I wrote this piece for Jackson Analytics, and I'm reposting it here with their permission
Football coach Bill Parcells famously once said, “You are your record.”
In other words, all the spin, excuses, and rationalization in the world don’t mean much when stacked against your actual performance.
For investment management firms, your performance data is your win-loss record. That’s why we love it.
Data is clean. Data tells a story all on its own. And, importantly, data makes your firm’s broader story much more persuasive and convincing.
Why You Must Focus On Data Too
Successful investment management marketing uses data to validate the firm’s marketing message and help define the topline strategy.
For example, let’s say you are
a large cap value manager
whose portfolio management strategy provides no alpha, with a beta of 1.
It’s tough to support a marketing message that claims to be innovative, differentiated or “outside the box” in some way. You offer market returns. Build your message around that. It’s more honest and truthful.
Marketing should never be used to spin uncomfortable data points.
The Key to Success
Your data is your resume. Treat it that way and make sure everything is accurate and complete, timely, and easily accessible.
The greatest marketing fallacy in the investment management industry is: “If we have good performance, clients will find us.” That’s hooey.
Attractive performance can get you tickets to the theater – but it’s a strong data management game,one tied closely to your marketing and sales effort that will get you on stage and into the spotlight.
Bottom line? Without a detailed data management and marketing strategy, even great performance can’t save you. Why?
Incomplete database narratives with inaccurate or outdated data sabotage every claim you make to professionalism;
Data points that contradict each other provide a reason for consultants to eliminate your firm after an initial screen; and
Unpersuasive database narratives blunt your competitiveness against firms with similar performance.
Being a good portfolio manager is only one part of running a successful investment management business.
There’s client service, marketing, sales, compliance, office administration, and technology. Each of these business functions must act as a positive force on the other, enabling the business to roll forward unimpeded.
But when these functions act more like friction, rather than complimentary propelling forces, the entire enterprise suffers, compromising your firm’s ability to serve clients and the interests of your stakeholders.
Managing data, from how it is generated, warehoused, reconciled, and distributed is an aspect of investment management marketing that firms should always appreciate.