Tag Archives: customer experience

Why Your Fund Marketing Strategy Isn’t Working

helpIn manager selection, most investors will look beyond your fund’s track record and give weight to organizational factors that provide them with confidence that the business is well-managed and likely to succeed long-term.

If your strategy and marketing efforts have qualified your fund for an investor’s short list of candidates, then business management factors can either close the deal or disqualify you from further consideration. And with so many funds competing for attention, investors are always looking for any reason to bump funds off their “watch” list.

Like all types of business, your fund’s organizational strength is based on tangible and intangible factors related to the quality of its leadership, the consistency of its operational disciplines and the depth of its customer focus.  On a more granular basis, here’s what those 3 factors entail:

Quality of Leadership: Investors Bet on the Jockey

  • Articulating the Vision…This task is far more complex than sticking a mission statement in a pitch deck or website; it’s a belief system that drives the business. According to Fast Company magazine co-founder, William C. Taylor, leaders at high performing companies are “able to explain, in language that is unique to their field, and compelling to their colleagues and customers, why what they do matters and how they expect to win.” Taylor claims leaders who think differently about their business invariably talkabout it differently as well. Your fund must “talk the walk” to inspire and convince internal and external audiences.
  • Building the Culture…A company’s culture is shaped by how its leadership “walks the talk,” and has a great impact on organizational health and longevity. Some businesses succeed financially in spite of a poisonous or opaque internal culture, but never reach their full potential because the people who work there are not truly engaged. Beyond depicting the traditional org chart, your fund needs to explain to investors how it manages human capital, and must demonstrate how it fosters transparency, communication and teamwork.
  • Thought Leadership…This overused marketing term is typically associated with blog posts and publicity. But bona fide thought leadership is less about self-promotion, and more about acting as a serious student of one’s own professional discipline; whether that be asset management or auto mechanics. Your fund must demonstrate that it’s much more than a one-trick pony with a smart investment formula. Investors want to engage with people who are constantly exploring new ideas and better approaches in their pursuit of excellence.

Operational Discipline: Investors are Business Detail Junkies

  • Working ON the Business…Most business owners are so focused on working AT the businesses (i.e., managing the fund), that they fail to create or properly manage all the internal disciplines necessary for the enterprise to succeed. More importantly, according to Michael Gerber – author of “The E-Myth: Why Small Businesses Don’t Work and What To Do About It” – your fund’s intrinsic value and ability to survive is based on how well it has defined, documented and perfected all of its internal systems and methods. There’s a reason why McDonald’s french fries taste the same in all of its worldwide locations: they constantly work ON the business of sourcing, preparing, cooking and serving french fries.
  • The Outsourcing Challenge…For many businesses, the outsourcing of middle and back office operational functions can make great economic sense. But investors need to know that your fund isn’t simply a “virtual” business composed of a contractual network of various 3rd party providers. If your fund outsources any critical business functions, it needs to assure investors that you (not the outside providers) are 100% accountable for those functions. More importantly, your fund must demonstrate rigorous internal disciplines for oversight that ensure the accuracy, timeliness and quality of all outsourced functions.

Depth of Customer Focus: Investors Need to Like You

  • Accessibility/Affability/Ability…These “Three As” of consultation, taught for decades in medical schools, have application across all service businesses, including fund management. Every type of customer – whether they’re shopping for legal representation, tax advice or portfolio alpha – is influenced as much by your likeability as they are by your college degree, your fancy office or your IQ. Irrespective of its track record, if your fund (as individuals and as an organization) doesn’t come across as friendly, easy to work with and professional, investors are unlikely to explore a relationship. Ego and attitude can be brand liabilities for any business, and fund managers who display those personality traits risk losing out to competitors who may be less talented, but far more likeable and marketable in the eyes of investors.
  • Managing Customer Experience…Many funds don’t even think of investors as customers, but rather as potential beneficiaries of their market insight, trading genius or financial returns. This stilted point of view is often reflected in how those funds communicate and behave, both with prospective and current investors. But the most successful funds understand that investors are people, regardless of the size of the institutions they represent, and that nurturing personal relationships matters. Your fund would be well-served by following the advice of Bruce Temkin, founder of The Temkin Group, and a recognized authority in customer experience, who suggests that all companies:
  • Focus on your customers’ needs, even when internal priorities push them to be ignored.
  • Orient your thinking on customers’ journeys, even when the organization cares about individual interactions.
  • Design for customers’ emotions, even when success and effort are often the better understood parts of an experience.
  • Develop innovative ways to treat customers, even when the status quo seems to be good enough.

Selling performance alone is a dead end for funds, and is the #1 reason why fund marketing strategies fail.

