HomeThe Positioning GamePublicationsAbout Dakin PartnersContact

Shortening the Sell Cycle
Dana Dakin: Article in the Investment Management Review

The institutional investment field is known for the long lead-time often required to close a sale. However, it is possible to shorten the sell cycle and, simultaneously, improve the quality of the overall sales effort.

Many barriers confront investment marketers today: the "big ticket" commitment required, the fiduciary responsibilities, the increasing sophistication and competitiveness of the field. In order to break down these barriers and accelerate the sell cycle, it is useful to divide the sales process into four distinct phases, each requiring a different approach.

Phase 1: Position Your Product

The barriers you must overcome at the beginning of the sales process are either the prospect's total ignorance about your product, or the second-hand impressions picked up via the grapevine or the media. In either case, your first step is to articulate a strong, credible case for exactly what it is you have to offer.

This means you must develop a well-written, thorough and logical "proof statement" of precisely how your product works and what makes it different. The statement should not be built around the numbers you've achieved — too many people are still trying to make past performance the central focus of their sales effort — but, rather, it should detail the key points of your investment philosophy and what value that philosophy can be expected to add in the future. Only when this context is created does past performance become truly meaningful.

Many firms skip this critical step. They do so for a number of reasons:

  • Fully describing an investment philosophy takes work
  • Portfolio managers fear being pinned down
  • It is assumed that "the numbers speak for themselves"
  • The architects of the product often want to divorce themselves from the sales process

It is true that this phase could be safely bypassed in the early, relatively unsophisticated days of this business. But it's dangerous now: The institutional knowledge base has grown tremendously over the years and the information you provide must meet higher standards.

In committing the resources needed to produce a truly credible and sophisticated product story, a story that moves beyond what we call "plagiarized boilerplate," you will create an extremely powerful platform from which to launch a more efficient and effective sales effort.

Phase 2: Predispose the Gatekeeper

With a strong positioning statement in hand, the next challenge is to get the attention of the gatekeepers and bring them up to speed on your product. The objective at this phase is to get them "predisposed" toward you so that they can, in turn, sell the ultimate decision makers on giving you a hearing.

The role of the salesperson at this stage is primarily educational. You need to take the time to capture the gatekeeper's imagination with the logic of your concept, supporting it with ample evidence, including your positioning materials. This will provide real momentum to the sales process by making the gatekeepers so comfortable with your product that they can speak with real conviction.

A cautionary note: It is vital that this educational effort include a genuine two-way information exchange. Your well-thought-out positioning piece will provide an effective and impressive "primer" on your product. However, beyond this, it is also extremely important for the salesperson to elicit from the gatekeeper a complete understanding of the prospect's specific needs as well as what they consider to be the strengths and weaknesses of your product vis-à-vis those needs.

With this invaluable input, it is then possible to craft a well-targeted, client-driven presentation for "the committee."

Phase 3: Persuading the Committee

In presenting to the pension committee, it is important not to assume that you can simply repeat verbatim the presentation that sold the gatekeeper.

We all know few things are as fast-changing, or as complex, as the investment business. Prior to meeting with committee members, it is vital to confirm with the gatekeeper what the prospect's current concerns are, as well as their sophistication level, and adjust your presentation accordingly.

When you're in front of the committee, believability is the name of the game. You're now speaking directly with the people who carry the risk for choosing your firm and, given the traditional "beauty contest" approach with its line-up of short presentations, you must establish credibility in a highly compressed time frame.

The most effective way to do this is to focus on using your past results to demonstrate the tightness of your investment process. If you link your performance directly to the process - as well as explain how your portfolio managers drive the process - you will significantly reduce the probability of being eliminated.

In addition, leave no important questions unanswered: Questions not addressed give grounds for elimination. Again, the committee is trying to confirm that your investment process is essentially foolproof. If an issue constantly comes up in the Q&A, you need to rebuild your presentation.

Finally, don't go on "automatic" when you're in front of the committee. People do business with people. The committee members must not only like your logic, they must also get a strong sense of who you are and what you stand for, all in a very short period of time.

Be rehearsed. Be articulate. But also be yourself. It will win you more finals than any "canned" sales pitch.

Phase 4: Perpetuating the Sale

The sell cycle does not end when the contract is signed. In many ways, it just begins. The need to constantly reaffirm the viability of your investment process is crucial to continuing the relationship and adding cash flow.

A good client retention program is as much a part of the sales process as the initial selling effort. It goes beyond the old ritual of perfunctory client meetings, a bit of scrambling at each quarter's end to get the numbers out and "touch base" phone calls when something goes wrong.

Instead, an effective client retention effort combines education and full disclosure, utilizing timely, face-to-face meetings, regular, informative phone calls and quarterly letters and annual reviews that explain exactly how results were achieved. If you use every possible opportunity to reestablish client comfort and resell your investment process, you will earn the trust and respect necessary to perpetuate the sale.