Want to Market Your Portfolio? Then Market Your Data
Data has become the underappreciated catalyst for the investment management sales & marketing process.
Investment management data marketing is defined by the strategic use of your firm's data to add clients and grow AUM.
In days past, relationships between manager and investor drove the investor to look at the data.
The job of today's consultant is dominated by the search process and the assessment of data. So, it is not a stretch to say it is the data that drives the marketing and sales process, not the professional relationship.
Investment managers need to actively market their investment management data. This is a 5-step process that helps managers to tell their story; one that effectively conveys their practical, real-world value to clients and prospects.
Before we begin, understand that investment management firms produce exactly one thing, and one thing only:
The data your firm generates is the meaningful evidence of who you are, what you do, and how effective you are as a portfolio manager.
Data can answer many of the important questions investment managers have about their business, competitive position, and marketing strategy.
Answering these kinds of questions requires a strategy for managing data in a way that enables a tactical approach to investment management marketing:
Where should we be distributing our data?
Does product AUM substantiate our firm’s AUM?
How do we compare to our benchmarks and peer group?
Which of our products are growing by new sales and by client retention?
Which data points should we be emphasizing based on our narrative?
How should we display and promote our data with compliance in mind?
Are databases the only place where our data can work for us?
When we underperform, does data help or hurt our marketing efforts?
Firms who can answer these questions know themselves well, and are thus prepared for data marketing success.
Investment management data marketing entails five essential components which enable your firm to employ data to its best effect:
Investment managers should have a reliable, repeatable process for generating and organizing quantitative and qualitative data sets.
The important data sets include:
Performance track record
Portfolio holdings & characteristics
Business profiles to show that you’re qualified, accredited, & solvent
Narratives for both your firm and its products & vehicles
For most firms, raw data is transmitted by their custodian directly to the investment managers' servers. But upon delivery, there is often a great deal of inconsistency in the ways in which data is then handled.
What’s important to understand is that in the assembly phase, investment managers must have easy access to each and every one of these data sets if they hope to position themselves for sales & marketing success.
Data acquisition must be thorough and follow a consistent procedure.
Data should be formattted for distribution immediately. Don't let it sit.
Firms should have set procedures in place which ensure that the portfolio data is compiled and stored on a regular monthly & quarterly basis.
A typical procedure looks like this:
Data is obtained from the custodian.
Data is exportable from a web-based system into individual Excel spreadsheets.
These spreadsheets are then stored on a firm's common drive.
Qualitative data (firm and product/vehicle narratives, for example) is nothing more than a collection of Word documents saved in a separate folder.
In essence, the data warehousing system for most investment managers are file folders with a collection of documents that have to be opened separately and viewed individually.
Under such a system, many managers find it difficult to immediately understand exactly where the firm stands, and whether or not the narratives actually reflect the firm’s current strategy and/or process.
Managers could invest in a costly SQL database to house their data, but many instead choose to simply upload their data to one of the public industry databases and use that as their default data warehouse.
But in the long run, warehousing data on a public database is a terrible practice that does serious damage to your top-line marketing effort because:
Storing private, proprietary, confidential data on a publicly-available database compromises your competitiveness against your peers.
Databases are not connected to each other. Siloing your data in one database severely curtails access to your data by prospective investors.
If you (rightfully) want to upload your data to other databases, it requires a data download, insertion into new templates, and re-uploading to the other databases; a process fraught with opportunity for error.
Automation and a streamlined process from custodian to warehouse is highly recommended.
Centralize your portfolio data in-house or with a trusted partner who can link your data to industry databases.
Responsibility for managing data should be shared within the firm, and not tasked to one data liaison.
Data warehousing and reconciliation go hand-in-hand.
After all, most managers can relate to the frustration of trying to reconcile:
30 data points
Across 9 open spreadsheets
For the 3 individual months in a quarter
Across multiple quarters
So unless the data is stored in a way that's orderly, logical and facilitates reconciliation, managers can easily find themselves with a data set that's incorrect and thus unrepresentative of the firm's positions.
For even the smallest investment management firm, the job of reconciling a portfolio or two can be extremely intimidating.
But not doing so isn’t an option. Data must be reconciled.
For larger firms, with the custodian delivering raw data sets for multiple portfolios across several time periods, the complexity and the opportunity for error grows exponentially.
Because of the complexity and detail involved in a professional data reconciliation system, it is helpful for smaller firms (and vital for larger ones) to ensure the data is well-organized and easily managed.
Create a manual detailing how raw data is to be handled upon receipt.
Where human interaction is unavoidable (i.e., no automation), ensure data is reviewed by multiple team members. Fresh eyes are essential.
Data marketing is the most cost-effective and efficient marketing channel available to investment managers.
Your data has been received, warehoused, and reconciled. You now need timely distribution to the relevant investment databases.
For the vast majority of managers who choose to handle data distribution internally, the reconciled data for each product or vehicle has to be hand-entered into each individual field or input into each database’s individual template.
So if a firm has:
50 vehicles, in 5 industry databases, each with (minimum) 2,000 fields:
It requires at least 1.5 million individual mouse clicks to maintain a complete set of database profiles every quarter.
Once the data is uploaded, it has to be reconciled again, across each profile, to ensure the data transfer occurred without incident. If your data is not consistent across every database profile you have, consultants will notice during their due diligence review.
If the quality of your data is questionable, consultants are reluctant to work with you. Period.
There are also qualitative data sets that industry databases request.
Because product and firm narratives tend to be bland and largely evergreen, they are often uploaded then forgotten. Understand that qualitative data is not optional. The fields need to be fully completed and reviewed no less frequently than annually.
Know where your ideal clients are conducting manager searches.
Ensure profiles can be found easily.
Automate. More human interaction = more errors.
Complete qualitative fields and review annually.
Marketing collateral is not just a tool; it is THE tool you use to sell your firm. Ensure all your collateral has been updated with the most recent data.
Data-driven marketing collateral is what enables the transition from marketing to sales. It’s all about positioning.
Sales meetings are what data marketing is designed to produce: success in the digital realm creating opportunity in the real world.
In marketing, investment managers can only maintain credibility when the data they distribute substantiates their narratives.
For this reason, data consistency and reliability is an important credibility issue for investment management firms. You must ensure all data, qualitative and quantitative, is consistent across every platform in which your firm is represented.
Data is the key component of manger selection. Why?
The broad availability of quantitative data, coupled with rigid investment policy statements, have displaced traditional relationship-based marketing.
Relationships used to drive the marketing and sales process; now its the data that does so.
The sales cycle has lengthened considerably (now encompassing 6-10 meetings over a 12-18 month period) as consultants, institutional investors, and professional investors of all stripes now devote the bulk of their time assessing investment data.
This new sales cycle means that managers can no longer use the same pitch book or fact sheet for a year and a half and expect a consultant to engage with renewed interest every meeting. You need a diverse library of marketing collateral to keep each encounter fresh and interesting.
Immediately update and send collateral to existing clients & prospects.
Post collateral on the website and update immediately.
Position data to highlight favorable areas of comparision.
Ensure collateral design puts your firm in the best possible light.
Ready to learn more about how APX Stream can help market your data and grow AUM?