Does your sales strategy remind you of a “Hail Mary” pass? Many asset managers focus on sales only when short-term investment performance is weak and assets are stagnant or declining. Too often management believes that performance sells itself. When sales are down, the sales team is charged with quickly building a deeper sales pipeline of coveted relationships that appreciate and understand long-term performance without regard to short-term problems. They attempt to stem the tide of redemptions at the worst possible time. No easy feat.

Building a healthy sales and service pipeline is an ongoing process regardless of the investment climate or strategy performance. To be successful, asset managers need to be constantly in control of their business development effort and invest in the future of their business. Attracting new relationships is easiest during favorable up-market periods, but those relationships must be maintained and strengthened in periods of market/strategy weakness. Bolstering relationships will lengthen the asset-holding period, and profitability will be boosted faster than from the incremental revenue derived from net new assets.

Finally, acknowledge that even the most exceptional client service function can only go so far. A sales pipeline is critical to long-term success because new purchases are essential to growing the asset base. Without a coordinated sales strategy, asset deterioration will threaten to plague the firm.

If your sales pipeline is contingent upon performance as the key driver, start over. Invest as quickly as possible in a sales/client service effort and develop an asset gathering program. If you still believe that performance is the answer, remember that there are hundreds of four- and five-star rated asset managers without meaningful assets and unprofitable funds. Don’t copy their mistake. Embrace a game plan that will drive success rather than throwing a “Hail Mary” pass.

Throughout the years and across many Harborside clients, manager commentaries continue to fall a close second behind obligatory fact sheets as the most viewed fund marketing materials. The reasoning makes sense. The commentaries become tools for the advisor to help better understand various investment arenas and to communicate a manager’s overall strategic game plan.

Let commentary paint a broad picture of the macro economic backdrop and be sure to splash a few accents of interesting market insight. In our experience, tales of bottom-up stock selection stories punctuated by winning-stock success are a dime a dozen. Financial advisors tend to respond more positively to information that they can share with their clients (and chances are that hot stock pick has already hit its 52-week high). By providing interesting analysis on your market niche that helps to educate an advisor on a current market issue and potential consideration or solution, a commentary readership base will begin to grow. And so will sales.

Harborside has created hundreds of outbound investment and product messages to the intermediary audience. Not surprising, the RIA audience, in particular, seems to covet the information. Unlike their broker/dealer and IBD advisor counterparts, RIAs cannot rely upon home-office generated materials to gain in-depth market and product insight. For them, timely and relevant information holds great value. So consider in your next marketing planning session creating thoughtful, instructive commentary to get your fund company on advisors’ radar screens. It has proven to attract and retain greater assets.

It’s a simple matter of approach, discipline and quality personnel. Far too many internals in the past have had no sense of direction, no game plan or execution training – but a difficult market has helped some firms take notice. These firms no longer confuse activity with productivity, and instead help internals to better comprehend how to grow their territory.

Let’s face it: the same old, tired sales metrics do not add value. Does it really matter that 50 cold calls were made with a 10% penetration rate? Given the right tools, the quality of your sales people can largely determine sales success. Would you rather have your internals be viewed by financial advisors as sales professionals or glorified client service agents? The difference becomes apparent right after the first call.

A proactive internal sales professional can produce remarkable results at a fraction of the cost of an external. At Harborside, our proactive internal sales team in 2011 averaged over $100M in gross sales per member. These impressive numbers were achieved for emerging brand managers without the benefit of external wholesalers and across multiple territories. Sales generated by these proactive internals represented our clients’ highest margin business.

Are you getting the sales impact you desire? If the answer is no, maybe it’s time to rethink the value of the internal wholesaling function and its role within your sales organization. A fresh approach can make a big difference to your bottom line.

We have seen this performance-only mindset inhibit growth because business investment focuses on portfolio personnel at the expense of funding any asset gathering initiative. Rather than establishing a sales mechanism and marketing strategy (like the businesses they analyze), these portfolio managers tend to fall victim to supporting financially what they know best – portfolio management. This short-sided perspective becomes even more apparent if they choose to venture into the intermediary channels. In these instances, capital is often allocated to a sales and marketing effort only after assets come into the door. That means they expect assets to magically appear before committing to any funding effort.

To rationalize their capital commitment position, many managers will focus on a return on investment (ROI) metric. They look for a hard number and somehow believe that sales levels can be predicted in advance of market and product performance. Few managers ever consider the impact of brand recognition and sales development (these considerations perhaps only pertain to all other businesses). Once ROI is somehow assessed, if there isn’t any assurance that this ROI can be projected with some degree of certainty the effort doesn’t justify the capital commitment. C’mon crystal ball.

Are there are better ways to evaluate potential capital investments? Absolutely. Consider breakeven analysis on what you know (capital commitment relative to management fee). The results will offer guidance to payback periods and provide an asset gathering level to support the costs. Based upon the organization, a holding period factor and an equity value of the assets should be incorporated to more fully evaluate the sales initiative. You may find that these exercises can help squash any reluctance to commit capital and may help foster strategic growth planning that can be controlled by the firm, not happenstance.

Many investment firms overlook the fact that a proactive public relations effort can be a cost-effective way to enhance a firm’s overall visibility. Media exposure adds instant credibility to a firm’s featured professionals, an important factor when what you sell to investors is intellectual capital.

This credibility boost can help to:

• Establish your firm as an expert in your investment space,
• Earn positive news coverage for your firm, mutual fund, and investment strategy,
• Leverage third-party endorsed news coverage over and over (longer shelf-life),
• Deliver a consistent corporate message to multiple audiences, and most importantly,
• Bring in new investors, or retain existing ones, during difficult economic times.

Implementing a successful public relations program requires an understanding of the media relations process.  Often careful, deliberate messaging needs to be developed for different audiences and delivered in a clear, concise, and effective manner. Media training, for example, can help address many of these issues and prepare your professionals to manage interview demands with confidence and ease.