Staying Reasonable with Website Design

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While most advisory firms have offices for client visits, the actual store front is the firm’s website. This is most often the place a prospective client first interacts with the firm and with portals becoming ever more common, it’s always the connecting place for clients. In the digital world we’re in, a stale adviser website raises questions and a contemporary design accelerates engagement.

Website design is a moving and subjective target. However, there are two important concepts that guide when to update an advisory firm’s website: 1) the diminishing return curve; and 2) the range of reasonableness.

Investing for the Biggest Benefits
The diminishing return curve is one of the most powerful decision-making concepts because it defines the value of investing to the benefits received. In the graph below, on the steep part of the curve (the “A” marker), greater benefits are gained for a given dollar invested.

loury_december-jpgThe further up the curve (“B”), fewer benefits are gained, ultimately leading to the curve flattening (“C”) where few benefits are achieved for the dollars paid. Generally, people often make continued investments expecting the same impact achieved with the first dollars; a linear relationship doesn’t exist. This leads to disappointment as assumed benefits fail to materialize.

For example, we see the diminishing return curve in portfolio risk management. The diversification benefit of the second holding in a portfolio is substantial, but the 30th holding has only marginal benefit (i.e. advisers often over-diversify portfolios leading to extra costs).

The flat part of the curve (“C”) is where resources are wasted. Waste occurs in failing to appreciate the “range of reasonableness”. This concept makes an essential marketing point: don’t be substandard, but being better than the best is unnecessary to win.

Generally, the range of reasonableness exists in the graph’s “B” area.

Monitoring for Shifting Curves and Reasonableness
People often have the mistaken belief that the diminishing return curve is static. In marketing the curve is dynamic and shifts with changing tastes.

For websites or marketing, a new curve doesn’t necessarily present itself at the onset of a design or presentation trend, but only after it achieves general appeal. This adoption occurs at very different speeds depending on the industry. In high-design businesses such as architecture, fashion and photography, shifts can occur in a matter of weeks. For wealth advisory, new presentation design standards emerge more slowly.

Knowing When a New Range Emerges
A new design trend that takes hold shifts the range of reasonableness such that what was once reasonable will soon be substandard.

We see this today across advisers’ websites, particularly independent firms that don’t have dedicated marketing resources. For example, a painfully large number of adviser sites still have the old tabbed menu that was within the reasonable range ten years ago but now is terribly stale. The new standard being a single page that tells a firm’s story in a graphical, vertical scroll.

Awareness of what is stale and contemporary doesn’t happen in a vacuum. Advisers’ clients and prospects (and advisers themselves) experience new website designs when visiting pages of companies in other industries. While wealth advisory isn’t judged for high-design achievement, the range of reasonableness does evolve based on other industries’ influence.

A Simple Monitoring Plan
There are five steps an adviser can do to keep a website in the range of reasonableness.

  1. Each quarter, take screen captures of non-financial sites’ home pages (e.g. news, sports, entertainment, shopping); these will be on the design frontier.
  2. Paste these captures in a document.
  3. At the same time as No. 1, visit major investment/wealth advisory sites and take screen captures of these sites’ home pages; paste them in the document too.
  4. If No. 3 shows designs similar to No. 1, the range of reasonableness (“B” on the curve) has shifted.
  5. Present the document to the firm’s web designer to incorporate the new design elements into the firm’s site.

Lost Business to the New Mandate
The competitive mandate is this: as new website designs and functionality become common in financial sites, an adviser’s market becomes accustomed to a new range of reasonableness. The now stale site (below the new range) implies a firm falling behind. First impressions do matter in decision making, and the greatest risk—and one unknowable—is the number of prospects that never contact an advisory firm that has a stale site. Remaining in the range of reasonableness is a small investment that brings valuable business benefits.

Kirk Loury

 

Kirk Loury
President
Wealth Planning Consulting Inc.
Princeton Junction, New Jersey

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