We hear two questions in almost every conversation with clients:
- Where is our firm winning/losing the most?
- What are the winners in the space doing?
These questions target integral aspects of assessing the efficiency and effectiveness of their organization's distribution efforts; but, without being appropriately framed to factor in their firm's value proposition, core competencies, platform placement, performance, pricing, distributor relationships, etc., these questions do not accurately evaluate their efforts.
Many firms define winning and losing simply by looking at the sales that they did not capture and the assets that they lost. However, like the two questions above, these traditional definitions fail to accurately identify each firm's true opportunities and risks because they do not consider many of the factors previously mentioned. Our “Green Space” and “Red Space” concepts/metrics were developed within our WalletShare service to help firms get in front of the right advisors at the right time with the right messages.
- Green Space (i.e., advantaged opportunity) redefines and pinpoints opportunity to include only the sales and assets that a firm did not capture where they have distinct product advantages (e.g. better performance and lower fees).
- Red Space (i.e., replacement risk) redefines and pinpoints risk to include only the AUM at their firm that compare unfavorably against competitive sales, and are therefore at risk.
We believe that the need for firms to employ a more data-driven sales approach with the goal of enhanced precision and focus in their efforts is as important as it has even been. The analytics that we provide can enhance segmentation, opportunity scoring, lead generation, etc., which ultimately assist distribution organizations in prioritizing their efforts based on data-driven signals. However, a robust multidimensional data repository that integrates external and internal data inputs is necessary for firms to leverage these and any other analytics to optimize their distribution efforts.
The external and internal inputs referenced come from a vast array of sources, such as CRM systems, data packs, public filings, analyst ratings, as well as holdings and transaction history, and the data signals referenced include any and every signal providing information about the advisor, end investor, distributor, model, category, location, and the market overall. The more inputs and signals a firm can incorporate, the better it will be able to identify its true opportunities and risks, prioritize and engage with clients and prospects, enhance performance management, structure sales goals and compensation that align with the organization objectives, and ultimately execute with enhanced precision and focus in their distribution efforts.