Differentiate your distribution strategies
Welcome to our blog series on what you (the asset manager) can do with the new benchmark of client behavior and conversely, why you cannot do without it.
Over the series, we will explore how you can use behavioral benchmarking to complete your business intelligence, cater for behavioral differences, manage and improve the different aspects of your client journeys, differentiate your distribution strategies, and alleviate clients’ survey fatigue.
To kick off, this article explores how you can use CX data to differentiate your distribution strategies while also keeping a close eye on costs.
Why develop distribution strategies?
Heads of distribution aim to attract and retain clients and they do this via their underlying marketing, sales, and service strategies.
From a behavioral perspective, marketing is about capturing and holding your audience’s attention, sales is about getting prospects to say ‘yes’, and service is about encouraging clients to stay with you.
You can observe and measure these behaviors in your clients, as well as compare them against your peers.
Crucially, every human can also stimulate behaviors in others – like you stimulating target behaviors in your clients. What if you could hold their attention for longer? Get them to say ‘yes’ in greater numbers? And, once onboard, get them to stay for longer and deepen their relationship?
At Accomplish, we believe these are the goals distribution strategies should aim to achieve and why, therefore, your colleagues and you should base them on target behaviors.
Differentiate your distribution strategies
What makes an effective strategy? As we have said previously, good is forgettable and only the extraordinary gets remembered, shared and discussed. And, for the avoidance of doubt, no business can buy anything that it does not first remember, share, and discuss. So, if your distribution strategies aim for ‘good’, then they are aiming to be forgotten.
Or in the words of Michael E. Porter:
“Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”
This is of vital importance to asset managers who are price-takers in an over-supplied market of samey products.
So far, so logical. But how can you develop distribution strategies that will help you stand out while not taking your eye off costs?
In our opinion, in short, blind competition is dumb and informed and deliberate competition is smart. Therefore, effective distribution strategies need to be informed and deliberate.
How you can use CX data to do this in practice
In this section, we show you what we mean with three real examples from the industry Behavioral Benchmark. We have chosen them to contrast blind competition from individual teams against informed, deliberate, and connected strategies, as well as to highlight inter-play between different client behaviors.
- Aiming for the most event attendees – if your competitors maximise the number of follow-ups with the right people as a result of multiple smaller events that are cheaper and easier to service, then a big expensive showcase event could be a failure if it over-burdens your sales staff and reduces their follow-up rate. A return on investment (ROI) calculation would compare event attendance against follow-up lead rates. We are not against big events; we are just saying that aiming for the most attendees is to target the less commercial client behavior.
- Focusing solely on $ AUM sales targets – of course, you must measure $ AUM sales but achieving them should only receive two cheers if a competitor’s sales team’s conversion rate is twice that of yours. Your team may have achieved their target but fallen short of what was possible, leaving the organisation with a potentially expensive opportunity cost and a question over whether the target was right in the first place.
- Aiming to have the most meetings with clients – client meeting time is an important behavioral indicator of ongoing engagement and meetings are crucial to identifying new opportunities. But you can take it too far. Your Head of Distribution should not be happy if you invested time and expense in holding 3x as many meetings per client per year compared to a firm whose client retention and depth of wallet exceed yours. That second firm is keeping its focus on more commercial client behaviors (staying longer and coming back for more). And it is achieving more for less and saving its expensive sales teams for other activities. For whatever reason, the first firm is being inefficient with both its clients’ time and its own resources.
The trick to success? Explore your CX data and how you compare against your peers. Then identify your target client behaviors and design your marketing, sales, and service strategies to stimulate them. Use your ongoing measurements to monitor ROI.
As we have said before, CX is controllable, incremental, and commercial which, we believe, is why we are seeing increasing numbers of Heads of Distribution engaging in behavioral benchmarking as a reliable way of measuring CX.
The full series of blogs
We hope you enjoyed this article and that it got you thinking about ways you can use CX data as vital business intelligence to differentiate your distribution strategies.
The blog series will span the first half of 2022 and will explore the following topics:
- Complete your business intelligence with behavioral data.
- Cater for behavioral differences.
- Manage the different aspects of your CX.
- Differentiate your distribution strategies.
- Alleviate clients’ survey fatigue.
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