You’re hiking through the woods and hear a loud crack of a branch breaking ahead of you. You see an enormous bear emerge from behind a tree. You stop and stare. The bear stops and looks through your soul. It’s ready to attack.
You’re not sure what kind of bear it is. If it’s a mother grizzly defending her cubs, then playing dead might save your life. But what if it’s a hungry black bear? Fighting for your life is said to be the smarter response.
Knowing which fight or flight response to employ could save your life.
And so it is with your business in 2020. Is the pandemic and recession we’re all facing a grizzly or a black bear? Are you cutting costs, postponing campaigns and cancelling investments? Or are you adjusting your strategies, changing your product offering and investing in your brand’s future?
We see companies doing both. And we’re worried about those that are doing the former. Evidence from past recessions is that the companies who invest, pivot and commit during a recession come out the other side in far better shape than those that retract, consolidate and wait.
Harvard professor John Quelch wrote the must-read “Marketing your way through a Recession” in 2008. It contained eight factors he saw as important for companies navigating the recession of 2008-09. These included ideas like: research the customer (are they changing), maintain marketing spend, adjust product portfolios (market the right funds), support distributors, adjust prices (perhaps only temporarily), and emphasis core values.
A subsequent piece in the Harvard Business Review, How to market in a downturn, elaborated on the theory and contained a series of fantastic real-life examples of companies that refused to play dead and came out on top. It’s well worth a read.
Not convinced yet?
Are you under such pressure to cut costs that you just have to reduce marketing spend?
If so, then the decision is what should you cut? Surely not client communication? Put yourself in their shoes. They’re receiving quarterly fund commentaries and statements showing the value of their pensions and investments down by 20-30% in just a few weeks. Meanwhile, all the news reports are about the impact of this horrific pandemic, not just on people’s health but on their wealth and their job prospects.
People are terrified. And with good reason. They see an aggressive black bear heading straight for them, teeth bared and eyes focused on them.
So now is not the time to be reducing client communications. In my view, it’s time to OVERcommunicate. You need to retain your customers, retain their assets on your balance sheet, and retain their trust in you and their confidence to invest again when they start to see things improving.
I saw this in 2008/09, when the financial community slashed costs during the financial crisis. Many cut too deep and had to backtrack quickly to make sure their client base didn’t walk out the door.
So my personal plea to the financial community is this: don’t stop communicating with your customers – they need you more than ever. And it’s the right thing to do for the future success of your business.
What can fund managers do now?
If you’re convinced by now that ‘doing nothing’ isn’t the right strategy, then what tactics might you employ? Here’s a few ideas:
1. Offer solutions. If they aren’t already, people are going to get tired of hearing another expert’s views on how Covid-19 is going to affect the economy and markets. Everyone is doing this, so don’t just add to the noise. If your communication doesn’t have a purposeful call to action for the reader, then it has no point! Draw a straight line from your insight to a client solution that you offer.
2. Build goodwill. Everyone is stressed, working from home while toddlers climb all over them. As an industry, we need to show empathy for our clients. Let’s try and understand their pain points and address these. Simple things matter, like answering emails within 24 hours (and not ignoring them altogether, which we see happening). Manners and respect are a basic starting point for building trust and relationships. Once we master the basics, we can then start to build rapport with people: think of building partnerships and be less transactional.
3. Less is more. As an industry, we’re guilty of pumping out content into the ether. Sometimes it feels like it’s a race to publish more stuff. So although I’ve argued earlier that it’s a good time to over-communicate, that doesn’t mean carpet-bombing clients and prospects. No, we need to be more tactical and communicate better and with more thought. Which brings me to a bugbear of mine:
4. Follow up properly. Not only do we churn out forest-fulls of paper every day, but we don’t then follow up adequately with our readers. So instead of sending out 50 marketing emails this month, let’s do five – but then with that extra time and resource, let’s build a proper follow up campaign with our readers, integrating sales and marketing activities to get our message through to the market. And maybe generate some sales leads.
5. Pivot on the 4 Ps. I’m showing my age here, but I learned the four Ps when I was studying marketing (product, price, promotion and place (distribution)). We need to pivot because the world has changed, perhaps permanently. So we need to change the products we promote (lower risk funds in vogue now), how we promote them (surely digital is going to pick up even more), how we price them (fee cuts or temporary price promotions), and how we distribute (perhaps marketing channels will have more success than sales teams in this world of remote working). But before we all go pivoting, let’s think about the fifth P: people. Let’s research our clients and find out what they really want, how their behaviour is changing and then work out what we can do to support them.
6. Build brand. Most fund managers have always been weak at brand building. Any brand awareness study shows that if you ask consumers for fund manager brand names without prompting them (have you heard of Acme Fund Managers?) then the recall rates are very low for all but the best ‘direct to consumer’ brands.
Oh, but we’re an institutional brand, I hear you cry. Perhaps, but every penny you manage for a pension fund belongs to an individual somewhere down the end of the line. There may be consultants, trustees, wealth managers and advisers in the way, but the ultimate owner is a human. And that person is on furlough, or can’t retire this year because their fund is down 20%, or has sick family members, or has a small business that can’t pay its bills. So they’re looking at us and thinking, do you care?
I’m writing this, just as I expect you are reading it, from home. When I’m finished checking over my draft one final time, I’m going to take my dog Lexi for a walk in the forest behind our house in Scotland. There have been no bears here for a thousand years or more. But as I walk through the woods and hear a crack of a twig, I’m going to think about what might come round the corner at me – and how I’m going to react. What would you do? What are you going to do? Fight? Or flight?