Increasingly, investors are more interested in how funds create and sustain a successful business enterprise. To build a company that provides investors with the confidence to put capital at risk, fund managers must be held to the same high standards of leadership, operational discipline and customer focus that private and public companies face in seeking to attract equity investors.

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What Your Doctor Can Teach You About Business Growth

For many decades, physicians have been taught the “3 A’s” of a sound medical practice. They are the 3 qualities that their patients will value most highly, in rank order of importance:

  1. Affability
  2. Accessibility
  3. Ability

Regardless of whether your professional field is medicine, law, technology or finance, that same ranking applies to how you are valued by clients, particularly in B2B businesses.

For better or worse, your clients judge you (or your firm) primarily on a personal, visceral basis. First, they must like you (“Affability”), and be confident in your commitment to them (“Accessibility.”)  Your actual performance (“Ability”) will always be judged by clients on a relative basis, compared with their own knowledge of your craft, their past experience with other providers, the career risks involved in making a change, etc.

This ranking priority may seem illogical to a lawyer, fund manager or a physician whose view of the world is built on measurable evidence and tangible outcomes. But this apparent anomaly in client sentiment is supported by many real life examples. Insurance companies report that doctors who admit their mistakes and apologize to patients are rarely sued. Successful stock brokers report that they seldom lose clients for poor portfolio performance, if they are quick to explain why it happened and what’s being done about it.

Although client communication is at least as important as actual performance in most service businesses, companies seldom give that task the attention it deserves.

But for firms that understand the business impact of client communication, and have made a commitment to pay more than lip service to the discipline, the most significant challenges involve:

  • Finding the proper communication frequency, channels and content
  • Cutting through the vast amount of information that clients receive each day
  • Applying tactics that reinforce their firm’s value proposition and differentiation

Here are a four ways to improve your firm’s client communication strategy:

Stop Guessing About What Clients Think: One of the most obvious yet overlooked ways to maintain and strengthen communication with clients is to ask them for their opinion. Legendary New York City Mayor Ed Koch constantly asked his constituents, “How am I doing?” And it was more than a political gimmick, as Koch always listened to their responses, and applied what he learned to improve his performance and reputation.

You can measure client sentiment on an informal basis, similar to Ed Koch; but you’re more likely to yield meaningful results if you conduct a formal survey either online and / or by telephone. Online platforms like surveymonkey.com make it easy to design, conduct and evaluate a client opinion survey. You can conduct phone interviews yourself, or engage a 3rd party.

There’s a widely used survey methodology that yield “Net Promoter Scores,” designed to measure client loyalty; but for most small firms, you really only need to ask three questions: 1. Are we meeting your expectations? 2. If not, why not?  3. How else can we add value to our relationship?  The responses will likely provide some basis on which you can measure client sentiment and make beneficial changes. But the intrinsic marketing value of any opinion survey – regardless of the questions or response rates – is that it lets clients know you care about them.

Consistency and Speed of Communication Matter: The cornerstone of your client communication strategy should involve regularly scheduled contact; ideally on a quarterly basis, and provide content that’s of genuine interest to them.  This does not include your performance / activity reports; news that touts your firm’s “Best of [fill in the blank] Award;” its 4 recently hired employees; or the results of last month’s employee 5k mud run. It should include viewpoints and guidance that’s not self-serving, and helps your clients to succeed. For scheduled contact, consistency also matters. Using floor broker lingo, this is a “Fill or Kill” decision, so either commit to scheduled client outreach, or don’t start a program.

Your firm should also be prepared, on an opportunistic basis, to communicate with its clients when there is some (internal or external) material event that may cause them to be confused, concerned or excited. This is a critical part of what “accessibility” means: that you’re always thinking of your client’s welfare. Whether it’s a 500-point drop in the Dow Industrials, or a new scientific discovery related to their business, you need to reach out to your clients – by email, phone, text, snail mail – as soon as possible to deliver the (bad or good) news. Ideally, you’ll also be in a position to help them avoid, adjust to or benefit from the information you provide.

Personalize Your Client Communications: Small firms have a significant marketing advantage, because it doesn’t take very much effort or expense to add a personal touch to their communications with clients. For starters, your firm should know and track personal information of key individuals, including their birthday, spouse / partner’s name, children’s names and ages, hobbies, favorite sports teams, etc. No detail is unimportant. 

