Many firms seem to think of their investment management marketing effort as a means to an end: create and distribute a message that helps a firm to grow assets under management.
It’s a simple enough concept; one that’s not incorrect, either.
But I think that approach gives short shrift to the firm’s marketing function, and doesn’t give it the respect it deserves.
Many firms would do well to reorient their thinking about how they approach their marketing. What I mean is, if firms looked at marketing as an investment whose importance is on par with security selection and portfolio management, their effort, over the long term, would yield much sweeter fruit.
Marketing as a Value Investment
We all know what defines “Value Investing”: find companies whose stock is undervalued by the market, buy it, and then wait for the market to realize its mistake.
And although not every investment management firm invests according to value principles, its strategic efficacy is not in doubt.
So, how does this relate to investment management marketing?
First, I’ll concede that few, if any investment management firms would say that marketing isn’t important. Clearly, it is.
But given the direction in which the investment management industry is headed, from institutional to wealth management to hedge funds and private equity, I strongly believe marketing is undervalued by the market (which in this case, is the management teams of investment firms).
Investment Management as a Commodity
The salad days of investment management, the days of easy money, have passed. Investment management firms have largely become a commodity. In a recent post, I noted,
According to eVestment, there are 425 domestic, long-only large cap growth products against which you are competing. That means that even if you fall into the top decile, there are 42 other firms with similar performance. Top quartile? Over 100.
Without an effective marketing message and distribution platform, nobody has a compelling reason to care about you. Performance does not make you special. It's that simple.
So, in an increasingly commodified industry, when the traditional benchmarks of differentiation have been rendered increasingly impotent by competition, how can an investment management firm break through the noise?
Inbound Marketing for Investment Mangers
Today, firms cannot simply employ the traditional relationship-based marketing strategies which dominated the industry since its inception (and is a strategy upon which most firms still rely).
Firms looking for true differentiation must chart a different course; one that leverages a firm’s unique perspective, packaged in blog posts, eBooks, white papers, thought leadership piece, video, and podcasts, distributed via email, websites, and social media, all measured with advanced analytics hat allow for a clear understanding of what’s working and what isn’t.
This data-driven marketing isn’t just the future of investment management marketing – it should be its present.