The Investor Journey and Why it Matters (Part II)
Once you have a glimpse into what it’s like to walk in your investor’s shoes, you are in position to make it a real productive and engaging experience. And in an over-crowded industry where products are most often ”bought not sold,” this matters…a lot.
The stages of the Investor Journey are basically the same as the Client Journey in any other industry (with slightly different vernacular):
Awareness -> Engagement -> Diligence -> Investment -> Investor Relations -> Advocacy
In the simplest terms, the goal of each stage is merely to just get to the next stage. And as my colleague, Matthew Craig-Greene would add – to do it with as much momentum and as little friction, as possible.
Although there are dozens of things an investor will ultimately need to know in order to make an allocation decision. When it come mapping the journey, though, the focus should be on just 2-4 of those at most that an investor absolutely, positively needs to know at a given stage in order to propel the process forward.
People have a limited capacity to absorb information – so if it isn’t properly layered, it’s unlikely to be impactful. Just as they say the best way to eat an elephant is one bite at a time…information works the same way. Give them too much and you might as well just give them nothing.
Awareness
If you leave it to chance, you an investor really may never hear of you until it’s too late. All things being equal – you want to be on their radar and top of mind before they are ready – and be invited into the process when they are ready to allocate to your strategy bucket.
So…how easy are you making it for them to find you? And what exactly do they find that would influence their thinking about you when they do?
To be clear – I am not talking just about the objective “must-have” criteria and performance that they will find in a database search. You are what you are and there isn’t much you can do to change that. I’m talking about the “must-haves” around your story. Awareness isn’t just about jumping up and down to be sure you are seen – it’s about making sure you are being valued and remembered.
It doesn’t matter whether they hit you through a data search (which leads them to your website, LinkedIn, or a Google search) – or they come across you through a placement agent, a conference, or just stumble across one of your thought pieces – you are in complete control of shaping that interaction.
Remember…everyone has a “story” – a story that is mostly made-up by someone. The question is…who made-up your story – you or the market?
Engagement
This isn’t just about what you say in the meeting. It’s about what they know – and their level of enthusiasm – in preparation for that meeting. And the only way to get them “primed” and interested walking into the room is by finding an impactful way to demonstrate the potential fit before they get there.
Again – what they see and how well it represents your brand and value proposition is in your control.
The internet makes it incredibly easy to shape the narrative and nurture a relationship. You can stay under the radar because unevolved tradition has dictated that approach – or you can own the process – like you own every other aspect of your business.
Diligence and Investment
The most important thing to manage through diligence and subscription relates to the ease of the process and your level of thoroughness and responsiveness.
Since many allocators have their own individual needs or ways to sort information, having a complete data room ready to go is obviously a must. However, elegance and simplicity are elements that often go under-appreciated. Sure - it may be their ‘job’ to dig into your stuff…few people actually enjoy tediously rummaging through file after file of bland, text-heavy PDFs, and multi-tabbed spreadsheets pulled down out of another Intralinks room.
There’s no rule against making the process more engaging or interactive. You can choose to breath some life into the process by incorporating video, infographics, or digital material to reinforce certain messaging points. You might even do it simply to make the information easier to digest. Because when a given a choice between managers, people will always gravitate toward the one that is most interesting.
Investor Relations and Advocacy
I continuously scratch my head as to why so few managers under-invest in this process. It’s like the cable company that offers everyone else the new-customer discount and an entire team to ensure the phone is answered on the first ring while making the loyal customer sit on hold for 20 minutes after sifting through the automated phone tree.
This step is all about nurturing the relationship through on-going, transparent communication and personal service. Investing in the LP relationship really doesn’t cost much but the return can be quite meaningful. It could come in the form of a follow-on investment (even if there are higher performing alternatives) or just a head’s up that they are contemplating a redemption, providing you a shot to talk through it.
But when the process is managed really well – particularly in context of the overall experience – that’s what ultimately turns a client into more than “just another LP,” but rather…your advocate.
