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Grand unifying theory: Difference between revisions
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{{a|devil|[[File:Grand unification.jpg|450px|center]]}} | {{a|devil|[[File:Grand unification.jpg|450px|center]]}}''What follows presumes you are in an institutional [[financial services]] world where even small client revenues are in the hundreds of thousands of dollars per year. I am thinking specifically of [[prime brokerage]], since that’s what I know. But it ought to apply elsewhere too.'' | ||
The [[commercial imperative]], above all else, is to have clients coming back. How to have clients come back: have them ''want'' to come back. You catch more flies with honey than with vinegar. | |||
===[[Commitment]]=== | ===[[Commitment]]=== | ||
How to ensure clients stay with you? You indicate '''[[commitment]]''' to them. Indications of [[commitment]]: | How to ensure clients stay with you? You indicate '''[[commitment]]''' to them. Indications of [[commitment]]: | ||
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*'''''Don’t'' commoditise''': In your dealings with clients, avoid the appearance that they are just another customer, and you are managing to margins. Never put them in a triage queue. If you build automated products (direct market access for example), do this for ''their'' convenience, not yours, and charge accordingly. Your premium services should not be commoditised, and if it is (eg DMA) then augment it with a premium overlay of personally delivered analysis, insight, and market colour. By all means use tech below the waterline to help you deliver that personal insight, but only deliver it electronically where the client asks for that, and even there overlay ''that'' with more meta-coverage. | *'''''Don’t'' commoditise''': In your dealings with clients, avoid the appearance that they are just another customer, and you are managing to margins. Never put them in a triage queue. If you build automated products (direct market access for example), do this for ''their'' convenience, not yours, and charge accordingly. Your premium services should not be commoditised, and if it is (eg DMA) then augment it with a premium overlay of personally delivered analysis, insight, and market colour. By all means use tech below the waterline to help you deliver that personal insight, but only deliver it electronically where the client asks for that, and even there overlay ''that'' with more meta-coverage. | ||
*This is not just a matter of appearances. Commoditised products have lower margins and provide less value. Standardisation and commoditisation: | *This is not just a matter of appearances. Commoditised products have lower margins and provide less value. Standardisation and commoditisation: | ||
:*guarantee margins will tend to zero (if you have solved the risk you have also eliminated the premium, and in this day and age, it will vanish almost | :*guarantee margins will tend to zero (if you have solved the risk you have also eliminated the premium, and in this day and age, it will vanish almost immediately: if ''you'' have automated it then so can everyone else: your market advantage is gone) | ||
:*Of course because of [[non-linear]] effects, in most cases you ''haven’t'' solved the risk; it is just that the market prices itself as if it has, because everyone labouring under the same [[modernist]] delusion that “we have comprehensively syndicated risk/banished boom and bust/reached the sunlit uplands”. Yet, [[black swan]]. And no, you cannot crunch more data and thereby anticipate/solve [[black swan|black swans]]. | :*Of course because of [[non-linear]] effects, in most cases you ''haven’t'' solved the risk; it is just that the market prices itself as if it has, because everyone labouring under the same [[modernist]] delusion that “we have comprehensively syndicated risk/banished boom and bust/reached the sunlit uplands”. Yet, [[black swan]]. And no, you cannot crunch more data and thereby anticipate/solve [[black swan|black swans]]. | ||
:*Indicates ''absence'' of [[commitment]] | :*Indicates ''absence'' of [[commitment]] | ||