Margolis Advisory Group, Inc. . Investment Management . Consulting . Sales » sales

The Optimal Sales Organization for an Asset Manager

Jeff Margolis — Tue, 16 Nov 2010 20:01:50 +0000

One of the questions most frequently asked of us is what the best structure is for a sales organization. The short answer is that there is no one best structure, but there are guidelines. In general, sales responsibilities should be client focused rather than product focused. This orientation encourages sales professionals to understand the goals of their clients and try to provide solutions for them, rather than trying to force products to fit a client’s portfolio. There are some special situations where products are extremely complex, requiring deep expertise to represent them. But even in these situations, in a multi-product firm, product focused sales individuals could clash with generalists.

Another dimension which is important to consider is whether the sales professionals should be organized by geography or distribution channel. Typically, small sales teams are organized geographically since there are not enough resources to specialize. However, the current environment is demanding more and more knowledge of each client’s specialized needs which is pushing organizations to specialize with their sales teams as much as possible. Since the financial crisis, investors have been looking for investment solutions to their problems rather than standard products. It is the task of the sales professional to thoroughly understand their client’s situation and marry their firm’s investment capabilities with them to formulate solutions.

Compensation for Institutional Sales

Jeff Margolis — Wed, 16 Jun 2010 18:01:50 +0000

The often active discussion around how to best compensate institutional asset management salespeople seems to have heated up even more recently, based on conversations we’ve had with managers and executive recruiters. Coming out of the crisis there is a keen focus on business growth. Managers have a sense of urgency around sales, and therefore want to compensate individuals heavily on near term sales.

While it is understandable that managers want to get their client growth back on track, it is always important to balance that need with sustainable longer term growth activity. Also, compensation systems for salespeople are not as simple as determining whether they should be commission based or objectives based. Many factors must be considered to properly balance short and long term goals. These include firm size and maturity, product menu, and the size, breadth and depth of the sales organization.

What is the Ideal Sales Structure?

Jeff Margolis — Mon, 28 Sep 2009 19:57:11 +0000

This is one of the most frequent questions I get from managers. Many managers look for an ideal sales structure. How should they organize sales vs. client relations; or, sales vs. consultant relations? Should they segment their sales force by client type or organize geographically? Where should product specialists report? How should the marketing and sales organization align with product development and management?

The answer to all of these questions is that it depends! There is no one ideal structure. If there were, all firms would have it. The best structure for a particular firm depends on: its market position; growth goals; existing client relationships; existing personnel; and investment capabilities. Designing and implementing the right structure will align the firm’s investment and marketing sides so that all personnel are synchronized and it’s brand in the marketplace is clear and strong.

Look for my new white paper coming out this week on building a premier marketing and sales organization.

Outsourcing in Marketing and Sales

Jeff Margolis — Mon, 07 Sep 2009 19:07:46 +0000

As investment firms react to the new post-crisis environment, one of the issues they will need to address is what they should outsource. I have no doubt that outsourcing will continue to increase in the industry as firms will be reluctant to staff up with full time help to the degree they have in the past, as managers will be cautious to increase their fixed costs.

In the sales area, the outsourced solution is third party marketing. These businesses should continue to serve small managers and alternatives firms, but whether their use with larger traditional firms becomes more popular is unclear.

I see the largest potential increase in outsourcing in the marketing area. There are now quality resources available on an outsourced basis in RFP production, data base population, all forms of writing and communications, presentation design, website design, and various other elements of the marketing process. Managers should consider these variable cost solutions to their marketing needs carefully before restaffing with full time employees.

Why Can’t I Sell More (2) ?

Jeff Margolis — Thu, 13 Aug 2009 17:18:45 +0000

Last month, I posted some thoughts on this subject. Since then, I have continued to get numerous questions on this topic so I decided to expand on my thoughts. Many managers seem to be seeking training for their sales people. When I’m asked about that, I try to get underneath what they are really asking. Often it turns out that they are looking for solutions for a perceived lack of sales results. Training sales people seems logical, but it may not make sense if the problem with sales lies elsewhere. Further, standardized training is just that, standardized. It doesn’t seek to find the underlying problem. There are many possible issues ranging from firm and product positioning through general marketing to various elements of the sales process. When asked to help specifically in sales training, I seek to understand the entire sales process that the firm uses and find the weak points. These weaknesses may include sales presentation skills often addressed in standardized training, but frequently the problems are more complex and require more thoughtful solutions.

The Sales/Service Continuum

Jeff Margolis — Wed, 22 Jul 2009 15:05:57 +0000

One of the issues that institutional asset managers ask me the most about is their sales/service model. Should sales people also manage client relationships? Isn’t it a different skill set? Shouldn’t the best sales people be constantly looking for new clients in order to grow the business while others nurture existing relationships? The answer I most often give is that in the institutional business, sales and service are not distinct, but rather occupy different points on a continuum. In this business, sales is all about long term relationship building where the sales person gains credibility over time with the potential client. Service is about long term relationship strengthening where the client receives frequent value added communications and hopefully adds more assets in both existing accounts and cross sold products. Some professionals are better at bringing in new clients while others are better at servicing existing clients, and perhaps cross selling. Their respective responsibilities should align with their strengths. But organizations should be careful about drawing more of a functional distinction between sales and servicing than exists in practice.

Why Can’t I Sell More?

Jeff Margolis — Tue, 07 Jul 2009 21:49:56 +0000

Why can’t I sell more? When I talk to managers, I get this question all the time. To some, it seems that it should be simple. Develop a good investment product, hire some talented sales resources with contacts, and off you go. The truth, of course, is that there is much more to it than that. Most managers don’t realize how competitive the business is. For the majority of asset classes, there are many strong managers. In order to compete effectively, a manager must clearly differentiate its products and capabilities, and promote them through a well crafted marketing plan. Over time, this will generate “demand pull.” Then, talented sales resources can be more successful. Otherwise, they can spin their wheels and management can waste a lot of time and money. In the best of cases, patience is required as it takes time to build a client base. Look for my next white paper coming out this summer which touches on much of this.