One thing is for sure in 2023: deal volumes are going to be lower than 2022, continuing the slow down from 2021. Markets have natural ebbs and flows, and the red hot pace of deal activity during the COVID era had to eventually slow down, at least for a while. Take your pick of negative headlines over the last few weeks, but it’s clear that investment banking teams are preparing for a quieter year.
So what should investment banking teams do while things are a little quieter? Go back to basics: focus on intelligently identifying, developing, and nurturing client relationships for when the market returns.
I know, duh – that’s obvious enough – so how exactly do I believe firms should be doing that? What is my unique view? By playing catch up to the markets side of the business in how they leverage modern software and tools to intelligently prospect and develop a robust client intelligence view.
As someone who works with hundreds of brokerages around the world, I can tell you that when it comes to technological adoption around client intelligence and insights, research departments tend to be at the front of the pack with the most technical infrastructure, followed closely these days by sales and trading (thanks in part to Street Context), but investment banking tends to be far… far behind.
I could wax poetically about the philosophical change towards technology that is needed in the approach to client intelligence in investment banking, but it feels like the start of the year is a good time to share some tactical advice/ideas that you can actually implement in the next month:
- Clean up your distribution lists, and find a way to manage them: this is probably the most boring of all my advice, but it’s also the most foundational. How do you keep track of everyone to meet with, engage with, and connect with? If you’re adding each contact to a CRM, bravo – you’re in rarified air. However, if you prefer a somewhat lighter lift, then I would suggest you add them to a list – it can be in Excel, Outlook, or a purpose-built software. Just start keeping track.
- Figure out how you’re going to prospect and get new contact details: there are many tools available to look up companies/boards, and get their contact information. Use a tool like BoardEx, SourceScrub, or ZoomInfo. Find the companies you are looking for, pull their email addresses, add them to your lists (or get an analyst/someone on your team to do it).
- Focus on building your brand by putting out regular value-add content: start engaging with everyone on your lists. Pick a cadence that works for you: weekly (which I would suggest), monthly, or quarterly, and start a practice of sending out industry commentary/highlights. You can include links to industry or macro news articles, internal research (if you have it), or general anecdotes/commentary. Add your perspective. It’s a great way to add value, stay top of mind, stay in your prospect/client’s inbox, and to start conversations. You wouldn’t believe how many stories I hear of potential clients responding to emails saying, “oh, your email reminded me…”
- Leverage email intelligence to drive smarter conversations: once you’re putting our regular content, you can use the steady flow of interaction data and intelligence as your ‘top of funnel’ to drive timely interactions, from conversation through to pitch decks, with both prospective and existing clients.
Rinse and repeat. When deal volumes are low is the exact time to start these best practices. Identify prospects and clients that you want to engage. Get their contact information. Add them to a distribution list. Start putting out regular value-add content, and use the interactions to drive smarter conversations. That’s it.
As a final point of validation, a very well known boutique firm told me that distributing regular content (they have a series of monthly pieces) has been their single biggest source of deal flow in recent years, and they now have over 100,000 people across their lists.
When deal flow does pick up, who do you think clients will be thinking about? The person who has been in their inbox on a regular basis, with value-add information, and timely conversations… or someone else?
This business will always be about relationships – but this is one of the best ways to build them today.
If you have any questions on the above, or the processes to build in supporting your client intelligence strategy, we’re always here to help.
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