Selling to institutional investors is not a simple task. You have to deal with multiple decision-makers, long sales cycles, strict compliance requirements, and fierce competition. How can you navigate the complex buying process of these sophisticated customers and close more deals? Here are some tips to help you succeed.
The first step is to understand the specific needs and goals of each institutional investor you target. They may have different investment strategies, risk appetites, performance metrics, and reporting standards. You need to do your homework and research their profiles, portfolios, and preferences. You also need to identify the key stakeholders and influencers in their organization, such as portfolio managers, analysts, consultants, and trustees. You should tailor your value proposition and pitch to each of them and show how your solution can help them achieve their objectives.
In my experience, your research and the tailoring of your pitch is the base work you need to do to find the angle that gets your firm that first meeting with their firm. And let me stress 'meeting' which by definition is a conversation not presentation. The 'pitch' is not to push what you perceive as your firm's value proposition. The 'pitch' is a series of questions you need to ask to better understand their needs where the answer is not known by your firm nor publicly available.
By pooling constituents' investments, institutional investors arguably reduce the cost of capital for entrepreneurs while diversifying constituents' portfolios. Their greater ability to influence corporate behaviour as well to select investors profiles may help diminish agency costs.
The second step is to build trust and credibility with your prospects. Institutional investors are looking for reliable, transparent, and consistent partners who can deliver on their promises. You need to demonstrate your expertise, track record, and reputation in the market. You also need to provide them with relevant, accurate, and timely information and data that can support your claims and address their concerns. You should avoid hype, jargon, and exaggeration and focus on facts, figures, and testimonials. You should also be proactive, responsive, and respectful in your communication and follow-up.
By demonstrating ones expertise, track record, and reputation in the market. You also need to provide them with relevant, accurate, and timely information and data that can support your claims and address their concerns. You should avoid hype, jargon, and exaggeration and focus on facts, figures, and testimonials.
The third step is to align with their buying process and timeline. Institutional investors have complex and rigorous processes for evaluating, selecting, and approving vendors and solutions. You need to understand their criteria, standards, and procedures and comply with them. You also need to anticipate and overcome any potential obstacles, objections, or risks that may arise along the way. You should map out the steps and stages of their process and align your sales activities and milestones with them. You should also communicate clearly and regularly with them and keep them updated on your progress and status.
The fourth step is to deliver value and differentiation to your prospects. Institutional investors are looking for solutions that can provide them with superior returns, lower costs, higher efficiency, and more security. You need to show them how your solution can deliver these benefits and how it differs from your competitors. You should highlight your unique features, advantages, and benefits and quantify them with concrete examples and case studies. You should also leverage your existing customers and referrals and showcase their success stories and testimonials.
The final step is to negotiate and close the deal with your prospects. Institutional investors are looking for fair, flexible, and favorable terms and conditions that can meet their needs and expectations. You need to prepare and present a compelling proposal that can address their pain points, goals, and requirements. You also need to handle any questions, objections, or counteroffers that may come up and resolve them in a win-win manner. You should also follow the best practices and guidelines for closing sales, such as asking for the order, confirming the details, creating urgency, and getting referrals.
The standard to which businesses measure trust is poor despite the importance of trust in a relationship. In the US alone, firms spend over $70bn a year (Harvard Business Review, 2017) training sales people and still cannot achieve a standard that is closing the trust-gap, where 88% of business buyers ultimately do business with a trusted advisor but trust less than 20% of salespeople (LinkedIn, 2020, State of Sales Report). Training methods are not working. Most people forget 84-90% of what they learned within 90 days (Ardent Learning, 2021) and thus the standard is forgotten. Integrating dedicated research and technology with your meeting platform hard-codes the standard into every meeting and gives you the edge during the sales process.