Every day, alternative investors share their current mandates with BHA research analysts. The reason? So BHA can help investors find managers that fit their requirements and help managers find investors that have mandates for their strategies. That is the essence of the BHA service: helping investors and managers find each other when there is a fit.
The alternative to BHA’s business model is the industry status quo: 20,000 managers buying investor contact lists and e-mailing everyone in the database without any knowledge of the prospects’ needs.
This is called spamming and investors hate it. On a slow week, the average institutional investor firm receives more than 100 unsolicited e-mails and phone calls about products that do not fit its current mandates.
This has some serious repercussions. It creates a lot of needless “noise” that prevents investors from finding managers they want to talk to and makes it hard for managers to reach investors they are a fit for. It forces investors to erect elaborate spam defenses. And it wastes everyone’s time and irritates and alienates investors.
Finally, and most important, it doesn’t work. Spamming is a cavalier marketing approach used by unprofessional and ignorant marketing and sales folks who don’t want to take the time or make the effort to learn how to market to their target audience.
Smart, professional marketers willingly do the necessary leg work. They research the types of investors that will invest in their products. They figure out ways to legitimately contact investors. And they protect their reputation and that of their firms by never doing anything that could be construed as spam. As a result, they have an inordinate amount of success.
It has been proven that to be successful in marketing and sales, the only thing that matters is “fit.” Does an investor have a mandate for your type of firm and strategy? If so, then there is a high probability of getting through to the investor. If there is no fit, there is virtually no chance. But should a marketer manage to get through, it will take a miracle to convince an investor to choose a long/short strategy when he or she is looking for an asset-backed lending fund.
Ask today’s gurus of sales and marketing the best way to approach prospects and they will say, first and foremost, it is all about fit. If you try and force a fit, the results will be disastrous. Second, spend time finding a fit by researching prospects and devising effective techniques that cut through the noise in the marketplace. Third, be in the game for the long haul. Earnestly build relationships based on mutual respect and mutual need.