An old adage, “People don’t care how much you know, until they know how much you care,” rings true across all lines of business. The more information you have about the personal lives of your clients, the better prepared you’ll be to have conversations about what’s most important to them, and to find ways to reinforce your long-term relationships. Ask about their trip to Belize. Send them a handwritten note when their hockey team wins the Stanley Cup, or when their daughter gets accepted to law school. Send a box of cigars when they win their club’s golf tournament. Treat them to dinner at an upscale restaurant on their 10th wedding anniversary. As long as your efforts are genuine, clients will remember, appreciate and reciprocate in terms of loyalty.

Think Outside the Box during Holiday Season: In lemming-like fashion, around the holidays most companies will send out a greeting card purchased from an online catalogue, imprinted with the firm’s name. (Many companies don’t even bother to sign their card, or to add a personal message.) Holiday season conformity can provide a great opportunity to stand out from the crowd. For example, instead of sending out a holiday greeting in mid-December, consider sending a clever Happy Thanksgiving card, which won’t get lost in the pile of December’s cards, and will avoid offending anyone, based on their religious affiliation.

Another way to stand out is to forgo the traditional cocktail party or reception, where great expense and advance planning can all be for naught if bad weather or a competing event keeps your invited guests from attending. As an alternative, host a fancy catered luncheon for your client’s entire staff at their own office location during the holiday season, where you attend and hand out the egg nog or candy canes. Or avoid the holiday madness altogether, and around Memorial Day send your clients a beach chair, boogie board or cooler (all featuring your firm’s logo) to celebrate the beginning of the summer season.

The real secret sauce of client communication for any business is to manage the effort as an opportunity rather than a necessary evil. Or in the words of Dicky Fox, fictional mentor of Jerry Maguire, from the 1996 movie of the same name:

“The key to this business is personal relationships.”

Make that your own mission statement, and watch your business grow.

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The Power of Insulting Customers: Confessions of a Vacuum Cleaner Sales Rep

The Rolls Royce of Vacuum Cleaners

My connection with advertising legend David Ogilvy is that, early in our careers, we both sold consumer appliances door-to-door. Long before he founded Ogilvy & Mather in 1949, and following a short-lived career as a chef in Paris, David Ogilvy sold AGA cooking stoves to housewives in Scotland. Long before I founded Highlander Consulting, as a college student seeking money for gas and beer, I sold Fairfax vacuum cleaners to housewives in Connecticut.

Ogilvy claimed his door-to-door sales experience provided insights into the mind of the consumer that earned him acclaim as an advertising wizard. I credit my door-to-door experience with an appreciation for the power of insulting people as a sales tactic.

Created long before Star Wars, Fairfax vacuums looked like R2-D2, were priced at several hundred dollars and equipped with a motor so powerful it could nearly – to borrow a phrase – suck the chrome off a trailer hitch. Although my recollection of how I first became associated with the Fairfax Company remains fuzzy, I can recall every detail of my first home demonstration, given to an unsuspecting housewife by my sales trainer, a seasoned vacuum cleaner salesman straight from Glengarry Glen Ross.

Here’s a replay of our sales visit:

Sales Trainer:    Thank you, Mrs. Jones, for allowing us to demonstrate the power of the Fairfax vacuum. Before I do that, would you kindly show me the vacuum cleaner you’re currently using to clean your beautiful house?

[Mrs. Jones brings her vacuum out of the closet. The Sales Trainer plugs it in and then pulls out a glass jar full of dirt, hair, dust balls and other unpleasant items.]

Mrs. Jones:         Oh, my!

Sales Trainer:      Now I don’t want you to be upset, Mrs. Jones, I assure you that no permanent damage will be done to your rug.

Mrs. Jones:         Well, I’m not sure that…

[The Sales Trainer opens the top of the glass jar, and dumps the entire mess on to a portion of the rug.]

Mrs. Jones:         Oh, my!

[The Sales Trainer smiles at Mrs. Jones while he steps into the pile of dirt and grinds it into her rug with his foot.]

Mrs. Jones:         [Visibly upset.] Oh, my!!! How will I ever get that dirt out…

Sales Trainer:      Let’s see how well your vacuum cleaner handles this mess.

[The Sales Trainer vigorously vacuums the rug for several minutes with Mrs. Jones’ vacuum until no dirt is visible and the rug’s original appearance is restored. Mrs. Jones now appears more relaxed.]

Sales Trainer:      Would you say that this area of your rug is clean now, Mrs. Jones? Why don’t you get down and take a closer look, to check for any dirt?

[Mrs. Jones reluctantly agrees, bends over to take a closer look and runs her hand over the carpet.]

Mrs. Jones:         You seem to have gotten all of the dirt out. You really scared me for a moment.

Sales Trainer:      Well, let me give it a couple more passes with your vacuum, just to be sure it’s clean.

