Disruption by Trusted Advisors⁠↗

The trusted advisor, with our permission, can simply watch and analyze the “digital exhaust” from our activities to develop deep insight into who we are and what is important to us.

I’m intrigued by the growing potential to scale a business model that’s been around for centuries, but only for the very wealthy and successful.  It’s what I call the “trusted advisor.” What’s that? It’s someone who, rather than sitting on the other side trying to push more and more products and services to me, crosses the table to sit next to me and gets to know me so well that he/she can proactively recommend things to me that I had not even asked about, but that turn out to be extremely relevant to my context, needs and aspirations.

the truth of the matter is that, even with amazing technology advances, we still only have 24 hours in the day. One of our growing needs is to increase our ROA – in this case, return on attention. If we had a trusted advisor or agent who knew us intimately and who could help us sift through all the options available to us, we’d get far more value per unit of attention than we ever could on our own.

Trust comes in part from the realization that the business knows us as an individual very broadly and deeply and is not just treating us as one more nameless consumer based on aggregated data that covers only a slice of our existence.

The real challenge is in convincing us that the business will use all of this data to serve our interests, rather than the interests of others who are trying to “target” and “own” us. For a business to do this, it must reverse the trend of current online business models that have been moving from subscription based revenue models to advertising based business models.

If I am truly going to trust my advisor or agent, I have to be willing to pay that business for its services and be confident that the business is not being paid by the product or service vendors trying to reach me.

We need to be confident that the business will not artificially constrain our choices but instead provide us with the full array of options that are available and relevant to us. This will make it very difficult for the Internet-based businesses that are diligently trying to build “walled gardens” to keep us from venturing out and exploring broader options.

The trusted advisor also doesn’t just wait for us to express an intention – it helps to shape intentions by proactively suggesting actions that we hadn’t even thought about but that turn out to be enormously valuable.

There’s a white space out there defined by untapped capabilities and unmet customer needs that existing players will find very challenging to address.

When trusted advisor businesses begin to establish themselves, they could begin to capture much of the economic value that today is held by traditional product and service businesses and retailers. These trusted advisor businesses will now have a much deeper and intimate relationship with the customer than any of these traditional companies have been able to establish and they will have a growing ability to shape customer purchasing behavior.

The rewards will be significant for companies that target and successfully occupy the trusted advisor role. The economics driving this business model have powerful economies of scale and scope. The more I know about you as an individual customer, the more helpful I can be to you in terms of recommending things that are truly relevant to you.

The more customers I serve as a trusted advisor, the more helpful I can be to each customer, since I am in a better position to look for patterns of needs and value across a larger number of more diverse customers.

In the early stages, we are likely to see trusted advisors emerge in specific domains like financial services, wellness and healthcare, home ownership and travel. Over time, though, leaders in each of these individual domains are likely to extend out into adjacent domains, until the trusted advisor is helping customers across all domains of their activity. Think about it. As an example, if I’m advising you about your financial needs and I know more about your health, wouldn’t I be more helpful to you on a variety of fronts, including issues like investment goals and insurance coverage?