Financial firms are in the midst of planning their 2024 marketing and sales strategies and are grappling with an increasing amount of new marketing technologies, engagement approaches, and marketplace uncertainty. What is working and what is not? What can we learn from last year? Where are we going forward? Then you have another series of questions about how best to implement your chosen strategy.
In order to explore this strategy building process more fully, we reached out to financial services marketing expert and Founding Institute member, Dan Sondhelm of Sondhelm Partners – an experienced provider of marketing, public relations, and sales strategies for the asset management and RIA industries. His firm won the Hedgeweek US Awards 2023 Best Third-Party Marketing Firm accolade, along with a strong third place in the Best PR & Marketing Firm category. We will be exploring his thoughts and insights on developing strategy that can drive active advisory and asset management firm positioning and their own distinctive strategies for their marketplace and future growth.
Hortz: What are the most common mistakes that financial firms make during their annual sales and marketing planning process?
Sondhelm: A common and costly mistake we see boutique asset management firms make is failing to invest enough time or resources in identifying their target audience for marketing campaigns and neglecting to focus on determining who their core client is - understanding who they are, why they are investing, and how to communicate with them. This can result in wasted resources through ineffective messaging, targeting the wrong audience, or assuming they can earn their clients’ loyalty through good investment performance alone, so they are surprised when clients leave at the first signs of underperformance.
Another mistake firms make is not spending enough time watching out for their competition. If you do not know who your competitors are and what they are offering, how can you know where you stand out? How do you create a differentiated story? Successful firms use their knowledge about their competition to develop products and create marketing and sales strategies that take advantage of their firm’s strengths and competitors’ weaknesses.
But these mistakes stem from one overarching mistake smaller firms make, which is failing to allocate sufficient resources for a cohesive growth strategy that aligns marketing and sales. In many firms, marketing and sales operate in different silos, often resulting in inconsistent messaging and a lack of coordination between sales and marketing efforts.
Firms that are successful in growing assets recognize that marketing and sales go together. Sales can help marketing and marketing can help sales. Data and insight from the sales team helps marketing hone their messaging and more clearly define their target market. With that, marketing can generate more qualified leads and provide sales with more closing opportunities. It is a powerful synergy when properly implemented.
Hortz: What do you feel are the key areas to think through as you are developing your sales and marketing plan?
Sondhelm: A critical element of the planning process often ignored by firms is to thoroughly assess their current situation and the effectiveness of their current plan. Firms must be willing to ask questions of their senior staff to identify and prioritize critical issues that must be addressed in the planning process.
It is an opportunity to review your previous goals, assess your current plan, and ask hard questions to determine what worked and did not work and why. Did we achieve our goals? If not, why not? Were they unattainable, or did we execute our plan poorly? If we achieved our goals, what was the reason? Were our goals specific enough? How can we improve on it?
As part of that assessment, firms should identify their strengths and weaknesses, particularly in the areas of marketing and sales. Some firms are marketing-oriented but have weak or inconsistent sales efforts. Others are more sales-focused with minimal resources committed to marketing. For smaller firms with ambitions to grow their AUM, the two cannot be mutually exclusive. They must work together under a cohesive strategy for optimal results.
You must then evaluate your target markets using your sales data and client databases. Who are our existing clients, and why are they choosing to do business with us? Has our target market or the persona of our ideal client changed? Should we be diversifying our target markets, or do we need to more narrowly define one?
It is also important to be aware of new technological advancements that can significantly impact your sales and marketing efforts. If you are not using the latest technology to reach your target market, you may be missing out on opportunities to grow your business.
Then you must revisit your story. Even a well-conceived strategic plan will not help you if you do not have a good story to tell or an effective way to get your story out. Firms must be able to differentiate themselves in a way that goes beyond a branding statement or value proposition. Your story needs a comprehensive and compelling narrative that clearly explains what you aim to achieve and why your firm is uniquely qualified to deliver it. It should speak convincingly to your target prospects about what they can expect to receive from your firm that they cannot get from other firms. With the answers to these critical questions, you can prioritize your vital issues as you begin developing your sales and marketing plan.
Hortz: How do you hone this planning process into a strategy?
Sondhelm: It starts with setting clearly defined goals for your sales and marketing efforts. I recommend the SMART process for setting goals. They must be specific, measurable, achievable, relevant, and time bound. For example, you may aim to increase sales revenue by 20% in the next quarter or generate 500 new leads per month.
Second, you develop your strategy based on your goals and the critical issues you fleshed out in your assessment. The strategy outlines the tactics and activities you will use to achieve your goals and address critical issues. For example, your strategy may include creating targeted marketing campaigns, improving your website's user experience, or training your sales team on new techniques.
