Don’t change the sales channel: How Northwestern Mutual is transforming the way 8,000 financial representatives work in the digital age

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B2B2C distribution channels present a unique set of challenges and opportunities for digital product teams

In Silicon Valley, ‘middleman’ is a trigger word – a call-to-arms for the direct-to-consumer revolution. Well-funded disruptors like Warby Parker and Casper have achieved highly-publicized successes against antiquated distribution channels. But for eager upstarts and nervous incumbents, Northwestern Mutual shares some words of wisdom: you might be overestimating how much software will replace in the future.

Product leaders at the company, who are focused on building a world-class digital experience, are more confident than ever that their network of nearly 8,000 independent representatives will drive sustained growth in its relationship-centric financial services model. There’s reason to listen to the 160+ year old institution. After all, the company is still standing strong after two world wars, the Great Depression, and the Great Recession.

“It has always been an advisor* led business,” explains Vivek Bedi, VP of Consumer Experience Products at Northwestern Mutual. “The advisor is the key to our business model.”

Northwestern Mutual offers a comprehensive list of financial services and solutions from life insurance to estate planning. One of the company’s areas of focus is retirement planning, which is an intimidating craft, Bedi says, but one that virtually everyone needs to consider at some point. Unfortunately, it’s often too late by the time they do, he adds.


Aligning product development with sales channels

According to The 2018 Northwestern Mutual Planning & Progress Study, 78 percent of Americans are “extremely” or “somewhat” concerned about affording a comfortable retirement. An astonishing 33 percent of people between the ages of 54 and 72 have less than $25,000 in retirement savings.

According to Bedi, a vast and independent financial professional network leads the company’s sales and services, which is a competitive advantage, not a relic of an analog world. An empathic expert sitting across the table is the only way to engage consumers about certain behaviors. “It’s a relationship business – it always has been and it always will be,” he says.

Rather than replace financial representatives with technology, Bedi’s goal is to use technology to enhance the advisor-client relationship. “If you look at the healthcare industry, you’re working through doctors that service patients,” Bedi says. “If you look at other insurance companies or financial institutions, this model exists quite a bit. In many cases, having this intermediary group is equally important to the cause.”

That’s not to say that “having two customers,” as he puts it, doesn’t come without its fair share of challenges. “Sometimes there’s a tug-of-war,” Bedi admits. “But it’s our job to make sure we’re building the right approach that services everyone.”

One challenge is that the company’s 30 product teams are heads down doing research, designing, and managing feature roadmaps for the various mobile and web experiences. “They don’t have time to talk to 8,000 financial representatives and 4.5 million clients,” Bedi quips at the sheer scope of a potential effort.

“How could we find out how the advisors were using our digital products and what their struggles were day in and day out?” he asks rhetorically. “And not just that, but a lot of our advisors and clients were asking us what we were working on at any given time. The traditional channels like email newsletter weren’t working, so we needed a more sophisticated mechanism that combined the human relationship with digital.”

After talking to key stakeholders and getting management buy-in, Bedi created a new team to serve as the liaison between product teams and the network of financial advisors. They’re called the product specialists and they have been every bit the secret sauce that Bedi imagined they could be.

Aligning digital product development with an independent sales channel

Lori Makinen was tapped to be the director of the newly-formed 10-person team. She was a perfect fit given her background at Northwestern Mutual as the leader of a critical technical support team where she championed a mindset of taking ownership.

“We stressed to that team: ‘If you pick up that call, you’re the one that calls the user back to make sure the problem is resolved,’” Makinen reflects. “That ownership really led to a successful team and a great service experience.”

Now Makinen brings the same approach to her new role. “We are a team of 10 that supports the 8,000 financial representatives and their teams,” she says.

At first glance, Makinen would be sure to run into similar scalability challenges as the core product teams. But by drawing on her own experiences and studying the organization’s past strategies, she’s learned from previous missteps..

Together with Bedi, she’s developed five guiding principles for the product specialist team. At the core of each is a powerful ethos of grassroots activism.

“The product specialist team really speeds up the process of making improvements and changes to our technology platform, which benefits all advisors,” explains Steve Penn, a Wealth Management Advisor who also heads the Financial Representative Association’s technology committee.

“In order to go deeper with clients, you need more time spent face-to-face,” he says. “The technology that Northwestern Mutual is building is helping complement that because it’s reducing the amount of time we need in-person collecting information so we can instead focus on what clients want. They can conveniently give us their information beforehand through our consumer website.”

Laine Henry, a Senior Experience Designer, notes how the advisors’ input creates a flywheel effect. “Our advisors know their clients on a personal level. They feel responsible for their success,” she says. “In turn, those advisors give us feedback on the client experience, which ensures we create a product that meets their needs.”

Improved products then enable the advisors to be even more successful.

Five guiding principles for the product specialist team

“We partner with top producers – they’re financial advisors that can influence change in their region. New advisors want to model their practices after them, so if we can change the behavior of top-producing advisors, then we can also change the behaviors of others at scale,” shares Makinen.

In addition to optimizing client satisfaction, the overarching goal of the product specialist team is to drive adoption of the various technologies that Northwestern Mutual introduces to the network of financial representatives. It’s a metric that has the notion of balance built into it. Makinen’s team must optimize for better communication with the advisors while also communicating the advisors’ pain points to the digital team to ensure that they develop value-added solutions.

