Over 30 Robo Advisors fight for market share in Germany. For investors, the various offers are difficult to compare, which dampens the desire to get started. A four-step communication approach helps to attract long-term customers and grow the business.
Large supply, low demand – so far in Germany only a few private and institutional investors use the digital investment services of so-called Robo Advisor. Their advantages are obvious: in short, they help to make asset accumulation and investment more transparent, convenient and cost-effective. Over 30 providers are now active in German market, and the concepts are mostly based on exchange-traded index funds (ETFs).
Many providers are not yet profitable
So far, the business is developing predominantly with a blocked handbrake: the majority of Robo Advisor’s assets under management are in the double-digit million range at best. Thus, a profitable business is still far away. What are the reasons? In the spring of 2018, Stuttgart Stock Exchange did a online survey which showed 42 percent of Germans do not feel like being served by an automatic online consultant. Another 22 percent do not know Robo Advisor yet. But there’s good news too: 33 percent of investors are interested in digital asset management!
Potential customers miss orientation
There is a lack of orientation for both interested and uninformed people. Although numerous comparisons are on the market – according to Google‘s report, the search for “comparison Robo Advisor” gets over nine million hits. But individuals determine different “test winners” according to different criteria. Therefore, it makes sense for Robo Advisor to first focus on their audiences to understand their needs and purchase decision-making processes.
Professional communication can assist in four phases
When it comes to turning the target group into customers, professional communication helps. This was supposed to accompany the Robo Advisor through four phases. Firstly, it is important to clarify the fundamental relevance of the offers so that the digital alternative to traditional investment advice or online brokerage by self-decision makers becomes part of investors’ “relevant set”. If this is successful, then the own second brand should be positioned in such a way that its added value quickly opens up and an own profile becomes recognizable. Experience has shown that the fundamental decision of investors in favour of a provider is not sufficient to develop long-term business. Even in onboarding. The third important phase – many potential customers are lost. And last but not least, it is important to fill the accounts and accounts of new customers with capital.
The appropriate communication strategy helps to successfully shape these four phases of acquisition and business development. If then the performance is right, nothing stands in the way of a fast growth of the mostly still young companies.