[The Sales Trainer begins to vacuum the area again. Mrs. Jones looks at me.  I look down at the floor until he stops the vacuum…The Sales Trainer sits down and directs Mrs. Jones’ attention to his new Fairfax vacuum which features a clear plastic fitting in the middle of the hose (for demo purposes only) containing a white, porous paper filter designed to collect any dirt before it enters the vacuum canister.]

Sales Trainer:      As you can see Mrs. Jones, my Fairfax vacuum is equipped with a special paper filter that will show us how much dirt is being collected. So let’s go back over that spot we just cleaned with your vacuum.

[With great fanfare, the Sales Trainer begins to vacuum the rug. As he does, he points to the white filter in the hose, which immediately begins to collect debris and turn black in color. Mrs. Jones stares at the filter. She looks quickly at the Sales Trainer, then at me, and begins to mutter something to herself as the Sales Trainer shuts down the Fairfax.]

Mrs. Jones:         That’s amazing…I never…

Sales Trainer:      As you can see, Mrs. Jones, your vacuum appears to have missed quite a bit of dirt and debris that was in your rug.

Mrs. Jones:         It certainly did.

Sales Trainer:      Mrs. Jones…may I ask you a personal question?

Mrs. Jones:         Well, I guess so…

Sales Trainer:      Mrs. Jones…Do you care about the health and safety of your family?

Mrs. Jones:         Why, of course I…

Sales Trainer:      Mr. Jones…Is this really the way you want your family to live…[long pause as he points to the black filter on the hose]…in a dirty, germ-filled house?

[Having just suggested that Mrs. Jones is an unfit housekeeper, she is clearly shaken and unable to respond. She looks at the Sales Trainer, and then at me. Expecting the worst, I shuffle my feet, planning a rapid retreat from the house. The Sales Trainer remains frozen in position, during a very long silence, staring at Mrs. Jones, waiting for her to answer his question.]

Mrs. Jones:         [Clearing her throat.] How much will your Fairfax vacuum cleaner cost me?

[The tension in the room evaporates. The Sales Trainer sits down, pulls out a contract from his valise, and proceeds to sell Mrs. Jones a new Fairfax vacuum.]

My tenure as a Fairfax vacuum sales rep was short-lived and highly unsuccessful, never having found the courage to ask Connecticut housewives the insulting question that would initiate a sale. However, to this day I continue to apply the important lessons in sales craftsmanship taught to me by my Fairfax vacuum sales trainer:

  • Know what’s important to your customer.
  • Be straightforward in pointing out a problem (or opportunity.)
  • Demonstrate a viable solution.

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Managing Customer Expectations and Being Picked Last

Soccer Can Be More Exciting Than Lawn Bowling

This past weekend, I joined a group of pre-teen relatives and their neighborhood buddies in a friendly game of soccer – a sport that had not yet made its way to America when I was in school, and has never been of any interest to me. Guys in shorts + lots of running = Snore-fest.

Maybe the kids sensed my underlying disregard for their sport. Maybe it was my gray hair. Or my middle-age one-pack abs. Whatever the reason, when they chose up sides, I was picked dead last, and the team that got me acted as though they had just been handed a red card. Humiliated, I took up a defensive position…assigned by a 12 year-old soccer hot shot…to keep the ball from getting near our goalie.

For the next hour, as balls whizzed past my head, through my legs and into our net, ignoring the impolite remarks from my cranky teammates, I nursed my wounded ego and considered the impact of expectations on performance and perception.

Perhaps I was playing poorly only because my teammates expected me to stink. I’ve certainly been a victim of low expectations on the golf course, where fellow hackers accuse you of “sandbagging” if you start playing better than your handicap suggests…so you quickly revert to double bogey performance.

There are a host of related studies on this subject: Students who outperform peers in tests because their teacher convinces them that they are smarter than other kids.  Patients who experience better clinical outcomes because they believe in the effectiveness of the therapy or medication. Factory workers who are more productive because their co-workers are supportive and want them to succeed.

But here’s an interesting twist: attempting to manage customer expectations can backfire.

Exceeding customer expectations may be a key to customer satisfaction, but a Journal of Marketing Research study suggests that seeking to define their expectations in advance can cause consumers to focus on the negative aspects of the purchase or experience, and to view the experience more negatively than customers whose expectations were not solicited.

The lesson here for marketers looking to measure and improve performance: Don’t ask customers to define their expectations before you deliver
the experience. Following the customer experience, ask them if, how and why it met their expectations.

The lesson for middle-aged, aspiring weekend soccer stars: Avoid the humiliation of being picked last. Buy a whistle, make yourself permanent
referee, and call ridiculous fouls on all those pimply neighborhood kids.

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