Once you have developed your strategy, it is vital to get buy-in from all levels of your firm by clearly and thoroughly communicating to all stakeholders, from senior management to front-line employees. Setting broad objectives, such as increasing AUM by 20% in the first year, leaves too much open for interpretation as to how it actually gets done.
It is crucial to secure the commitment of top-level executives with the authority to allocate resources and make critical decisions. They should understand the importance of your strategy and be willing to provide the resources needed to make it happen. That includes ensuring you have the right people with the necessary skills to execute your strategy and enough budget to fund your initiatives.
It is also essential to include a process to regularly review your plan for effectiveness and make adjustments, as necessary. This can involve testing different campaigns, channels, and messaging to determine what works best. Also, monitoring your key performance indicators (KPIs), soliciting feedback from customers and employees, and staying updated with changes in the market and competitive landscape. Sometimes changes in the market or competitive landscape can sneak up on you because they are constantly evolving. It is vital to keep your finger on the pulse of the marketplace.
Hortz: How do marketing support firms like yours have to structure themselves to be able to help their asset management and RIA clients in this rapidly changing, hyper-competitive business environment?
Sondhelm: To competitively grow as a marketing and distribution consulting firm in this industry, it is essential to offer a comprehensive range of solutions and expertise to help clients achieve their goals and balance in their sales and marketing efforts. These include strategy development, content marketing, digital marketing, public relations, and third-party marketing, often in collaboration with other third-party marketers and MarTech firms. By providing this range of services and expertise under one roof, like Sondhelm Partners does, you can help asset management and RIA clients implement an integrated marketing plan tailored to their specific needs and goals. This approach saves clients time and resources and allows them to work with a single provider who understands their business and can help them achieve their objectives.
Industry support firms need a high level of consultancy capabilities to work closely and creatively with financial firms to diagnose and identify areas where they are lacking and how to develop a customized and comprehensive plan to address those areas. Our process begins by gaining a deep understanding of the client's needs and goals with a thorough analysis of their current sales and marketing strategies, target audience, industry trends, and competition.
In some cases, a client may need to expand their sales or marketing efforts from very little, having traditionally relied on referrals, and may need to expand its marketing efforts to reach new clients. In such cases, you need to provide content marketing and digital marketing services to help clients create valuable and relevant content for their new audience and help them reach a wider or targeted audience through online channels.
In other cases, a client may already have a strong sales or marketing strategy in place but may need to achieve a better balance between the two. For example, in a firm with a strong sales team but weak marketing efforts, you need to be able to help the client develop a comprehensive marketing plan that complements their sales efforts by creating targeted campaigns that generate more qualified leads.
To support a client's sales efforts, we may partner with third-party and MarTech firms that provide sales-related services, such as meaningful investor introductions. For example, we could collaborate with a third-party marketing firm with strong relationships in a particular area or modern technology and approaches to help them start more conversations.
Hortz: What best advice or recommendations can you share with boutique advisory and asset management firms on crafting their sales and marketing plan for 2024?
Sondhelm: After several difficult years, 2024 will be a pivotal year for boutique asset managers and RIAs who must get back on a growth track. For many, it will take time, resources, a rejection of the status quo, and, above all, a commitment to move toward meaningful change, which may seem daunting.
The most important advice I can offer is to focus on niche expertise. By honing their niche specializations, asset managers can offer a strategy not widely covered on the fund spectrum while differentiating themselves as an authority in a particular area. That has several growth possibilities, from attracting new AUM to becoming an attractive target for a merger or acquisition.
Smaller to mid-sized firms can benefit tremendously by building their thought leadership to establish their authority and build a following. By creating a thought leadership platform consisting of a blog or podcast, you can share insights and analysis with potential clients. You can increase your visibility and credibility by working with the media—reaching out to journalists for interviews, writing bylined articles, and then showcasing that content through video marketing, social media, PR, and other sales and marketing efforts.
Firms must also embrace technology if they hope to grow. Technology, such as CRM software, lead generation tools, and marketing automation software, can streamline your sales and marketing processes and substantially improve your ROI. The same technology can also provide data-driven insights that can inform your sales and marketing strategy. Utilizing data to analyze website traffic, email open rates, and other key performance indicators enables you to identify trends and make informed decisions.
Above all, to ensure their success, boutique firms must develop a strategic mindset with a balanced marketing and sales perspective. When marketing and sales come together with a good story, you are going to get your story out to the right people more often and attract more interest in your firm.
Related: The Emergence of Generative AI in Financial Services