Business to business clients, across industries, are changing the way they buy – it’s a fact. But, in the asset management industry, are we doing enough to grasp this simple reality and to take the necessary measures to adapt?

I believe that, for those that do adapt, this can be a potential source of structural competitive advantage and the good news is that only a small number of asset management firms are successfully responding so far. There’s a lot of potential upside for firms that take material measures to change how, when and where they engage with their clients.

The answer is not a simple one though; it’s about changing behaviors within the firm. It’s about how firms do things, not what they do, it’s about building real collaboration and breaking down the silos. What silos I hear you ask? The big structural ones, the ones limiting collaboration between sales, marketing, client servicing, investments and technology, I reply. Oh, we’ve already done that you say… Read on.

So, what’s happening?

Let me be clear from the start, this is all about the how, not the what. The reason I say this is that most senior sales, marketing and investment people spend a majority of their time talking about the what – and I strongly believe that because clients are changing, now is the time to look at how teams are collaborating around those changing behaviors. If you don’t, I would argue that you run a very real risk of being excluded from the digital conversation that is going on while your sales people are not in front of their clients!

The fact that B2B clients are generally changing the way they take buying decisions is of course not new. A raft of surveys by respected organizations have highlighted this fact since as early as 2012:

From personal experience, I would argue we are seeing this client withdrawal within the asset management industry too, and it’s happening for a variety of reasons:

  • Fund selectors imposing strict terms of engagement, materially impacting firms’ ability to connect with the RM teams of large distribution groups.
  • Institutional clients developing web-based sales meeting booking tools as a form of firewall to limit the burden of sales meetings.
  • Government institutions resorting to database driven searches in an effort to combat corruption.
  • Weakening event attendance, the rise of popularity of the multi-manager event platform.

All are symptoms of clients insisting on imposing (and being technologically enabled to do so) their preferred engagement approach on the armies of sales people that besiege them daily. Clients can inform and educate themselves, track market trends, assess product options, short-list strategies and suppliers and all this, before sitting down with a single sales person.

Clearly, the increased availability of data and information sources as well as the pressures for unbiased, fact-based decision taking is driving a change in the balance of power between the buyer and the seller. Equally clearly, distribution functions need to change how they engage with their clients.

The funny thing is this: you would think that with these trends readily apparent, distribution teams across the industry would be rushing to adjust. The question is: are they?

Sales has changed

10 years ago, the best sales people were those who were able to influence client buying criteria to such an extent that the criteria simply reflected their own firm’s product strengths. Today, the rise of the fund selector, the establishment of strict procedures and governance bodies, the aversion to scandals such as Madoff, have all but driven such practices from the industry.

If more than 50% of the buying decision is completed before the sales person is contacted by the client, how do you influence the client in the early stages of their buying process? How do you make sure that your product is on their long list? How do you explain that the peer group for your product should not be the one indicated by Morningstar because the benchmark is different? How do you ensure that your newly launched product is considered despite its short track record? How do you speak to investment committee members not willing to meet with you? How do you engage with influencers within the client firm who would like to see your competitor strategy selected even if you don’t know who they are!?

Digital is dramatically changing the role of sales. The thing I find fascinating is this: a bit like a frog in slowly boiling water – is sales aware that the client has turned up the heat, and that their job has forever changed? Because, it has.

If you’re not there, you’re not in the conversation!

And the simple truth is this: if you, as a sales or marketing leader, are not collaborating intensively with your opposite numbers in sales or marketing to develop new and relevant ways to be present and engage interested buyers across the digital communications platforms they are visiting, your firm is effectively no longer part of the conversation.

Breaking down the silos

The answer sounds easy but challenges the status quo that I have observed in many, many financial services firms over the last 20 years: deconstructing the silos between sales, marketing, investments and technology. For the purpose of this article, I’m going to focus on the areas that typically form the distribution function.

I agree, it doesn’t sound impressive and that’s just the problem. But, if it is so easy, ask yourself this: why are so many sales, marketing and client servicing teams still not able to collaborate effectively? Why are so many sales people critical of their marketing team’s campaigns (“no use to me”, “not relevant to my clients”… I could go on all day)? Why are so many marketing people fearful of collaborating with their sales colleagues (“they just say ‘we know the client, so this is how it needs to be”)? And why, when I attended a sales strategy program at Kellogg Graduate School of Management recently, was I the only pure-play marketing person present?

Given how are clients are changing, I would argue that this simply can’t continue.

Focus on the how not the what!

I would argue that in the new paradigm, every sales person should be working hard to make marketing their best friend, to access their skills in dialogue marketing to make sure that the firm is part of the conversation even if they aren’t sitting in front of their client.

Marketing should be working just as hard to collaborate with, and understand the issues their sales colleagues are facing, and to engage clients and prospects in ways which will contribute positively to progress along the sales funnel: demand generation, leads nurturing and qualification, account-based approaches, the list goes on.

Client servicing should be working hard with technology as well as marketing to explore and co-create solutions that will enrich the experience of the client while enabling the capture of data that will further the development of the client relationship to the benefit of sales.

Collaboration is a win-win

The key here is the enormous upside potential for successful collaboration between sales, marketing, client servicing and technology – all can succeed individually, but the upside potential for seamless collaboration outstrips what they can achieve alone. The opportunity is simply lying on the table.

I guess the real issue in the end is leadership. As I’ve already said, it’s about the how not the what. Distribution is composed of multiple functions each with their own focus, jargon and career paths. The onus is on leadership to create a meaningful and ambitious vision and roadmap for future success. This should include the vision for what the firm should represent to the clients, the positioning, the relevance of the firm’s DNA. It should also include a call to arms for collaboration (including with the investment side of the business) and the need to change how distribution teams function to engage clients for success. Even better if it is hard coded into performance objectives and all sides!

The best is still to come

I know many will respond that this is already happening. My answer is that I’m really not seeing it. At best, most visions are a half-baked re-work of the same old language that you see in the ‘About Us’ section of fund managers web-sites across the industry. At worst it’s a set of sales targets with no mention of clients, focus, positioning or value creation. The real work is still to be done.

And the race is on…

Patrick Ide

Internationalist. Strategic Marketer. Communicator. Leader. Connect with Patrick on LinkedIn.

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