By Glenn B. Davis, Partner
|
Abstract Based on 30+ years of close observation, there is as much or more opportunity for investment managers to achieve competitive advantage by exploiting marketing and sales inefficiencies as investment inefficiencies.Investment firms should expand the way they think of inefficiency from an investment-centric concept with alpha as the metric for success to a business-wide concept with competitive advantage as the metric for success. Senior Management should factor the opportunity to achieve competitive advantage into budgeting and resource allocation decisions. Those who follow this approach will invest properly in marketing and sales projects and be well-positioned to exploit those who do not. |
Exploiting inefficiency is the Holy Grail of investment management. Most people automatically associate inefficiency with the investment side of the business. But, if the investment markets were as inefficient as the marketing and sales side of the business, your portfolio managers would be jumping for joy - happily capturing alpha all day long!
When we meet with investment firms, people from many different functions are often around the table...Consultant Relations, Sales, Marketing, Client Portfolio Management, Product Management, Portfolio Management. What unites all these different people is the quest for competitive advantage. And in our experience, there is as much or more opportunity for investment managers to achieve competitive advantage by exploiting marketing and sales inefficiencies as investment inefficiencies.
The point is that your firm has significant opportunity for competitive advantage by out-marketing, out-positioning and out-training your competitors. This is truly where the low-hanging fruit is in our industry.
Against this backdrop, following are two key areas where Eager, Davis & Holmes (EDH) helps investment managers exploit inefficiencies to gain competitive advantage.
1. Improve Your Product Positioning and Presentation Content
Three Big Inefficiencies You Can Exploit
| Inefficiency | Exploiting It |
| Most investment managers fail to differentiate themselves. What they say is unique usually isn't. Asset owners and consultants lack compelling reasons to consider them. | Work hard to differentiate your firm, strategies and staff. Get outside perspective from a firm like EDH. |
|
Philosophy and process descriptions are often ineffective:
Philosophy: Too complex. Root phenomena behind ability to systematically generate excess returns aren't clear.
Process: Long, dry, unclear explanations. |
Simplify your message. Make sure the people you present to are able to explain it to others. |
| Investment managers frequently inundate audiences with irrelevant organizational background. | Know what's relevant. Ruthlessly edit your story to focus only on what's relevant. |
Are your presentations and presenters succinctly conveying your edge? Are you differentiating your firm and strategies? Are you getting people to emphatically say "that's the way we want our money managed"?
Via EDH's exhaustive, proprietary approach, your product messaging and presentations will be as convincing and differentiated as possible. Millions of potential revenue dollars depend on the effectiveness of your product positioning and presentation content...warranting nothing less than the intensive, bottom-up effort EDH brings to the table.
2. Improve the Skills of Your Front-Line Staff
Three Big Inefficiencies You Can Exploit
| Inefficiency | Exploiting It |
| Dry Portfolio Managers who lack good presentation skills, overwhelm audiences with technical detail, and/or drone-on in Q&A. | Equip your PMs with the skills needed to be top-quartile presenters. |
| Client Relationship Managers who aren't routinely doing the right things - week in and week out - to build sticky client relationships. | Train key client-facing staff on best practices for retaining and expanding client relationships. |
| "Product pusher" Sales Professionals who sell without first listening and qualifying. | Make sure your salespeople excel at personalized, solutions-based selling. |
Front-line staff inefficiencies like these are as prevalent today as they were 30 years ago when we entered the institutional investment business. They are difficult to "arb away" because they are based on deeply-ingrained behavioral tendencies - the same force behind many sustainable inefficiencies on the investment side of the business! If inefficiencies like these are present in your front-line staff, your competitors are probably exploiting your firm.
EDH's professional development programs will greatly improve the effectiveness of your prospect and client-facing staff.
Presentation Training Program
This program is based on decades of observing what sets top presenters apart. EDH shares surefire techniques for improving presentation skills. We lead intensive videotaping, critiquing and playback sessions with your Portfolio Managers, Sales People and other staff members whose presentation effectiveness is critical to your firm’s new business success.
Client Relationship Management Training Program
Few investment managers formally train their Client Relationship Managers on practices that position them as trusted advisors and lead to sticky client relationships and cross-sales. This program does this in an efficient, on-location format.
RFP Team Training Program
Because so many managers produce lackluster RFPs, there is real opportunity to stand-out in this important area. In this program, EDH leads exercises that strengthen both your RFP team's skills and a product-specific RFP you select to be the focus of the training effort.
