Telling the Story Behind the Numbers: Communicating Quantitative Strategies Effectively

Posted by: Sean Mogle in: Financial Services -

For investment firms looking to sell their expertise, a successful pitch ultimately boils down to the numbers: whoever can offer the best performance at the lowest price should, in theory, win the business. Of course, in practice, it does not always happen this way – for a variety of reasons. One area where some buy-side firms tend to slip up (especially those involved in complex, quantitative-driven strategies, aka “quants”) is failing to have a cohesive, credible story behind the numbers. No matter how sophisticated the underlying models and methodologies, no matter how impressive the technology or how rapid the calculations, clients are, above all else, investing in a story. If the story doesn’t resonate, they will put their money elsewhere. From a marketing perspective, here are three lessons that can be applied in telling a firm’s stories.

The Power of Personality

As in any sales effort, personality counts for a lot. People want to know the who behind the product, sophisticated as it may be. An investment firm selling highly technical, quantitative expertise should incorporate meaningful messaging about the firm and its people (beyond a numerical performance record) into its marketing efforts. For example, is there a compelling narrative behind the firm’s origins? Does the founder or fund manager have an interesting career trajectory, skill set or driving passion that could relate back to the types of products the firm offers? These are the kinds of narratives that can be woven into sales messaging and reinforced by external PR efforts such as CEO/manager profiles and/or stories about the firm placed in top-tier financial media. Executive visibility initiatives, which might include securing speaking opportunities at major industry conferences and events, are another way quantitative firms can put a human face on their strategies, which may help boost both leads and sales.

Don’t Oversell the Tech

Related to the need to humanize the sales process, quant shops also tend to rely too heavily on technological superiority as their main point of differentiation. When everyone is affirming that theirs is the fastest, cheapest and most assured way of achieving performance, the message loses some of its punch. This is especially true for tech-driven strategies, which can be exceedingly difficult to communicate and even more difficult to understand. That’s not to say firms should not tout their innovation; they should. It must be clear, however, how the technology fits into the bigger performance picture. In other words, the tech story, if there is one, should be strong enough to pass the “so what?” test. Achieving meaningful visibility for a firm’s product/tech story can be a helpful component of a broader PR program.

Lead the Dialogue – Thought Leadership

Cultivating a positive reputation in the industry is a critical part of the sales and marketing process for quantitative-focused firms. “Reputation in the industry” in this sense means having name recognition among members of more general business audiences, who, though less familiar with technical jargon, are nonetheless influential in disseminating messages and information about brands to key decision-makers. To reach these audiences – and by extension, other, more core audiences – firms should maintain consistent visibility around topics relating to their expertise. This will not only highlight the depth and breadth of the firms’ expertise but also help position these firms and their executives as trusted authorities in the industry. Thought leadership tactics, such as branded opinion surveys, white papers, reactive statements and news advisories, can help quant firms maintain a steady drumbeat of communication and coverage. Another increasingly common channel for thought leadership among quantitative firms is the simple blog. A blog allows a firm the opportunity to highlight its technical qualifications without being constrained by word counts and audience sophistication. Blog posts can then be shortened and repurposed for both social and traditional media.

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