Posted October 4, 2017 by Lee Kowarski
Between DST’s Business Intelligence (BI) Roundtable last week and the On Course Advisors' CRM Forum event this week, I have spent a lot of time with the industry’s leading thinkers about data recently. My key takeaways from all of the presentations, panels, and roundtable discussions are three-fold.
The most fundamental message that I tried to convey in my keynote presentation last week was one that is slowly coming to fruition across the industry: data-driven insights will drive distribution strategy. This message was reinforced at our Distribution Summit, as well, with many Heads of Distribution acknowledging that data/BI now informs every aspect of distribution (from coverage models, to segmentation, to compensation, and more). This approach, however, is not universal. In fact, the majority of BI teams are underfunded and underappreciated, left to focus on reporting and tactical campaign support. I expect the firms that recognize the critical role of BI (and make the appropriate investments and organizational changes to support BI’s importance) will be able to distance themselves from the rest of the industry in the coming years.
Traditionally, firms have focused their territory design and segmentation approaches on a simplistic understanding of where their opportunity existed. “Opportunity” was viewed as all of the intermediary sales – the more, the better. Leading firms are recognizing they need to take a more sophisticated approach to targeting that takes the real opportunity into consideration, as well as their ability to influence the sale. A firm’s true opportunity is based on the specific buying habits of an advisor/team. If the firm’s products are not competitive regarding fee or performance, relative to the products used by that advisor/team, then there is likely not an opportunity to generate sales. At the same time, salespeople are not able to influence all advisors to sell their product. In fact, our research, in association with Horsesmouth, has found that only 36% of advisors directly control investment decisions for their clients, with the remainder outsourcing decision-making to other members of their team, home offices, and/or third parties. Some leading firms are already recognizing the importance of utilizing as many data sources as possible to identify true opportunity and “influence-ability”, enabling them to only cover the right advisors.
While the majority of firms have little or no efforts underway to measure the impact of specific sales and marketing initiatives, as discussed in prior research reports, there are some leading firms that are emphasizing measurement. In fact, these industry leaders are not only measuring what works with their existing distribution efforts, but they are undertaking an approach that extensively utilizes pilots, control groups, and other approaches to experiment with new approaches to distribution and determine what has the greatest impact. These pilot initiatives include various approaches to hybrid wholesaling, digital sales efforts, and more – all of which are carefully controlled and measured to see what works with what audience. A few of these firms are already investing in artificial intelligence and machine learning tools to help optimize sales and marketing efforts. Some of these new and innovative approaches will likely fail, but I would bet that the firms that are willing to experiment are going to be the winners in the long-term.
categories: business intelligence, distribution strategy, roundtable/events, sales and marketing alignment, wholesaler compensation
The views expressed in this publication are solely those of the author and do not necessarily reflect the position or policy of DST Systems, Inc. or its affiliates, subsidiaries, joint ventures, officers, directors, or management.