Steven Rubenstein is a Principal & Founder of Arrow Partners, a 3rd Party Marketing firm and founding member of the 3rd Party Marketers Association. The 3PM Annual Conference was held earlier this week in Boston, and I spoke on a panel about websites and social media. At the end of my session, Steve and I sat down to chat about how managers can stay relevant during lulls in the sales process.
DQCOMM: The 3PM Conference this week covered a number of interesting topics, on investment management marketing best practices, but I think an important question that went unaddressed was: how do managers stay on consultants’ radar when search activity comes to a standstill?
Steve Rubenstein: Dealing with lulls in the sales process is one of our industry’s most frustrating challenges.
At Arrow, we work primarily with long-only equity managers, selling their services to the consultant market. When consultants are between placements or the product or strategy we are repping is out of favor, we’ve learned that it is still really, really important to stay active in the marketplace.
DQCOMM: What are some of the strategies Arrow puts to use in the service of “staying active?”
SR: First, those of us in institutional sales and consultant relations need to be patient, yet persistent, which is easier said than done. We’ve erred on both sides over the course of our careers, though now I feel like we’ve figured out how to strike the right balance.
In the past, when we’ve been too passive, our emails and voice mail messages ended up getting lost in the inbox of a busy consultant. On the other hand, when we’ve been too aggressive it's come across as either desperate or pushy, which cost us some credibility, as well as the benefit of the doubt.
Either outcome is a relationship killer.
DQCOMM: When business is slow, how do you counsel your manager clients to handle rejection? What are the investment management marketing best practices here?
SR: Time is money and vice-versa, so we counsel our partners to avoid wasting both once we get bad news from a consultant. Obviously, we and our manager clients would always rather hear “yes” instead of “no.” But when we are rejected outright, it has the virtue of narrowing our playing field and helping us to make better resource allocation decisions.
In our experience, the outright “no” is a relatively rare occurrence. What we get most often is either silence or a tepid “maybe” from a consultant or their gatekeepers. When we get those, we have to keep plugging away.
DQCOMM: And what does “plugging away” entail?
SR: Just remaining diligent and professional, but ready to sever contact if the consultant is unresponsive or noncommittal over an extended time. The last thing anybody wants is to have their message become spammy to the consultant class.
The decision to cut bait isn’t an easy one to make, but we’ve been doing this for more than 20 years, so we’ve learned that listening to what our gut tells us about the direction in which the relationship seems to be heading.
DQCOMM: All lulls aren’t created equal though, I’d imagine.
SR: No, they really aren’t. As I mentioned earlier, one of the typical causes of a sales lull is a product or strategy falling out of favor. When that happens, it’s easy for managers to hunker down and try to ride out the storm.
Our advice is: Don’t wait for the market. It is impossible for managers to affect the timing and frequency of new search activity or asset allocation decisions by consultants or plan sponsors. Managers are guaranteed to miss great opportunities if they wait until their asset class or style is back in favor. As noted earlier, the objective is to be in place and ready to go when the next cycle starts.
DQCOMM: So it’s like the old cliché, “Luck is when preparation meets opportunity.”
DQCOMM: So what's one way managers can stay ahead of the curve when their approach is not in demand?
SR: Get pre-approved. We believe a manager’s main objective should be to ensure his or her product is short-listed and/ or pre-approved with consultants and gatekeepers.
If managers successfully navigate the due diligence process, complete RFPs and schedule productive site visits when things are slow, then they can move quickly when opportunities finally do arise. During lulls in asset growth, these efforts represent actual, measurable sales and marketing activities that lead to future asset growth, enhancing value to clients.
DQCOMM: OK -so let’s say a manager is pre-approved. Do you still try to keep in touch? If so, what are some of the strategies Arrow uses?
SR: Absolutely, keeping in touch is essential.
At Arrow, we use the Skype video conferencing service. These calls are time saving, cost-efficient methods to stay in touch with consultants during slow times. It’s efficient, yet personal, and it enables us to keep the consultant in the loop with regard to our clients’ activities. In our experience, the benefits of regular video-conferencing have been significant.
However, it is important to be respectful of the individual preferences of each consultant. For example, there are certain consultants with whom we have a relationship who genuinely seem to enjoy a quick 5-10 minute bi-weekly or monthly call, while others are interested in nothing more than an annual update.
Additionally, ongoing communications should build on the last meeting. Managers can rest assured that the consultant has entered their notes of prior meetings into their CRM database, so retelling the same story in the same way is a waste of time.
DCQCOMM: What about blogging, social media, email marketing, inbound marketing, etc.?
SR: We obviously use email for routine communication, but not really to distribute that sort of content. Honestly, we just haven’t seen a big demand for those sorts of approaches. The institutional space is pretty conservative and slow to change, so while that is obviously a direction in which marketing seems to be moving, it’s just not something that our clients or prospects are clamoring for at the moment.
None of this is to say that can’t or won’t change, and change quickly, which is another reason why getting to know the preferences of the consultant class is important. Once consultants start expecting activity with those touchpoints, we’ll start offering them.
DQCOMM: Any last thoughts?
SR: Only that slow business environments are no excuse for being inactive. There are always things a manager can do to improve relationships with consulting firms, and thus increase their odds of success in the future.
DQCOMM: Thanks for your time, Steve.