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Asset Management Communications Blog

A Resource for Investment Management Marketing & Communications

Investment Management Marketing vs. Sales

July 07, 2015

Investment management firms that rely extensively on their performance numbers to grow their business are doomed to underperform their potential.marketing_vs_sales-783481-edited

Investment management marketing cannot overrely on portfolio performance numbers. Doing so ignores the realities of the market, and betrays a firm’s fundamental misunderstanding of what it means to have a professional sales & marketing effort.

Performance as a Valuable Talking Point
All else being equal, top quartile performance is a valuable talking point, but not a requirement for managing a successful investment management marketing effort.

Here’s a thought exercise: can you easily name a larger, more successful competitor with worse performance numbers? I’d imagine most of my readers would answer in the affirmative. So, if your numbers are better, but AUM is worse, it stands to reason that your more successful peers are doing something you aren’t.

I’d hazard a guess those competitors have a better understanding of the difference between investment management marketing and sales; in other words, they are doing a better job of first marketing, then selling their services.

Typically, these more successful firms have:

  1. Distinct investment management marketing & sales strategies that are thoughtful, organized, and aggressive;

  2. A strong understanding of their key buyer personas and how best to market to them;

  3. Sales and marketing teams in alignment with each other; and

  4. A budget commensurate with the importance sales and marketing holds in the firm’s hierarchy of importance.


Marketing vs. Selling
Last week, I was speaking with a new client who helps investment management firms to manage & market their data. He made an interesting observation:

"Investment management might be the only major industry where sales & marketing are treated as one-in-the-same."

Sales and marketing are not the same. Each is a distinct process (awareness & education vs. persuasion & decision) that nevertheless requires a great deal of alignment in order for each component to work as it should.

Whenever a firm has a product to sell, they need to develop a marketing plan to generate awareness and create leads. It must then nurture that lead into becoming a “sales qualified lead,” with a systematic process for transitioning these opportunities over to the sales team, who then must convert the lead into a client.

There is any number of ways of doing this, but Inbound Marketing for asset managers is one of the best.

Blurred Lines
How did the distinction between sales and marketing fail to develop?

I think it is a function of the innate priorities of the industry.

Investment firms originate because a person/group of people think they have created a better way of investing and managing money. Because the marketplace is so crowded, a tremendous amount of the focus is on the “Model,” the “Process,” and the “Philosophy.”

And not inconsequentially, that’s where the lion’s share of the budget goes.

After all, investors love to invest, and since they are typically running the business as well, this focus is understandable and entirely predictable.

It is equally predictable to see investment management firms tell themselves,

“Our model, process, and philosophy are awesome. If we continue to perform well, and get into a couple of databases, people will find us and we will grow, grow, grow.”

Sound good, right?

Here’s the problem: That’s not how it works. Here are three reasons why:

  1. Top quartile performance might differentiate you from 75% of your competitors, but not from the other 25%.

    In other words, good performance doesn’t make you unique, or even all that special.
  2. A half-hearted marketing effort reflects poorly on a firm as a business, which is more than enough reason to give consultants, institutions, business owners, and individual investors pause.

    If you don’t “get” that elemental aspect of running a business, what else don’t you get? Compliance? Client Service? Ethics?
  3. If your direct competitors are engaged in a professional sales & marketing effort, it makes your reluctant effort look even worse.

    Your marketing will differentiate you, but not in a good way.


Reality check: I understand that the vast majority of investment managers, wealth managers, hedge funds, and private equity firms don’t have the resources to maintain separate sales & marketing teams.

Budgetary pressures exist in the real world, & as a small business owner I am deeply aware of that fact.

But maintaining separate teams isn’t required so long as a firm has sales & marketing strategies that are distinct from each other.

That's the key.

Interested in learning about how your firm’s marketing effort can become more professional, with distinct metrics for ROI and asset growth?

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The Asset Management Communications Blog is a resource from Daniel Quinn Communications for investment management firms on effective marketing and communications:

   ~ Inbound Marketing / Content Marketing
   ~ Website and other online content
   ~ Content marketing for asset managers
   ~ Style guides
   ~ Presentation materials
   ~ General advice on effective writing.