We are a large U.S. multiproduct, multiasset-class investment management firm and we have a sizable sales staff of approximately nine individuals divided into teams focused on institutional investors. So, we have a team for public funds, corporate defined benefit plans, endowments and foundations. My question or observation is that the head of sales doesn't really have a sales plan or strategy to findwell-qualified prospects for our products. It appears that the strategy is to call and try to meet with as many institutional investors as possible. I am curious as to what we can do to be more targeted and thus more effective in our sales effort. There seems to be a lot of wasted time calling on potential investors who will never really be good prospects.
How can we reach institutional investors better?
First of all, the “spray and pray” approach to prospecting for institutional clients has never been and never will be an effective and efficient sales strategy. Second, the investment management industry has never really understood what classic marketing is really all about. We have always called sales “marketing,” and these two disciplines, while complementary and interdependent, are not synonymous.
There are great salespeople; great client service people and outstanding professionals creating impactful “marketing communications” materials, but very few investment management firms have dedicated professionals who can effectively prequalify attractive opportunity sets, target markets or real leads by conducting forensic research.
Investment management firms could streamline the entire asset-gathering process by researching what type of institutions might be interested in your products, by determining which institutional investors currently have an allocation to the products you offer, by ascertaining when the investment firms were hired and the size of the average allocations and by discovering what their current allocation is compared to their long-term strategy. Some information can be found in online databases and some has to be gathered by merely asking the question of the fund's staff and/or consultant. If those who perform this marketing function can effectively turn a “suspect” into a “legitimate prospect,” then the entire asset-gathering cycle can be truncated.
Moreover, a true marketer will research the competition in each product offering and be able to determine the strengths and the relative weaknesses of your product and firm vs. other providers. This will help determine the effective positioning of your product by accentuating your differences and how these differences accrue to the benefit of the asset owners.
As they say, none of this is rocket science. It is just focused due diligence leading to creating a prospect list that is already prequalified and using your competitive market analysis to fashion a positioning statement that will set your product apart and above your obvious competitors.