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scallops

British celebrity chef Nick Nairn bought a restaurant in our village. Within a few days, my wife Sam noticed they’d taken her favourite scallop dish off the menu. She was upset and started grumbling about what other ‘changes’ might be made to her favourite eatery.

I later bumped into the alliteratively named chef and asked him why he’d decided to annoy Mrs Hunter.

“I know they’re popular. But scallop prices have gone up a lot and we just can’t make any money without raising the menu price too high,” he replied.

With that simple explanation, the esteemed Mr Nairn had given some context (the ‘why’) to the decision (the ‘what’). As a result, Mrs Hunter was largely appeased.

What on earth, you may ask, connects rising scallop prices to investment marketing. Good question. Let’s consider what happens when the next economic downturn blows the froth off markets.

Customers need to know why scallop prices are up…or markets are down

Take this highly conceivable scenario. Two asset management firms have global equity strategies, each with £5 billion in assets. One month, the MSCI world equity index falls 7%. Meanwhile, each of the strategies underperforms the index by 3%. Clients have lost 10% of their wealth in 20 trading days.

One manager has a longstanding customer retention strategy, including regular monthly commentaries, occasional videos, manager interviews, and factsheets that include comments on what’s happening and why the manager is making certain decisions.

The other manager stopped producing monthly reports because they were “too expensive to produce”. They also took comments off their factsheets because it “slowed down the production process” (because the sales manager wants to get their factsheets out the day before his closest rival). They now have to rush out a panic email from the manager. And then they follow up with a ‘retention’ campaign, which will inevitably take a couple of weeks to plan and execute.

Which strategy is likely to retain most assets? Obvious, right.

Which asset manager is going to have spent the most money on client retention? I reckon there wouldn’t be much difference.

Build value and retain assets. Simple.

“No-one reads the reports,” we hear. That may be true when all is well, markets are frothy and relative returns are tickety-boo. But have you forgotten 2009? And 2001? And 1998? Sadly, I’m old enough to have written copy during those periods.

When the economy goes bad, when markets fall, and customers have lost money, they want to know why. If Mrs Hunter can get bent out of shape when the price of scallops goes up without any context, then imagine the conversations across Middle England when the Jones’s pension funds have fallen from £600k to £540k in a month.

So what’s the answer?

Overcommunicate to build trust and authenticity

If you’re not communicating, you’re not building up trust and loyalty. So when things go bad, you’ve got no ‘emotional capital’ built up with clients. Build a shelter when the sun is shining and slowly create trust.

What’s more, it’s a far more authentic strategy to communicate every month instead of just when you’re panicking (and clients then know you’re panicking. If they’re writing to me, it must be bad; in fact, it must be time to sell).

Show you care about your customers every month (report), every week (blog), every day (tweet), and not just when the metaphorical fan gets splattered.

6 tactics to authentically build trust and value

Here’s six ideas you can use to build a shelter ahead of the next financial storm. To me, this is an investment in your business, not an expense on it.

1. Build an authentic connection with investors

Yes, that means consumers too, not just advisers, consultants and institutions. Authenticity means not just communicating with people when you want something from them; it means being a consistent voice that reassures them to take the journey with you.

But authenticity comes from more than just regular communication. It also involves what you say and how you say it. Speaking as a corporate voice (“ABC Asset Managers believe that…”) is remote, detached and formal; a company can’t believe anything. In contrast, “We believe that…” allows you to be personal, informal, and human. People trust in people.

Take that to the next level and build that connection through a more relaxed tone of voice, through video, through podcasting; in other words, in whichever way your customers want to engage with you. Test and learn.

2. Build trust and loyalty through storytelling

Storytelling has been the primary means of communication since we lived in caves and chased goats with cudgels. Google the key words customer stories or client stories. Scroll through the pages and you’ll see dozens of companies telling stories about how they’re helping their customers. Yes, even B2B companies are doing it. Interestingly, though, virtually no asset management companies are represented. Hmmm.

3. Develop an employee advocacy strategy

This does not mean creating a star manager culture. Build a star team culture. Allow individuals from all areas of your business to tell their stories. Here’s a great example from Dimensional. And there’s this from Oracle; their people are front and centre in their careers site.

Imagine taking this to the next level and having your credit team all contributing to the content about your firm and its fixed income strategy. Think of the brand equity you’re embedding with clients and customers as they get to know the people, process, analysis and insights behind the investment strategy.

4. Consider a gated-content strategy

Give away as much content as you can for free. But take a look at how other service companies build the resources sections in their websites. For example, these guys have a hierarchy of content with ebooks requiring an email address to download. Imagine doing for your latest white paper on “why private debt is the next big thing for consumers’ portfolios”. Capturing data enables you to drive more targeted content at readers that have shown an interest in that area.

5. Be consistent

I hinted at this earlier. Develop a content calendar and stick to it through thick and thin.

For example, publish a monthly commentary on how each strategy is doing, why certain stocks did well and badly, what you’re buying and selling (and why), and why you’ve adopted a certain strategy.

Then, produce a weekly blog/vlog/podcast (or a combination of the three) that gives an informal insight into your firm, strategy, team, investments and so on.

And finally, produce daily content (three to five tweets/LinkedIn messages) that uses the best of your monthly and weekly content to drive traffic, engagement and loyalty.

6. Measure it

Is it working? Look at website engagement data using your analytics tools. With gated content, you can measure the performance of your inbound marketing campaigns on your CRM system. Measure it. Learn. Change it. Go again.

Will these ideas stop assets from leaving your firm when the next crisis hits markets? No, not completely. But think back to the scallops. Giving your customers some context about why things are happening and giving them a warm glow about your brand will mean that they’ll at least think twice; in other words, you can make it emotionally harder for them to leave if they like you. And just like Nick Nairn’s new restaurant, that’s got to be good for your company’s bottom line.

Ross Hunter

Ross founded Copylab in 2005 and is now leading the team in the UK and leading the company’s charge into new markets.