HS Marketing

Tips, Traps and Trends from HS Marketing

Tips, Traps and Trends
e-letter from HS Marketing

Perfect Pitch Revisited
June 2009

Dear Clients and Friends,

Welcome to the inaugural issue of the HS Marketing e-letter: Tips, Traps and Trends. After 15 years serving the alternative investment community, it seems like a good time to reach out a bit more formally and perhaps more regularly with our clients and industry contacts. If you prefer not to receive this communication, opting out is easy at: [UNSUBSCRIBE]

Each e-letter is designed to offer at least one tip, trap and trend specifically related to marketing communication objectives, as in our published articles and presentations over the years. Click here for samples.

Interestingly, "Perfect pitch" while published 5 years ago seems to be dusted off and revisited as the basis for many inquiries and workshops. Perhaps in this turbulent market environment, we should focus on some of those suggestions and pitfalls. Trap #1: Instead of a creating a full storyline contained in a pitch book, some managers fall into a trap resembling a data dump, offering a combination of performance data plus fund terms and conditions as a stand-alone message. Tip #1: Lead with the macro elements of your business, introducing your team, your strategy and your edge as a teaser collateral item. Develop a succinct elevator pitch as the verbal form of delivery. Tip #2: Create an institutional caliber marketing presentation. A manager's pitch book must provide a clearly distilled description of the strategy and process. Managers may gain traction in their asset raising efforts by presenting the investment and risk management process visually, utilizing a professional look and feel throughout the presentation. Tip #3: Present your performance at a value-added level, communicating the analytical high points and means of differentiation rather than focusing on individual per period raw data.

Trend: Professional investors or asset allocators expect sophisticated communication that includes a compelling storyline. They are increasingly looking for granularity in multiple areas of information well beyond levels expected 1-2 years ago. Our suggestion overall to address this trend is to adopt a more robust approach, offering ongoing transparency on a proactive basis rather than scrambling to answer unanticipated questions. Click here to read more….

Speaking to your audience: Tips, Tricks and Trends from HS Marketing

Tips, Traps and Trends
e-letter from HS Marketing

Speaking to your audience: Presentation Pointers
July 2009

Dear Clients and Friends,

Why do most investors want to hear a manager's in-person presentation before embarking on a further commitment? They want to assess the manager’s character in addition to the facts and figures about the fund. Sims Wyeth & Co., one of our strategic partners, provides presentation coaching and in this e-letter offers tips, traps and trends surrounding this critical element of marketing communication objectives.

Trap: Trying to say everything about your fund in the allotted time, in the mistaken belief that investors are entirely rational decision makers. They are rational to a certain extent, and of course they have to appear to be rational, but the evidence is overwhelming that we all absorb a limited amount of information and then we trust our gut. The purpose of a presentation is to explain what you do and how you do it in a way they can understand and remember, but more importantly it is to begin a relationship based on trust.

Tip #1: Rather than packing in more content, streamline the information you will present down to a few key concepts. Tip #2: PowerPoint headlines should be sentences. When using slides at a presentation, write a headline that summarizes the graph or other content in the slide. When you give your slides conclusive titles, they become a storyboard that can make your talk clearer and more compelling. Tip #3: Announce each slide before you show it – while the previous slide is still on the screen, allowing you to tell a story and take charge of the flow and meaning of your information. This discipline helps you reduce your number of slides! Tip #4: Recognize the importance of personalization. While speaking about your strategy and your platform, try to weave in information that gives them a flavor of who you are. Weekend soccer coach? Avid bicyclist? Gardener? Big fan of Law and Order? Such detail gives them a handle to remember you by and personalizes what can feel like a very impersonal process.

Trend: Investors are increasingly focused on a manager’s investment process. As the old saying goes, most of us are interested in sausage, but few want to know how it’s made. Nevertheless, if you don’t describe your process, you may inadvertently lead the prospect to assume that you don’t have one, which could cause them to exclude you as a preferred candidate. In order to bring to life the benefits of a process, the presenter should paint the picture of what happens without one. Click here for "Presentation Skills: Selling Your Process," an article regarding this topic. Click here to read more about hedge fund presentation pitfalls.