By Glenn B. Davis, Partner
|
Abstract Based on 30+ years of close observation, there is as much or more opportunity for investment managers to achieve competitive advantage by exploiting marketing and sales inefficiencies as investment inefficiencies.Investment firms should expand the way they think of inefficiency from an investment-centric concept with alpha as the metric for success to a business-wide concept with competitive advantage as the metric for success. Senior Management should factor the opportunity to achieve competitive advantage into budgeting and resource allocation decisions. Those who follow this approach will invest properly in marketing and sales projects and be well-positioned to exploit those who do not. |
Exploiting inefficiency is the Holy Grail of investment management. Most people automatically associate inefficiency with the investment side of the business. But, if the investment markets were as inefficient as the marketing and sales side of the business, your portfolio managers would be jumping for joy - happily capturing alpha all day long!
When we meet with investment firms, people from many different functions are often around the table...Consultant Relations, Sales, Marketing, Client Portfolio Management, Product Management, Portfolio Management. What unites all these different people is the quest for competitive advantage. And in our experience, there is as much or more opportunity for investment managers to achieve competitive advantage by exploiting marketing and sales inefficiencies as investment inefficiencies.
The point is that your firm has significant opportunity for competitive advantage by out-marketing, out-positioning and out-training your competitors. This is truly where the low-hanging fruit is in our industry.
Against this backdrop, following are two key areas where Eager, Davis & Holmes (EDH) helps investment managers exploit inefficiencies to gain competitive advantage.
1. Improve Your Product Positioning and Presentation Content
Three Big Inefficiencies You Can Exploit
| Inefficiency | Exploiting It |
| Most investment managers fail to differentiate themselves. What they say is unique usually isn't. Asset owners and consultants lack compelling reasons to consider them. | Work hard to differentiate your firm, strategies and staff. Get outside perspective from a firm like EDH. |
|
Philosophy and process descriptions are often ineffective:
Philosophy: Too complex. Root phenomena behind ability to systematically generate excess returns aren't clear.
Process: Long, dry, unclear explanations. |
Simplify your message. Make sure the people you present to are able to explain it to others. |
| Investment managers frequently inundate audiences with irrelevant organizational background. | Know what's relevant. Ruthlessly edit your story to focus only on what's relevant. |
Are your presentations and presenters succinctly conveying your edge? Are you differentiating your firm and strategies? Are you getting people to emphatically say "that's the way we want our money managed"?
Via EDH's exhaustive, proprietary approach, your product messaging and presentations will be as convincing and differentiated as possible. Millions of potential revenue dollars depend on the effectiveness of your product positioning and presentation content...warranting nothing less than the intensive, bottom-up effort EDH brings to the table.
2. Improve the Skills of Your Front-Line Staff
Three Big Inefficiencies You Can Exploit
| Inefficiency | Exploiting It |
| Dry Portfolio Managers who lack good presentation skills, overwhelm audiences with technical detail, and/or drone-on in Q&A. | Equip your PMs with the skills needed to be top-quartile presenters. |
| Client Relationship Managers who aren't routinely doing the right things - week in and week out - to build sticky client relationships. | Train key client-facing staff on best practices for retaining and expanding client relationships. |
| "Product pusher" Sales Professionals who sell without first listening and qualifying. | Make sure your salespeople excel at personalized, solutions-based selling. |
Front-line staff inefficiencies like these are as prevalent today as they were 30 years ago when we entered the institutional investment business. They are difficult to "arb away" because they are based on deeply-ingrained behavioral tendencies - the same force behind many sustainable inefficiencies on the investment side of the business! If inefficiencies like these are present in your front-line staff, your competitors are probably exploiting your firm.
EDH's professional development programs will greatly improve the effectiveness of your prospect and client-facing staff.
Presentation Training Program
This program is based on decades of observing what sets top presenters apart. EDH shares surefire techniques for improving presentation skills. We lead intensive videotaping, critiquing and playback sessions with your Portfolio Managers, Sales People and other staff members whose presentation effectiveness is critical to your firm’s new business success.
Client Relationship Management Training Program
Few investment managers formally train their Client Relationship Managers on practices that position them as trusted advisors and lead to sticky client relationships and cross-sales. This program does this in an efficient, on-location format.
RFP Team Training Program
Because so many managers produce lackluster RFPs, there is real opportunity to stand-out in this important area. In this program, EDH leads exercises that strengthen both your RFP team's skills and a product-specific RFP you select to be the focus of the training effort.