Unhappy with the ROI on your DistroTech Spend?
Historically, the Investments side of the asset manager’s house received the lion’s share of capital investments. But over the past 5-7 years Distribution, which we define as Sales, Marketing, and Servicing, has gotten its fair share. Alas, the ROI has too often been elusive. Do the following scenarios sound familiar?
Asset managers have spent millions on implementing CRMs. Somehow, both the institutional and retail sales teams complain that it doesn’t accurately reflect their definition of client, and thus, adoption has been disappointing.
Despite the hockey stick growth in Asset Managers’ third-party sales & marketing data spend, there are not enough demonstrable successes in transforming it into actionable insights to guide go-to-market strategies.
Or, simply, your firm may have multiple well-known client communication and sales enablement tools that are capable of producing good-looking content but are still dissatisfied with the results – whether the report turnaround time is too slow, the underlying data is not fully trusted, or both.
Why has ROI been elusive, and how do we change the dynamic?
Unaligned Siloed Technology Investments Are Holding You Back
Siloed investments are partly to blame. As opposed to solutioning across the client journey, a narrow approach with limited scope leads to underutilization of your DistroTech components and unoptimized processes.
There also has been a bit of a skill and experience gap. The Distribution function and those that support it don’t have a long history of delivering strategic technology projects. There’s simply vastly more experience in the industry with things like security masters than there is with data-driven client segmentation models.
Most importantly, too often, investments are triggered without full consideration of what business goal is being addressed, and, even when it is, there hasn’t been an appreciation of the numerous moving parts — applications, data, processes, accessibility, and change management — that must be orchestrated to truly move the needle.
A New Way Forward – Introducing Distribution Architecture
The Investments side of the house is comfortable with concepts like operating models, business capability maps, and architectures, which has helped guide large transformation efforts. Distribution, sales enablement, marketing, and relationship management somewhat lack that experience.
Olmstead defines your Distribution Architecture as the systems, data, and processes that come together to enable your distribution goals. In its simplest form, it links your corporate and distribution goals with your business capabilities (i.e., the things you need to be great at), in turn, informing how your data and tech stack can be leveraged and changed to best support those business goals.
This construct leads to the following questions being contemplated:
- How can we better exploit existing systems we already have in-house?
- Are my systems properly integrated to deliver a clean and powerful workflow?
- Are my data assets aggregated, trusted, and accessible? And do we have the tools to exploit this data?
- Are there opportunities to simplify my environment through consolidation or retirement?
- Do I have the appropriate ownership in place for my distribution technology and data investments?
- Is it clear what the desired outcomes are for a particular investment, and can we measure progress toward the end goal?
How Strong Distribution Architecture Improves ROI
Let me illustrate how our Distribution Architecture Framework is leveraged to connect business goals with DistroTech investments.
GOAL: our client had a stated 3-year revenue growth objective, and increasing wallet share of sales from existing clients was identified as a key driver
BUSINESS CAPABILITY: improving cross-selling capabilities was identified as paramount
ASSESSMENT: our assessment highlighted 1) the need for richer client segmentation to better match products with investor needs, 2) fundamental gaps in existing client insights – products, profitability, and satisfaction, 3) and strategic uptake of Salesforce was lacking for the sellers
POTENTIAL CROSS-SELLING INVESTMENTS: to improve cross-selling results, the rationale was developed for a) client and product master data solutions, b) aggregation of internal and 3rd party data in a distribution data warehouse, c) a BI competency to exploit the trusted data, d) build vs. buy client segmentation solution analysis, and e) integrating sales enablement tools to display actionable information in the CRM
SHARE-OF-WALLET ROADMAP: in addition to the cross-selling use case, we used our Distribution Architecture Framework to analyze additional relevant use cases including those related to product management and client retention, and then the overall investment priorities and roadmap to support the share-of-wallet objective was derived
Achieving your goals is rarely about one application or data set. Rather it is typically the combination of data readiness, exploiting current (or new) systems capabilities, and optimizing distribution workflows. Embracing a Distribution Architecture approach provides a path to improving the ROI on DistroTech investments.
Read our distribution architecture case study