Investment managers are reaching an inflection point, increasingly having to realise the benefits of effective communication strategies.
The crises started in 2008 – in which investors flooded for the exits and became increasingly difficult to tempt back – only accelerated a secular trend, in which investors are becoming increasingly experienced and competent, hence demanding to fully understand – and rightly so – what they are investing their money in.
If, indeed, communication is to become a vital part of investment managers’ activities, what are the crucial elements of an effective campaign?
To start with, communication should not be treated as an option. Most firms agree that marketing is an integral part of an effective corporate strategy, but many fail to realise that communication is an integral component of marketing. The first premise of any successful campaign is the belief in its power. This might seem obvious, but all too often firms engage with an audience without full conviction. Whether as a result of the firm’s strategy, or individual staff indifference, the result is that the communication falls flat. Successful campaigns feel passionate and genuine to their audience, and this is only possible if the firm’s spokespeople truly believe they have something important – and different – to say.
Secondly, the firm’s external communication partner, normally an agency, should truly understand the value an investment manager provides to its clients, which is why a communication partner specialised in investment management is crucial. The more specialised the communication partner, the more intimately they will understand a firm’s products, competitive landscape and investor mindset. They will understand the challenges and the opportunities to add value to clients. Whereas non-specialist agencies see an undifferentiated, broad brush view of the investment landscape, a specialist can sharpen and elevate the differentiating subtleties that make a specific investment manager a compelling investment proposition.
Thirdly, in a “technical” business, indeed “Content is King”. Commercial communication in the investment business should, ultimately, answer the question “Why should I give my money to you rather than to the many other managers who say they do the same thing?”, an endeavour whose achievement relies on powerful content, i.e. clever thinking, clearly defined, effectively articulated and – above all – innovative. The “innovative” attribute of powerful content seems like a cliché hardly worth mentioning, yet it is the most neglected attribute in investment communication: a cursory look around most marketing communication will show that most investment managers have the very same… ”differentiators”. If effectively deployed, powerful content will play a key role in attracting new investors, as well as retaining assets within the fund, particularly when the going gets tough (as it always does, sooner or later), showing why and how a firm’s people, approach and processes are superior to their competitors’.
Fourthly, a specialist communication partner will also provide the most effective distribution of the distinctive content, ensuring its maximum impact in “selling” the investment manager and/or its solutions to the intended target audience within the investors’ community.
“All too often firms engage with an audience without full conviction. Whether as a result of the firm’s strategy, or individual staff indifference, the result is that the communication falls flat.”
The right communication partner will distribute the investment manager’s content via all the relevant channels, be they traditional media outlets or the new digital media channels (encompassing the likes of the firm’s website and social media strategy), also thanks to its privileged relationships with journalists. The challenge is to make all of these channels work effectively and interdependently to exploit their synergy. The desired result is an impactful and timely message, delivered to the right audience across every relevant outlet.
Lastly, and crucially, all of the above will be of little value unless the right content – be it the firm’s DNA and its supporting messages or the edge of a strategy/fund – is shared, understood, believed and rehearsed internally amongst all staff. Each employee should be regarded as a de facto brand ambassador for the firm. As such, investment communications cannot be understood as narrowly as the domain of a few spokespeople and must be thought of holistically.
Hence, investment managers should take seriously the responsibility to coach all team members in the company’s ethos and core messages. Regular coaching sessions and practice, as well as fostering a common culture, will ensure that the firms communications strategy is not undermined by the impression each individual employee portrays of the firm (not to mention the positive impact this activity has on people’s sense of involvement in their firm and, hence, on their morale, commitment, performance).
Investment managers are turning a corner in their attitude to communication. Those who succeed will be those who understand communication can be a game-changer, conceiving and communicating thought leadership which sets them aside from their peers.