This is a common story in fund management today – a crowded market place is hard to break into unless your marketing is not only sound and well-planned, but targeted to your chosen investor audience. Many firms take a top-down rather than a more preferable, bottom-up approach. This means they have the product packaged and ready-to-go without any significant investor research or structured assessment of market demand. They almost say: “We’ll build our funds and investors will come.” Sadly, even though in many other fields the premise of “Build it and they will come” can work, it rarely works in the investment business.
Before you can market your product, you need to establish your own goals and objectives, evaluate your core values as a fund manager and fully understand your own business and why you do, what you do. What motivates you, what are your relevant interests? Are you passionate about the asset class or the principles behind it? (Responsible investing is one example). If you don’t know these things and don’t “feel” what your business stands for, how will your investors know and share those feelings enough to trust their money with you?
Using differentiation to build trust and engagement
Just having a good investment strategy isn’t enough. You may know what you do and how to do it well, but do you know what makes you and your company tick? What makes you and your colleagues stand out amongst dozens of other managers who are offering the same promises? The key word here is “differentiation” – offering something that sets you apart from the rest.
Too many businesses, in all industries, suffer from a distinct lack of forethought in establishing what makes them worthy of customers’ attention and eventually earning the most crucial element in any relationship, namely, trust. Trust leads to them spending their money in a store or restaurant or investing money in your fund ideas. Remember, people invest emotionally as well as rationally – behavioural finance theories tell us that.
A simple Results Cycle – each element is mission-critical for a good marketing outcome
Taking time to align your clients’ needs and perceptions of themselves, with your proposition and your perceptions of yourselves, is a critical stage in the marketing process and should begin way before you open your doors to accept investor money. This is differentiation. Many managers do not take these vital planning steps – if you do, you are showing your customers you care enough to explore these vital elements of your own proposition and are laying the foundations of a good future relationship.
At the planning stage, it is important to go back to basics. Do you enjoy what you do? How can you align your proposition with your customers’ needs, desires and, critically, their aspirations? You can’t always align your customer’s needs to your product – that’s likely the wrong way around. For example, an income investor needs just that – income. Great medium to long term capital growth may just not be what they need.
What lead can you take from success stories elsewhere in the investment industry or even from businesses in other industries that have clearly defined and achievable marketing goals? Who do you admire and why?
Then, think deeply about the fund vehicle you are proposing and if/how it needs to be shaped to match your target market. Is its regulatory status in-tune with the investor protection criteria necessary to create the right environment? There is such a thing as over-regulation – would your new customers feel restricted by an over-robust and unnecessary supervisory regime? Conversely, would such regulatory oversight be comforting, boosting trust and engagement?
Creating a marketing plan with achievable objectives
Finally, create a practical marketing plan that starts at the heart of the proposition you offer, takes full account of the resources you have available and what truly achievable goals and objectives you see in the near, mid and far time horizons.
Evaluate and project the fund’s personality and other abstract “soft attributes” into your proposition alongside the more tangible “hard attributes”. Soft could be the ability to communicate your feelings about investment markets (always a very personal thing), hard attributes could be proven skills and track record in your chosen investment markets and asset classes.
People invest with people. People invest more with people they trust. Trust is built upon engagement and confidence-building. These are critical steps to building any investment business and creating the right environment for investors to feel right about investing with you. There are no short cuts. Asset classes and investment strategies can come in and go out of favour, but a trusted and admired investment brand must be built on more than a passing fad or bandwagon.
Understanding why you do what you do and how that matches and enhances investor expectations and satisfaction, is a crucial step in fund design and hence, fund marketing, and ultimately fund success.
Author: Mr. Tony Trescothick, Business Development Director, Mellstock Limited
Tony has a background in the investment management industry that started in the early 1980s in the UK. His practical experience in both management and marketing provides a unique insight where both elements combine to create unique and attractive investment propositions. He holds both industry and management qualifications from leading bodies such as the Chartered Insurance Institute, the Chartered Management Institute and the European Institute of Management and Finance. Mellstock is based in Limassol and provides specialist marketing services to the fund management industry with clients in London, Dubai and Cyprus.
