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Know Your Audience — The Student

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Three investment firms, all with strong performance track records and the ability to screen for socially responsible investments, competed for a religious foundation investment mandate. Finalist #1 described the socially responsible screening process — without specific reference to the kinds of companies this foundation wished to avoid. Aside from a few pleasantries regarding the place and the weather, Finalist #1 could have been presenting to a wall.

Finalist #2 customized the presentation by confirming up front the kinds of companies the foundation wished to avoid. But Finalist #3 won the business simply by adding another layer of specificity to the process of customization. The leader of the presentation team for Finalist #3 studied the religious foundation’s website and RFP. He then asked the portfolio manager to provide a few examples of how the investment process would work specifically for an organization such as this one — a consumer discretionary company, for instance, substituted for a tobacco company, given the foundation’s prohibition on investing in so-called “sin stocks.”

Finalists #1 and #2 learned only that they had lost the business due to a superior presentation of how the investment process would actually work.

Moral: Specificity is the soul of credibility.

Also see Know Your Audience — The Professor and Know Your Audience — The Chauvinist.

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