No Place Like Home
One of the challenges in my day-to-day is justifying the importance of branding. In the world of consumer goods it’s an accepted fact that you need to look good to stand out. Or at least look different.
But in the world of Asset Management, where performance is king, managers can often be a little skeptical of the importance of brand.
So, to any manager out there, let me ask you this: how did you choose your house?
Now I’m not Ken Griffin, and unless you’re reading this, Ken, I’m assuming that none of you are either. I don’t entirely understand the thought process behind spending $106.9 million on a property, but for the rest of us mortals it goes a little something like this:
You start off with some criteria. Typically the main three are:
Maximum price
Minimum bedrooms
Location
If you were to use a max price of £700k, 3 bedrooms and a location within a 1-hour commute of London (Surrey, for example), rightmove.co.uk today returns 2,397 results.
That’s over 2,000 homes that fit your criteria.
So how do you whittle that down? You might have a young family and so you want to live near a good school. Or you might have teenagers and they don’t want to live in a small village with one pub and a weekly bus. Conversely maybe you want lots of space and country walks.
So we’ll randomly choose a large enough town within a 40 minute commute to London: Guildford.
Instead of 2,000 there are now only 147 homes that fit your criteria.
But you aren’t going to look around 147 homes. Nor are you going to choose one at random simply because it fits your macro criteria. At this stage you’re likely to start filtering by micro criteria: size of rooms, age of boiler, quality of windows, proximity to schools, proximity to train station, cat flap, etc.
But there is only so far this logic based assessment can take you. There will still likely be a handful of homes that fit the bill. At some point you’ll begin to make emotional judgements based on your existing biases.
You might like the “character” of the home for example, or you might like the colour it has been painted. You might like the other homes on the street, too. You might see the cars parked outside and feel like you fit in. You might pop to the local barista and see other people dressed like you. Maybe it makes you feel safe. Maybe it makes you feel special. Maybe it makes you feel like you’re living in a Philippa Gregory novel.
The point is that you begin to listen to how you “feel”.
Because when all your logic-based criteria have been met, your feelings are what you turn towards. This is true whether you’re buying a house (a considerable investment) or whether you’re choosing a chocolate bar (impulse purchase).
And it’s equally true when faced with a dozen asset managers who offer similar performance, for similar fees, with similar philosophies and investments in similar areas.
How do you think investors whittle down that choice?
They begin to look to the intangibles; trust, heritage, dynamism, transparency, cutting-edge, and all the other lovely attributes that are communicated via memorable design and great copy.
There is, however, one other factor to consider: being top of mind.
The reality is that no-one buys a house without having an idea in mind. And no one chooses an asset manager from first-principles. You need to be top of mind so that when that final shortlist is formulated they are already primed to choose you.
You achieve that through consistent and long-term implementation of an actionable strategy designed to emphasise your distinctiveness, uniqueness and/or difference and ensure you get noticed.
Or put simply: branding.
As the wonderful Paul Worthington said:
Bland, boring brands that have nothing unique to remember them by, executing bland, boring brand ads that nobody notices, let alone remembers, is an excellent way to light your money on fire.