report. We’ll be monkeying around in the meantime.