The CEO marketing challenge
Jean-François Hirschel
Marketing is expected to define the asset manager's unique identity, differentiate it in the marketplace in a way that connects with the needs of the client. To win a battle, you need a strategy, a tactic and soldiers to fight on the ground. The company's management sets the strategy, the sales force fights the battle, while marketing is that layer in the middle that defines and implements the tactics.
This role is becoming increasingly important in the context of several market trends:
1/ An increasingly competitive industry with pressure on margins. Unlike 10 to 15 years ago, you can't succeed by launching yet another "me too" product. You need to focus your time, energy and resources on what you are really good at and what is relevant to your customers.
2/ This is even more true for active managers, who need to prove their added value over passive managers, including justifying their fees.
3/ Marketing has a role to play in making responsible investment (a word that shouldn't exist because there shouldn't be irresponsible investment anyway) a seamless and harmonious part of an asset manager's identity.
Because asset management is a relatively young industry, marketing is still in middle age compared to some other sectors. The CEOs on the panel would look to the luxury sector for inspiration on positioning and differentiation. The asset management industry needs to sing and dance to inspire, rather than throwing numbers and charts at clients. The retail consumer goods sector could also be a good role model for its ability to reach the right customer at the right time.
Technological developments and the availability of data offer huge opportunities for marketing. It is a way to understand the customers better, to reach them more easily and to measure results and adjust strategy tactically. This is an improvement, as marketing has been severely lacking in metrics to measure its progress. It also paves the way for better personalisation of products, messages and, more broadly, customer interactions.
Digital marketing is now a must. But the CEOs on the panel believe the industry is taking baby steps in this area.
Technology is also a source of productivity gains, especially with the availability of generative AI. Content production is seen as an immediate application. Customer reporting is another, where, interestingly, productivity and personalisation could meet. The concept of "AI ambassadors" has been introduced by some of the organisations represented on the panel. The ambassadors sit in different teams and educate their colleagues about the myriads of opportunities that AI offers, as well as its limitations. This is the concept of augmented AI: AI shouldn't be left on its own, it needs to be augmented by human intelligence.
So where does this leave us in terms of the skills an asset management marketer should have? Well, numbers-oriented and a good writer, tech savvy, solutions finder and rigorous, open to the world, curious, daring, process oriented and flexible, strategic and operational, and maybe a few other things. It is impossible to find all this in one person, so the magic lies in building a team of complementary profiles from different backgrounds.
As if that were not enough, you also need to ensure that the marketing and sales teams work together smoothly. It is good to have some tension, because something positive comes out of debates and challenges. But in the long run, the team needs to be aligned around some key business objectives. This is done through goal setting and appraisals. You should also be clear about the time horizon of these objectives. For example, building brand awareness is a very long-term goal for a marketer, much longer than business development goals for a salesperson.
Marketing is definitely on a mission. And this mission is becoming increasingly important to the success of asset managers. In addition to its inward-looking aspect of deeply understanding and expressing a firm's identity, it will increasingly need to understand the profound changes in our world and our societies in order to translate them into new products and adapted offerings. So the CEOs on this panel are prepared to allocate more budget to marketing. But... the fact is that margins are under pressure. This means that marketing, like every other activity in the asset management value chain, has to prove itself: demonstrate productivity gains, demonstrate value added, demonstrate its catalytic role in the success of an asset manager. It remains an incredibly exciting job at the nexus of an asset manager and society, at the intersection of data, process and emotion, with the ability to make a real impact.
