Watching (and Measuring) Sales Performance - As It Happens

You can't manage what you don't measure. Which used to mean it was pretty hard to manage the sales of funds through brokers, registered investment advisers, banks and other channels.

No more. Online tools make it possible to measure sales, up to the minute, and let you manage how you spend your marketing bucks in support of those sales, right down to figuring out which of your reps gets results out of taking clients out on the golf practice and which just are practicing their swings.

Take Navatar. This is a buzzword-friendly service that works "in the cloud," giving you access to tools for managing relationships with brokers, banks and financial advisers "on demand." Alternately, you can consider it "software as a service," running on top of a suite of services offered by Salesforce.com, which pioneered the concept of letting companies subscribe to online versions of computer programs which they didn't have to install or maintain.

Navatar's mutual funds add-on to Salesforce.com lets sales managers see aggregate sales data from different regions of the country or by broker-dealer firm or other overall measures. But it also breaks down sales to the transaction, so the performance of any individual rep can be tracked and evaluated.

On a macro basis, dashboards throw up on screen graphical representations, in bar chart form, of sales over a given period, such as year-to-date, for different wholesalers, for instance. This makes it easy to see in an eyeblink who the best performer is and who the worst is.

The same principle can be applied internally. If you want to see which of your regional managers is getting the most out of his or her turf, transactions are constantly tallied up under each region that is defined.

But it's also possible to get granular, on a live basis. Almost like a stock ticker, you can watch every purchase or redemption from across the country. And it's not just the fund and amount of shares that gets identified. You see which branch of, say, Merrill Lynch is responsible for the transaction. And which sales rep. By name.

"So essentially as a manager, and depending on who or what you are managing, you have different metrics show up," said Navatar Principal Alok Misra. "Essentially, there are available dashboards which tell me who my top-selling reps are, which branches are producing the best, which broker-dealers are bringing me the most business."

From a fund perspective, using data coming in from transfer agents, you can see which funds are selling best, which types of funds are selling best and which are lagging behind.

Managers, though, don't have to rely solely on the "in-the-box" reports (there is no box, anyway). They can create "ad hoc" reports, using a wizard, picking fields from different data feeds. So you can see, for instance, not just who the top selling reps are, but even their phone numbers if you want to call them up. If you want to pay personal visits, you can order up reports on the best-performing branches.

These systems typically keep track, as well, of the communications being made with the reps or brokers directly, in support of their activities.

The Advisor Desk service of Salentica Systems, based both in New York and Toronto, takes this a step further and tracks all expenditures made by the rep in trying to land a sale. E-mails to a client get tracked, calls to a client get tracked-any tasks, any activities. And any expenditures, whether it's fund company marketing dollars supplied to the branch office or the individual rep, road shows made on behalf of the branch or rep or activities like golf outings that get reimbursed.

This allows the system, in effect, to create a return on investment in that branch or rep. Expenses get tracked against assets under management, notes Salentica Vice President of Marketing Tim Davey, and the sales manager for a fund can decide where to direct additional expenditures. The new spending, presumably, will be directed against the reps or branches that are delivering the most sales.

"They can determine who is spending their time with the people who are actually working with them and buying their funds," Davey said, "as opposed to wasting their money in dealing with advisers that haven't been spending any money with them."

So "expense-level detail" reports and "activity detail" reports can be run against advisors and other reps.

"You've got a guy who spends a lot of time on the golf course with one adviser, and the adviser has never sold a single fund for them in two years," Davey said. "Or they're not spending any money on this other adviser taking him out to dinner, yet the guy has sent in a million dollars worth of business."

The system can track co-op dollars, as well, so that a manager can see how well that money is spent. Co-op dollars typically are used to fund an investment seminar at a local hotel and cover the meals, rooms and other expenses involved. Sales that result can be tracked back to the event, to see which are working, where, and which are not. Or what size events work and which don't.

Systems like these also are used to allow personal interaction between sales managers and reps in the wholesale or retail channels.

The key to this is alerts. The Advisor Desk will alert a fund manager when $250,000 worth of a fund, for instance, is being redeemed in St. Louis, prompting a quick call to try and get the money moved into another fund within the same family so it's not lost to another company's funds or another type of asset.

Similarly, if a rep pulls in $250,000, a call to the rep to congratulate her for the result can be the immediate response, to solidify the relationship.

The system can also automate the delivery of fund prospecti and other company materials. If they have three funds that are not performing well, they can get a report on which reps have not recorded a single sale in any and send materials that will prompt action.

This kind of detail has arisen from Salentica's "narrow focus" on the mutual fund and wealth management business, with its tool.

"It's all we do. It's the situational fluency. We understand the business. We are totally immersed in this business. We understand all the complexities and bring best practices to it," Davey said. "I'm not selling to a manufacturer one day and a hospital the next."

Other systems, such as Advent Software's Tradex service, keep track of how a given order is received ("a virtual meeting on Aug. 23") and executed, the fees involved and the net amount received into a fund.

But, ultimately, the information that matters most to fund managers is instantaneity: immediate detail on the latest sale received.

"The uniqueness is they've connected all the parts together,'' said Julian Koski, managing director of Transparent Value, which maintains a Web-only shop of three mutual funds and two hedge funds, that is adding another nine mutual funds by year's end.

He was speaking about Navatar, the Salesforce add-on, which gives him pretty much a real-time feel for what's happening in the marketplace, from who's buying his funds, who the broker is and where the office is. As soon as a transaction is executed, "I'm seeing it," Koski said.

Real-time feedback on how sales reps are performing is key. It's even going to get to the point where a fund manager can see whether a given rep is selling more of another fund family's products than yours. Access Data, a unit of Broadridge Financial Solutions, for instance, is starting to deliver market share comparisons through its Market Intelligence software (see story, page 10).

And Transparent Value is using its own techniques to figure out what customers are interested in. It provides access to information, from its site, to details on other, competing funds. The point? To see what customers are interested in, if they are not going to buy its own funds. and which are not. So action can be taken.

If fund shares are redeemed, "I want the wholesalers to know about it, so they can go visit with the client," Koski said. "We want to track everything, very early."