How To Run A Data-Driven Fundraising Campaign
For anyone who has set out to raise money for a hedge fund it can be a slog to say the least. It’s an inefficient process at best: dialing for dollars, shuffling from conference to conference, and constantly tweaking marketing decks that look the same as everyone else’s.
While analog relationships and regular entertaining might have been effective in a different era, today’s intense competition and tighter allocations means marketers cannot afford to waste valuable time on uninterested prospects and dead leads.
So how can a hopeful marketer stand out? Like every other business these days, with data.
Thinking Along A Communication Continuum
Leading tech companies like Amazon track every interaction with their customers, from the moment they open an account to the most recent purchase. They track every engagement customers have with their platforms and use AI and machine learning to predict what they will want next. This level of consistent digital engagement – whether customers are in the market for a product or not – has led to record breaking success for a handful of companies. Hedge funds now can – and should – do the same.
In a rapidly changing digital age, fund managers must view fundraising and investor relations processes along a digital communication continuum: the left tail is the first piece of content emailed out to a contact list, while the right tail is posting relevant documentation to a private data room.
In between there will be many touch points on which fund marketers can collect engagement data, ultimately deciding with which audiences to best spend his or her time. While sales cycles in hedge funds are longer than in the consumer example above, the principle of sustained engagement to obtain allocations remains.
Step 1: “What Do I Say?”
Given the advertising restrictions on hedge funds, educational thought leadership and content marketing have been tried and true methods for fundraising success. Survey after survey shows that allocators respond well to such efforts, whether it be a white paper, video or blog post.
But in order to do thought leadership, you have to have a thought.
Whatever those thoughts are – the direction of the macroeconomy, the future of interest rates, etc… – firms must decide how they want to communicate them in a constructive way. Knowing what the most popular topics are in advance, as well as tidbits like ideal headline words and article length – which access to the right data set can provide – can help save time when creating content.
That said, rarely does an allocator say “You’re so brilliant, here’s $50 million!” after reading one white paper. Sustained communication with compelling insights will keep prospects and clients engaged over time.
Step 2: “Where Do I Say It?”
Now that the paper is written or video produced, it has to be distributed to its target audience at scale. While email is still the dominant form of distribution, keeping up one’s mailing list is an arduous task with people changing jobs so frequently. Thus it behooves marketers to post their content on a digital platform where investors are already spending their time.
Once the content gets posted, the follow-up data will soon determine who viewed it and cared about it. If after several months the data reveals that certain audiences – endowments and foundations, for example – are drawn to your content while others are not, that is valuable insight to bake into future marketing plans.
Step 3: “Yes! They’re Interested!”
In a best-case scenario, the persistent campaign to raise awareness about a new firm or fund is beginning to pay off, and now investors are starting to ask for more information. Given all the nuances around compliance, the platform used for content discovery should also have a mechanism to ensure that the interested party is an accredited investor or qualified purchaser. While the content might have been posted to a public platform, any pre-investment due diligence or confidential information should live behind a private portal, preferably on the same user interface.
Along the way, the fund marketer will have collected data on what these prospects have viewed and therefore what they are interested in. Using those insights to cater to their needs will only strengthen trust further before a check is even written.
Step 4: “Here’s How We Did Last Month”
Great news! The investor has been sold on the product or solution backed by your content campaign. Now comes the hard part: customer service.
Asset allocators are Amazon-conditioned consumers like everyone else, and they have come to expect a seamless user experience. They will no longer tolerate clunky data rooms that are hard to navigate and not mobile-friendly.
Putting your thoughts out there and tracking investor interest through data is what got investors in the door, and that’s what will keep them in the door. It’s likely that a client’s needs will change over time, and tracking additional interests and activity behind the investor login screen will help an IR staff anticipate those changes.
The hedge fund industry has profited over time by taking advantage of new technologies and developments in the global economy. The irony is that many have been reluctant to change in terms of how they run their business day to day.
In a hyper-connected, increasingly transparent world, investors expect more information more frequently. At the same time, firms should be measuring the impact and ROI of their marketing efforts more closely, and using proprietary data to better serve their customers.
Digital tools that consumer-facing companies have been using for years are now available to hedge funds. In a world where the fight for every marginal investor dollar is fierce, the best customer experience will determine the winners.
© The Sortino Group Ltd
All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or scanning or otherwise, except under the terms of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency or other Reprographic Rights Organisation, without the written permission of the publisher. For more information about reprints from AlphaWeek, click here.