Sales Technology Still Hasn’t Come to Capital Markets

The Capital Markets is an industry going through massive and accelerating change. That change seems to be everywhere – new technology, new tools, new markets – it goes on and on. However, one part of the business hasn’t changed at all in the last 10-15 years: the tools and technology used in client-facing roles. Sure there have been little flares of evolution, and some new entrants are looking promising, but it’s still mostly the same. The suite of tools and technology used looks almost identical to what it looked like 10+ years ago. I always joked that if you took a trader from 10 years ago, and teleported them to today, they would be lost – there has been so much change in OMS, EMS, algos, and other trading tools. But take a salesperson from 10 years ago, tell them the accounts they cover, and they would be off to the races – the tools, technology, and tactics are almost identical. It’s not meant as a slight – it’s just a reality of the business and where we are today.

Before I get into why I think that is true in the Capital Markets, let’s take a moment to look at the rest of the world. Sometimes we get so myopic in this industry that we lose context on the change happening outside our industry. For sales in many other industries (especially those in technology), there have been massive changes – here is a sample of the ecosystem of tools that have evolved to empower and augment client-facing efforts more broadly across the board:

Source: Bowery Capital

And that’s only from 2017 – and only the major tools in each category. There are literally 1000’s of tools in each category, with more coming out every day. What’s even more concerning though, aside from the lack of tools and technology, is that there are terms in there that have never even been uttered in capital markets. Content Sharing. Predictive analytics. Data Automation. Lead Generation. Lead Intel. Development. Customer Success. These new areas of expertise have developed within sales organizations across industries, building into ecosystems of tools and best practices, but for the most part haven’t even been discussed within the capital markets.

To really send this point home, ask yourself a few questions for a moment, regardless of your role:

  • What is your firm’s lead generation strategy? How are you measuring the effectiveness of it? How many leads did you generate last month or quarter?

  • What has been the conversion of those leads? How effectively have your leads converted from Q1-Q3 this year?

  • What is the average time it takes a client to go from a lead to an active client? What does that cycle look like, and what is the trend over the last 12 months? Is it growing or shrinking?

  • How do you approach client success? What are you doing to ensure you’re building deep, long lasting relationships with clients, vs. surface level transactional ones? How do you measure the health of those relationships?

  • What is your sales technology stack? How many of those buckets is your firm leveraging one or more tools in?

Now, sometimes I hear objections to the above – that the Capital Markets is just different – but is it really that different than other industries? In a client-facing role (and in sales) your job is to deliver a tailored set of value-added services and products in order to service the client, with the ultimate goal of driving a transaction event. Sure, there might be some nuances of the business, but the fundamental role of anyone in a sales capacity – whether Capital Markets sales or technology sales – is to sell the products the firm produces.

Finally, you might be saying “well, we have a CRM!” and that’s a good start – but as you’ll see from the above graph, the CRM is just one piece of the puzzle. You need to have the entire ecosystem working together. This isn’t about ticking a box and having a solution in place. It’s about building an orchestra of tools and technologies that all work together to drive the business forward and produce the results you’re looking for.

It was hard for me to make the change myself, coming out of the industry. There are a lot of new terms, a lot of new tools, and just a whole lot of change. That change needs to come – and it’s going to eventually. You will need to start thinking about your broader client-facing organization, and specifically your sales organization, and start to think about what metrics you’re trying to drive. Revenue (or commission) is great – but it’s usually a lagging indicator. You want to start thinking about leading indicators, what you want to measure, and how you will provide the tools and technology to capture that data. That will help you see around the next corner, and plan more effectively.

On implementation, it will be a consolidated push between educational efforts (teaching teams about how sales is evolving, and new best practices) and experimenting with new tools and technologies to see what works best for your people and end goals.

As a final note, I’ll leave you with a story from a recent interaction I had this summer. A global head of sales at a major IB ask me a question: “Blair, what would you do if I brought you in tomorrow to run sales in X asset class?” I paused for a moment, considering the question. Then I answered him: I would go out and hire 50 software salespeople to augment his team. Have the existing industry salespeople teach the nuances of the business to the software salespeople, and have the software salespeople bring in best practices around technology, process, and structure. Build a hybrid team that brings the best of both worlds together. I think the answer was well received (and actually might be implemented!).

Technology still really hasn’t come to the client-facing side of capital markets – which means there is a huge opportunity for those who can harness it, and master it first. This is a massive area of low hanging fruit. The square is open, now it’s just a matter of who will get there first and lift the offer.

Good luck on your journey!

Blair Livingston
Street Contxt

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