If you missed the last e-letter from HS Marketing, follow this link: Perfect Pitch Revisited.

Improving Your Website's Search Visibility: Tips, Traps and Trends e-letter from HS Marketing

Tips, Traps and Trends
e-letter from HS Marketing

Improving Your Website's Search Visibility
September 2009

Dear Clients and Friends,

Have you wondered how your target audience will find you on the web? Why isn't your site #1 on Google? Your firm needs to be visible to its potential investors, clients, industry colleagues and select media. Search result rankings matter. This holds true even if regulatory restrictions limit your ability to advertise or provide certain information to the public.

Isotope Media, one of our strategic partners, provides website development together with internet marketing integration and hosting services. In this e-letter, the firm's technical director Glenn C. Devitt offers tips, traps and trends surrounding this critical element of marketing communication objectives.

Trap: Hiring a search engine optimization (SEO) specialist to give your site a higher ranking on Google and other search engines. Consider this: Would GOOG stock would be worth $400+ a share if their core product could be manipulated to produce biased results? There are thousands of snake oil salespeople who will take your money based on the premise that they have some secret knowledge, but the only productive service they can provide are the tips described below. It's like physical fitness, in that there are no shortcuts and only habitual, focused effort will yield results. A trainer might help you achieve your goal, but you still must do the heavy lifting yourself.

Tip #1: The most important factors in Google rank include the following: amount of site traffic and the quantity of legitimate incoming links. LinkedIn, Flickr and Facebook almost always rank highly because these sites receive vastly more traffic than yours could ever hope (or want) to, and because many more third-party sites link to them. Your primary concern should be generating quality traffic from potential investors or clients, colleagues, and select media outlets. By successfully reaching out to these people you'll initiate a snowball effect that will garner more incoming links to your site.

Trap: Another warning about snake oil: You may have heard of "link exchanges," probably in a spam e-mail inviting you to enroll in one. Google's systems quickly recognize these irrelevant reciprocal links for what they are and will actually reduce your site ranking as a penalty for trying to game their system. Remember that $400+ stock price?

Tip #2: You can increase incoming links to your site by applying the seven legitimate means listed below. All but the first are free and require only an investment of time. For a more detailed explanation of each of these approaches, please view my whitepaper on the subject.

Consider enrolling in the Google AdWords program to purchase highlighted listings which appear at the top of searches for your firm's name or other key phrases.
Encourage your entire professional staff to create and maintain LinkedIn profiles.
Create Wikipedia entries for your company and/or officers with links to your website.
Consider creating a Twitter feed for your firm if you publish news at least weekly, but your time would probably be invested better elsewhere.
Request incoming links from every industry organization and civic group with which you are affiliated.
Publish fresh content on your website.
Whenever you make a public appearance related to your business, ask the publisher/host to include a link to your site in the story/event program.

Trend: Websites are unique among marketing methods in that there are data-driven tools which enable you to gauge the return on your investment statistically. If Isotope Media hosts your site, you already have access to a traffic analysis system. You can gain better insight into how Google sees your site by using their free Webmaster Tools. Drop us a line and we'll set that up and help you understand the results.

In case you missed the recent e-letters from HS Marketing:
Speaking to your audience: Presentation Pointers (July 2009)
Perfect Pitch Revisited (June 2009)

First Impressions Become Lasting Impressions. Branding as an Asset: Tips, Traps and Trends from HS Marketing

Tips, Traps and Trends
e-letter from HS Marketing

First Impressions Become Lasting Impressions. Branding as an Asset
January 2010

Dear Clients and Friends,

Is your firm's brand identity an asset? As we begin 2010 and a new decade, this is a wonderful time to reflect, recap and resolve. Regardless of the current stage in your business cycle, a few introspective questions for hedge fund managers and others in the alternatives community may help avoid common marketing pitfalls and prove useful. The concept of brand identity revolves around the public's impressions of your firm's qualities and shortcomings. Successful branding is becoming an increasingly important and integral component of long-term client relationships that extend beyond reliance on investment performance to attract and retain assets. Click here for prior e-letters.

