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Institutional Client Prospecting and Pitching

Institutional Client Prospecting and Pitching. Catrina Arbuckle, Mercer Investment Consulting Philip Robinson, Investit February 1 2006. Institutional Client Prospecting and Pitching Cycle. from Long List RFP to winning final presentation. New business conversion rates.

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Institutional Client Prospecting and Pitching

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  1. Institutional Client Prospecting and Pitching Catrina Arbuckle, Mercer Investment Consulting Philip Robinson, Investit February 1 2006

  2. Institutional Client Prospecting and Pitching Cycle

  3. from Long List RFP to winning final presentation New business conversion rates Onto RFP long list without consultant endorsement 18% Picked a winner without consultant steer 25% RFP long list to short list 35% * Presentation on the day critical 75% 83% Consultant influence * Significantly dependent upon type of mandate Investit research: Over 100 respondents interviewed during 2005, representing over £100bn of pensions assets Consultant influence important. Presentation on the day critical

  4. New business conversion rates 70% RFP long list to win - Gold RFP long list to win - Silver 45% RFP long list to win - Average 27% RFP long list to win - Poor 14% Investit research: Over 100 respondents interviewed during 2005, representing over £100bn of pensions assets Need for evidence on hit rates and decisions on where improvements can be made

  5. Responses Importance of RFPs • “…the RFP is rarely if ever a deal breaker… ” • “…we will not put a manager onto the short list if they miss the long list RFP deadline..” • “…in any RFP there are usually between six and ten questions that are investment specific and bespoke. These are the ones that need highlighting and where the best brains need to consider the issues thoroughly… ” • “… nothing annoys a consultant more than a manager not answering the question. It’s a bit like the A level teacher going on about it – answer the question posed and not the question you would like to answer…” • “… RFP people are generally unloved in the industry and to get good ones is rare. Keep telling them they are good, that they had a role in new business wins, and that their writing skills are respected. Feedback is all for motivation…’ Manager research views dominate. RFPs hopefully verify these

  6. Strengths Easily read Informative when opinion is solicited Clearly stock selection driven Clearly collegiate approach Weaknesses Philosophy is not spelt out What is the global research platform and how does it matter? Too modest about valuation skills Approach to risk unclear The credentials of new CIO and COO are swamped by the loss of predecessors Explaining interaction of team and specialists Claims benefits of membership of parent group with no evidence of gain Property RFP A real benchmarking example

  7. Once on the long list – leave the short listing decision to consultant! Would pension respondent accept calls before short listing Would consultant accept calls before short listing It’s the 80/20 rule – better to leave well alone

  8. Pre-pitch calls • What the pre-pitch calls need to ascertain (in order of respondent perceived importance): • Areas of specific interest to trustee decision makers • Who to represent the client and their motivations • Timing of the meeting (steer on actual presentation time and Q&A) • Seniority, calibre and number of people expected to present from manager (fund manager, client relationship, senior person) • Likely questions to be posed Pre-pitch calls important for establishing pre-pitch rapport and empathy

  9. Pre-Pitching.Who to make the calls? Who to undertake pre-pitch Up to 20 minutes. Someone with relationship and/or investment articulate

  10. Presentation – PETE’s law Passion We want you Enthusiasm We love what we do Tailored We have thought about you Example Tell stock stories 75% of the decision down to presentation on the day

  11. Presentation protocol – what the best are doing • Rehearse, rehearse, rehearse • Ensure presenting team chemistry • Off copy, whites of the eyes • Tailoring with specific examples – display empathy • Team work from RFP to final presentation – engage investment experts • Less is more – fewer slides • 1 main point per slide • Careful on technology • Aural not visual audience • Client tailoring (an IT brand company differs from public sector)

  12. Top presentation tips (as given by two consultants) Six to 10 pages if possible. Marketing people to spot train spotters!

  13. Post pitch • Record keeping on who contacted and how effective an exchange • Client Relationship Management (CRM) systems and inputting • Assessment of effectiveness throughout the Client Prospecting and Pitching Cycle • Immediate and ‘cool down’ debrief’ from prospect and consultant The dignity of failure. Best not to go into denial and instead learn from experience

  14. The consultant’s view Finals Presentations Client Expectations • That the consultant has briefed you with their requirements • That you will provide stats/RFPs/requested information to deadline • That they will meet the person that they will work with i.e. the CRM • That they will also meet an investment bod be it Investment Specialist or Fund Manager • That the performance stats in your presentation will resemble stats shown to them by the consultant • That the consultant will prep them with appropriate questions to ask • That you want their business

  15. The consultant’s view Things that work • Understanding the parent company and the personalities in the Trustee Group • Tailoring the CRM and presentation accordingly • Understanding how the group will come to a decision • Being subtle if using your background knowledge of the client/group • Knowing how many candidates have been short listed and where you are in the agenda • Being honest (no really !!) and avoiding spin • No-one ever lost a pitch because they were too brief (Bill Muysken – Mercer Global Head of Research)

  16. The consultant’s view Things that don’t work • Bad time management • Not reading the audience • Introducing yourself to someone from your own organisation • Sending techies unless appropriate • Sending “salesmen” unless appropriate • Jokes or gimmicks unless you really think you know your audience • Slating the competition in your presentation • Turning up to the wrong venue • Botching the Trustees arrival at your offices • Annoying the consultant pre-presentation

  17. Research findings Market move to preferred manager choice • Trying to streamline the manager selection process at some consultants: • Traditional approach - Used about 60% of the time. Long list dialogue and move to short list and final beauty parade • Local authorities – competitive tender behaviour as enshrined by European law • Short listing only – Used about 25% of the time • Preferred manager choice – c20% of time at one consultant. Most efficient as less time. Also most expensive Distribution changing. Meetings/RFPs more qual than quant

  18. Institutional Client Prospecting and Pitching Cycle

  19. Questions

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