Building on Your "Sole Source" Characteristics

Dana Dakin: Speech to the Institutional Investor Marketing Roundtable

Performance goes up and down. Market environments change. Investment styles go in and out of favor. Competition grows. All of these things are beyond your control. Effective marketing is not.

What is effective marketing? In my view, it is providing the buyer with clear and compelling insight on your investment approach:

  • relative to your history
  • relative to the tenor of the market
  • relative to your competition

Where specifically does your performance come from? Buyers want to know the orgins of your sustainable performance advantage, which is always connected to the characteristics of your organization. What is it you offer that no one else does? What makes you stand out? Why should the buyer give you special attention? Answering these questions squarely and convincingly inspires a level of buyer comfort that translates into long-term commitment. However, winning this kind of commitment has never been a greater challenge.

Two powerful forces are at work in today's institutional environment that can no longer be ignored when shaping a marketing effort. The first is the accelerating rate of change. At a speed that would have been unheard of just a few years ago, new companies emerge as overnight sensations; new distribution channels make major inroads into new markets; and new products capture the imagination of new buyers. As a result of this dynamism, buyers are constantly reevaluating all contenders, even the mainstay firms.

The second major influence is the increasing sophistication of the institutional investor. As buyers continue to make significant gains on the learning curve, they are driving a higher overall standard for investment communications.

Buyers are making early, quick judgments about the value of information they receive, whether through sales calls, print materials, industry publications or advertising, and they are becoming more discriminating in where they focus their energy to become more educated. Old news and tired boilerplate have never been more dangerous. Not only are they ignored, they seriously weaken credibility.

It could be argued that as a result of these forces - escalating change and the investor's growing appetite for genuine insight on why products are good and how they are different - marketing in the classic sense is only now becoming a necessity for the investment management industry.

Until the last few years good performance and a fairly religious sales effort, either direct or through outside distribution channels, could sustain a business development effort. Those times are behind us. It is no longer just a numbers game. The number of prospects called on bears less and less relation to the number of accounts won, and performance is no longer a meaningful differentiator.

What follows are four major milestones in shaping an information-driven marketing effort:

Identify Your Firm's 'Sole Source' Characteristics

No two products in this business are exactly alike. Nor do any two investment organizations have personalities that could be called even remotely similar.

Isolating your sole source characteristics requires a two-pronged research effort, one internal and the other external. The objective of the internal investigation is to tap the thinking of your key people on what they believe are the firm's special strengths. Externally, interviews can be conducted with a sampling of consultants, clients and prospects to determine what they perceive are the special benefits you provide and which of these most clearly differentiate your capabilities.

This internal and external research, which also garners invaluable input on what are perceived as an organization's weaknesses, provides an absolute wealth of information that can be obtained in no other way.

Create a Strong Market Positioning for Your Strengths

With your sole source characteristics identified, you can then begin to create an effective positioning platform. This platform will be the keystone of your competitive strategy, a summary of the most authentic - and therefore the most powerful - selling messages that can be communicated about your capabilities in terms of your target markets and competitive environment. It is the foundation upon which all your marketing efforts will be built and provides a strong, clearly defined information core that can be readily adapted to a variety of investor audiences.

Use the Positioning Process to Achieve Internal Consensus and Build Momentum

Distilling your key marketing messages is, however, only half the job in creating an effective positioning platform. The other half, equally critical, is ensuring you have achieved consensus among your key people on the platform's content. Their "buy-in" is essential as you move forward.

By identifying the "common threads" of your story during the internal research phase, confirming them in the marketplace, and translating them into sole source attributes every key contributor can rally around, you minimize dissention and sharpen the focus of your organization. You also clarify the message sent to the marketplace, communicating the sense of discipline and continuity that builds credibility and accelerates momentum.

Build Compelling Communications that Genuinely Influence the Buyer

With internal consensus achieved, the next challenge you must confront is the necessity to create marketing materials that showcase your positioning strengths in a compelling way. Advertising genius David Ogilvy once noted, "There are very few things that do not benefit from being given a first-class ticket through life." That includes the promotion of investment capabilities.

In the past, maintaining a low profile provided a safe harbor in the institutional investment business. A low profile was perceived as the ultimate signal of success, proof you were so good you did not need to draw attention to your capabilities in order to attract business. Beyond perfunctory quarterly letters, marketing information was anathema.

Today, despite a very different competitive environment, too many good firms are still unable to break free from yesterday's conventions to present their capabilities in genuinely persuasive visual and written communications.

First, to stand out clearly in an overcrowded marketplace, your corporate identity must be graphically memorable. It must accurately reflect who you are as a firm and it must be applied across all communications. When these objectives are met, a strong symbol or logotype can play a crucial role in supporting the differentiation of a firm's capabilities.

Second, your advertising must now move decisively beyond the severely prescribed limits of yesterday's "tombstone" tradition to attract attention, hold interest and make an impression. It must work actively to change perceptions in order to lay the groundwork for more effective sales calls.

Next, your sales support materials must provide clear and complete information on your investment philosophy and process. Today's buyers want to know exactly how performance was achieved and how it will be maintained going forward. They will not hire you until they see how the investment process can be directly connected to the people who created it and how that capability is, in turn, linked to your overall investment philosophy. If this interrelationship is not demonstrated, you will not be considered a serious contender.

And, finally, to create lasting credibility, your public relations efforts must rest on the provision of superior information. Done well, with integrity and a sophisticated understanding of the needs and interest of the knowledgeable investor, quality articles and speeches and publications can help ensure name recognition and staying power in our industry's extraordinarily dynamic environment.

Distinctive information-driven marketing, by definition, avoids the slickness and superficiality from which this industry has traditionally, and rightfully, recoiled. Instead, it strongly reflects a firm's mission in the marketplace and influences the prospect through its integrity and credibility.

Marketing is, for the first time in the history of our industry, playing a decisive role. The managers who are succeeding are those who are moving beyond a selling focus to a new marketing sophistication that permits them to speak clearly and convincingly - and be heard.

As diverse as their investment approaches may be, today's successful managers share one pivotal competency new to our business: They are communicators - and the power of their messages lies in the quality of the information they are providing.

Back to Top

© 2008 Dana Dakin, All Rights Reserved