What is the value of branding for an alternative investment firm? Consider your brand as your perception in the marketplace. Your brand identity is the collection of attributes that the buyers of your products and services associate with your firm. Building a brand involves creating the qualities together with a value proposition to differentiate your firm and make your product(s) and services unique to the target audience. Brand awareness requires an ongoing process of outreach to showcase your capabilities and communicate effectively to clients, prospects, other industry professionals and the media. Successful efforts can lead to a higher associated value, trust and loyalty. While most firms in the alternatives space have ignored branding, many companies offering "name brand" services and products in other industries have leveraged these opportunities for years. Remember, we only have one chance to make a first impression.

Tip: Employ a holistic approach to the brand building process. To achieve effective long-term results, branding must reach beyond the task of creating a visual identity or writing a single marketing message for your firm. You will need to execute a multitude of activities, utilize several communications platforms and consider various channels. Most importantly, emphasize what makes you different, how you add value, in order to stand out from the crowd. The suggested list below serves as an initial but not complete roadmap.

First, take inventory from within, followed by a reality check from trusted external sources to address these questions or issues . . . among others.
1. Can you describe the business in one sentence, also 3-5 words?
2. When was the firm founded? Is there a unique story?
3. Is there a key concept, person, place or name associated with the firm?
4. How does your target audience view your firm today?
5. What aspects of your image need improvement?
6. What are the relative strengths and weaknesses of your competitors?
7. If you have a current visual identity including a logo, what do you like/dislike about it?
Next, consider opportunities to undertake branding activities that will achieve positive lasting impressions within reasonable constraints such as budget, personnel and time.
1. Position your firm effectively.
2. Articulate a clear and compelling message.
3. Design a unique yet professional visual identity.
4. Build out your marketing tool kit.
5. Create or upgrade your web presence.
Reinforce your brand across various platforms and channels.
1. Leverage your website as a "pull" based marketing platform. This strategy if applied effectively will bring your target audience to you for fresh content. Disseminate your investor relations materials on a proactive basis. Be sure to apply data-driven tools to analyze the relevant statistics and gain marketing insights. For a more detailed discussion on this subject by our website development partner, please click here.
2. Explore and selectively participate in cap intro and/or meet the manager presentations that are a good fit between "who you are" and the audience's interests.
3. Consider educational opportunities, speaking engagements and a proactive media relations program to achieve further branding and related visibility.

Trap #1: Applying mixed messages. Whether messages are created by different people and/or at different times, it is critical to apply a consistent look and feel (visual identity) together with a unified storyline for all presentations and collateral, both web-based and offline, including ongoing investor reports, performance commentary and related communications materials. Inconsistency may create brand confusion.

Trap #2: Counting on brand value to be positive. A negative association or poor communication strategy may confuse or dilute your firm's public perception. In that case, rebranding efforts may be needed. For example, if your fund suffered a severe drawdown or applied gates leading to heavy redemptions, it may be time to refocus your message, go beyond the returns, and consider which attributes could be accentuated to achieve a more positive impact.

Trend: Many institutional investors today are more attracted to a firm's sustainable infrastructure than a high recent rate of return. Furthermore, excessive reliance on the founder of the firm may appear as a shortcoming, resulting in investor concerns that need to be overcome or at least balanced with a focus on communicating your client servicing and operational capabilities, all of which are potential branding attributes.

e-letter archives:

Creating Compelling Performance Reports (November 09)

Improving Your Website's Search Visibility (September 09)

Speaking to Your Audience: Presentation Pointers (July 09)

Perfect Pitch Revisited (June 09)

Creating Compelling Performance Reports: Tips, Traps and Trends from HS Marketing

Tips, Traps and Trends
e-letter from HS Marketing

Creating Compelling Performance Reports
November 2009

Dear Clients and Friends,

In view of increasingly keen competition to attract and retain assets, it is imperative that a manager present winning performance reports. They need to be attractive, informative and be built to tell your story in the most compelling fashion and to highlight your particular strengths. In this e-letter, Meredith Jones, managing director of PerTrac Financial Solutions, one of our strategic partners, provides six critical steps full of tips to achieve your objectives.

