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Prioritizing Business Intelligence Initiatives
February 2, 2023 by Sarah Mahmoud, CFA
In our "How Should Your Business Intelligence Team Spend Their Time?" blog post, we wrote about the varied roles of Business Intelligence teams across firms and what functions BI teams spend their time on vs. outsourcing to third parties. Here, we look at the key initiatives that BI teams are focused on, how they prioritize those initiatives, and how those initiatives should be integrated into the firm.
When we asked BI teams at 20 asset management firms what their most important initiatives were in 2022, the top two initiatives named were “Advancing a current advisor segmentation model” and “Improving lead scoring.”
Segmentation models and lead scoring have always been important for distribution teams. The role and importance of these models, however, have become essential in recent years due to the widespread availability and usage of data leading to increased competition in the asset management industry, as well as the growing demands of financial advisors. With a proliferation of asset management products and firms vying for market share, financial advisors have more options to choose from and may be more discerning about the products and services they recommend to their clients. A well-crafted segmentation model can help the asset management distribution team understand the needs and preferences of its target audience and develop targeted marketing and sales strategies that are more likely to be successful.
A common challenge that organizations face is the adoption of segmentation and scoring models by the sales and marketing teams. We often see a segmentation led by the sales team that carves out advisors to be covered by the sales team while the marketing team has no input into the model or the resulting coverage. We also see segmentation models developed by marketing teams that deal with digital engagement and lead scoring, with little to no buy-in from the sales team. It is essential that a segmentation model is created and implemented with the experience of the advisor in mind and that it is adopted by the whole distribution organization (marketing included). This disconnect is not limited to segmentation models and lead scoring. We often see detrimental effects on the overall firm when teams are working in silos. Projects are often ad-hoc and stand-alone and don’t tie into a wider plan. The BI team can serve as a central resource and common hub due to the scope of data that they work with, covering all aspects of the different parts of the organization.
Other top BI initiatives dealt with guiding the customer life cycle, predictive modeling, automating digital engagement and workflow analytics, among others. Needless to say, the list is long and the initiatives complex. With limited BI resources, teams must be strategic and selective when identifying where and how they spend these resources to ensure that they will see the biggest benefit. They also need to ensure that the initiatives they prioritize will work together to ensure a payoff that is bigger than the sum of their parts. This is easier said than done, as the benefits of BI initiatives are often not easily measurable. However, we are seeing an increasing number of management teams tracking the return on BI initiatives through various KPIs. The proportion of teams whose efforts are either already tied to or will be tied to performance/ROI metrics has increased from ~49% in 2020 to 60% in 2022.
For example, the BI team might track metrics such as the accuracy of predictive recommendations or the sales lift resulting from the implementation of a new scoring model. The sales team might track metrics such as the number of new clients acquired or the growth of market share with key advisors. The marketing team might track metrics such as the number of leads generated from a marketing campaign informed by digital engagement or the conversion rate of leads to sales.
Tracking and communicating these KPIs can align the interests of BI, sales and marketing by providing a common set of metrics that evaluates the performance of the organization as a whole. When these metrics are transparent and shared across the organization, it establishes a link between the different teams and demonstrates how their combined efforts contribute to meeting the goals of the firm.
Learn more about SS&C’s Distribution Solutions offerings, which can help asset management firms evaluate and optimize their Business Intelligence capabilities.
Written by Sarah Mahmoud, CFA
Managing Consultant, Research, Analytics and Consulting