“Our biggest success without a doubt has been the relationships that we have been able to form with our field partners,” Makinen explains. “Out of that partnership, we’ve gotten some great feedback that we’ve shared with the product managers and changed the direction of development.”

Together with a distributed group of technology productivity consultants, Makinen’s team conducts roadshows across the various network offices, showcasing the successes of influencers and early adopters. “They’re multipurpose,” she says. “We solidify the relationship that we have with them and we share information about the progress our product teams are making. We conduct training and influence change.”

The company also formed a Digital Experience Lab, a diverse community of 2,000 financial advisors. “These folks are collaborating with the product specialist team,” says Bedi. “They’re helping advocate and evangelize. They’re getting sneak peeks of things before we launch them.”

The program is working. In less than a year, Northwestern Mutual has more than doubled the number of clients using its digital experience, from 500,000 to 1 million, while enabling 1,300 financial advisors to adopt key technologies into their practices.

The benefits of stakeholder-driven workflows

Northwestern Mutual’s product teams have a particularly unique appreciation for the financial advisors and for the input that the product specialist team provides, all of which translates into a better client experience.

“We’ve heard time and time again that people find personal finance daunting, jargon-heavy, and confusing,” says Scott Yim, a Senior Technical Product Manager. “Our team exists to create a simple, seamless, and brilliant digital experience that makes understanding finances easier and helps alleviate some of those feelings.”

Yim relies on the product specialists to surface expert-level insights from the experienced network of advisors. “We have a close relationship with the product specialist team, and we rely on them to provide real-time feedback to make sure the experiences that we’re building are on the right track,” he explains. “The field advisors are on the front lines with clients, so we often use them as a proxy for voicing the problems that clients are facing. It really does take a village to deliver and ship this technology.”

One recent example illustrates the value to the product team of the advisors’ collective wisdom.

“A recurring topic is showing our rate of return on performance for clients,” says Billy Snow, a User Experience Lead. “Not everyone in the industry is showing that number to clients because when they see a number, they want to make sure that their money is doing really well, and sometimes the number won’t be as high as they thought it would be. But in reality, for their financial plan, goals, and retirement, they’re actually on track.”


Developing relationship-centric digital products

Through the product specialist team, Snow iterated on designs based on feedback from the financial advisors. “It used to be a challenge to determine the best way to digitally storytell. The advisors explained how they educate clients on this so that we could develop the right content and elements.”

The exciting part is that the organization has already accomplished so much even though the product specialist team is still less than a year old.

“We’re really just scratching the surface in terms of our learnings with clients,” says Jennifer Lai, a Product Manager. “Before this newer digital experience, we didn’t really have any analytics to know how clients were interacting with our pages. We’re in the infancy stages, and right now we’re trying to understand how everyone is engaging with our experiences.”

Lessons for organizations built on B2B2C distribution models

For many companies, the digital age has been met with hesitancy and skepticism. Northwestern Mutual has taken a fundamentally different perspective, recognizing how the world is presenting more opportunities than challenges.

“Five years ago, the financial advisor world consisted of a lot of paper,” Makinen says. “As the whole world moved toward paperless, we wanted to get our advisory force there as well. Now when representatives meet with clients, they’re bringing an iPad or laptop, and just completing all the ‘paperwork’ online. With this experience, everything is sped up and more efficient for the advisors and the client.”


The business outcomes of stakeholder-driven innovation

Jessica Lloyd, an Associate Financial Representative based in Wisconsin, recognizes the impact that the product specialists have made.

“I think of Northwestern Mutual as the column – a fixture in this space. And it almost has a negative connotation because it’s like ‘we’re not going to change and evolve with what’s going on,’” Lloyd says. “But that couldn’t be further than the truth.”

Indeed, Northwestern Mutual offers insights for organizations that are building digital products for high-touch sales channels:

Distinguish between constants and variables

Not all sales channels are value-added in the digital age, but it’s a mistake to immediately think that technology can easily replace any human relationship. Develop empathy for end users and recognize the unique advantage that certain distribution models offer.

Facilitate communication and alignment

The product specialist team is Northwestern Mutual’s approach to aligning product teams with their independent sales channel. Whether you choose that approach or another, Bedi’s advice is straightforward: “Go grassroots. Start small. Think about how you build that relationship between product and stakeholders to serve the end user.”

Broadcast success and influence behaviors at scale

Independence enables distributors to operate freely and build meaningful relationships with end users, but it also prevents product teams from dictating terms and workflows. That means that success has to be organic and mutually beneficial. Once achieved, your organization needs a system for showcasing wins and driving behavior change.

*Not all Northwestern Mutual representatives are advisors. Only those representatives with the titles “Financial Advisor” or “Wealth Management Advisor” can provide investment advisory services as representatives of Northwestern Mutual Wealth Management Company (also an NM subsidiary).

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI and its subsidiaries.  Northwestern Mutual Wealth Management Company® (NMWMC), Milwaukee, WI, (fiduciary and fee-based financial planning services) subsidiary of NM and federal savings bank.

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