1. Understand the Statistics: The first stage of building a high-quality performance report is to choose relevant statistics and to calculate them correctly. Most investors expect to see the following: Monthly Returns, Annual Returns, Compound Annual Return, Annualized Standard Deviation, Sharpe Ratio, Drawdown Analysis, and Correlation to Benchmarks. Statistics must be calculated correctly. For an investment statistics guide containing industry-standard statistical formulas and details, click here.

2. Showcase Competitive Advantages: Most statistics are intended to be used as comparative measures rather than as absolute numbers. They don’t mean much in a vacuum. What does it mean for a fund to have a compound annual return of 9%? Is this good or bad? What about a standard deviation of 6%? Does this make the fund more or less predictable? Present your numbers in perspective by incorporating thoughtful peer group analysis into your presentation. This kind of analysis makes a much more powerful impression on a potential or current investor. Be sure to run peer group analysis on a number of statistical factors. A fund may be at the bottom of its peer group for returns, but may rank among the most attractive funds with regard to volatility (as measured by standard deviation and downside deviation). This would make your fund a prime target for those investors who desire a cash management alternative. Another fund may rank at the bottom of its peer group for standard deviation and Sharpe ratio, but may lead its peers in annualized returns. There is an investor appetite out there for just about every return profile. It is up to you to understand your profile and use it to your best advantage.

3. Use Pictures to Paint a Picture: Graphics can drive a point home and grab a potential investor’s attention. For example, it may be helpful to showcase a simple VAMI graph to illustrate that your fund has experienced steady returns, outperformed an index, or had consistently positive returns.

4. Select Appropriate Benchmarks: Prospective investors want to know how your fund’s performance history compares to relevant benchmarks. Avoid benchmarking a long/short equity fund to T-bills, an Asian fund to the S&P 500, or technology fund to the Dow Jones Industrial Average. Select benchmarks for comparative value, not based purely on familiarity. Consider using a strategy-specific hedge fund index (available from most of the major index providers), as well as a market benchmark and, if available, a long-only (mutual fund) benchmark.

5. Include Market and Portfolio Commentary: Your performance report is incomplete without market and portfolio commentary to put the numbers in perspective. Be sure to include such information as:

What is your view of the market? Where has it been? Where is it going?
How has the fund been positioned to profit from market conditions? What changes (if any) will be made going forward?
What positions have worked well in the past month? What was done with those positions? Are they still being held? Were they pared back? What about the “losers” in the portfolio?
What are the largest positions within the portfolio? Why were these positions selected?

6. Include Investment and Contact Data: Provide an outline of the fund’s structure and full contact data on every performance report. List your entry and exit dates, lock ups, notice period, minimum investment, fees and service providers, as well as full contact details for primary personnel. Without this information handy, investors are forced to search through your confidential offering memorandum and other documentation, which can only lead to frustration and perhaps thwart investments.

These simple steps can go a long way towards getting your fund noticed, and keeping current investors well-informed and invested.

Archive of recent HS Marketing e-letters:
Improving Your Website's Search Visibility (September 2009)
Speaking to your audience: Presentation Pointers (July 2009)
Perfect Pitch Revisited (June 2009)

HS Marketing

Tips, Traps and Trends from HS Marketing

Speaking to your audience: Tips, Tricks and Trends from HS Marketing

Improving Your Website's Search Visibility: Tips, Traps and Trends e-letter from HS Marketing

First Impressions Become Lasting Impressions. Branding as an Asset: Tips, Traps and Trends from HS Marketing

Creating Compelling Performance Reports: Tips, Traps and Trends from HS Marketing

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