“Hunting” and additional revenues from its client base—and a point at which the customer starts to react against constant “Farming” attempts to expand its expenditures. As with agriculture, there is a danger of “overfarming” if the same resources Sales-methodology gurus often use the analogy of are taxed too greatly. “hunting and farming” to describe two different classes of sales activity

1. W H I T E
P A P E R
Hunting & Farming
Two Client Relationship Imperatives for Investment Managers
Executive Summary
Investment managers don’t just manage portfolios; just as importantly, they
manage relationships. There are two fundamental dimensions to client relationship
management activity: “hunting” and “farming.” “Hunting” consists of developing net
new opportunities for the firm—establishing new client relationships and increasing
assets under management from new client acquisition. “Farming” consists of nurturing
and cultivating relationships with existing clients—retaining them and deriving new
value from their loyalty.
In this white paper, learn why hunting and farming are essential areas of focus for all
investment management firms, and how systematic approaches to client relationship
management, supported by the right technology, can help investment management
firms excel.

2. Introduction: “Hunting” and additional revenues from its client base—and a point
at which the customer starts to react against constant
“Farming” attempts to expand its expenditures. As with agriculture,
there is a danger of “overfarming” if the same resources
Sales-methodology gurus often use the analogy of are taxed too greatly.
“hunting and farming” to describe two different classes
of sales activity. “Hunting” consists of seeking out and The logical conclusion is that to truly sustain growth,
winning new business; “farming” consists of cultivating businesses must reach an appropriate state of equilibrium
additional business within the existing client base. between hunting and farming—one that ensures an
adequate accretion of new customers but that also
The analogy is popular because it is useful. It helps define capitalizes on sales opportunities within the customer
two separate but related lines of sales activity, which from base. It is little surprise, then, that many financial analysts
an organizational perspective may require two different consider the balance of revenues from new and existing
groups of sales personnel with distinct skill sets and customers to be an important indicator of overall financial
work styles best suited to one of the two pursuits. But health and long-term viability.
even more importantly, it helps identify and describe
two discrete streams of revenue that smart businesses
should consider and address in their strategies and Hunting and Farming in Investment
day-to-day operations. Management
Effectively balancing the hunting and farming revenue Though investment management firms’ sales
streams is a critical consideration in the current competitive organizations differ significantly from those of, for
business climate. The headlines are replete with stories of example, manufacturing firms or telecommunications
firms that have foundered as a result of pursuing one of the companies, the concepts of hunting and farming are no
two approaches at the expense of the other. less applicable—and no less useful.
Hunting-focused sales organizations that place all In the institutional asset management space, firms must
their emphasis on winning new customers may ignore be continually on the “hunt” for new business: responding
the needs of their existing client base. In such an to RFPs, seeking new institutional clients, working with
environment, high customer attrition rates are common, consultants, targeting competitor contracts with imminent
often fueling a “snowball” effect wherein the need expirations. Increasing assets under management is an
to hunt for new customers intensifies as the existing omnipresent goal, and securing new institutional clients is
client base erodes. Beyond simply failing to address indispensable to AUM growth.
client issues—thereby damaging their reputation and
On the flip side, institutional asset managers must also
missing an opportunity to gain better insight into market
focus on farming their client base effectively, cultivating
needs and weaknesses or gaps in product and service
opportunities to cement client loyalty and increase share
offerings—firms that overemphasize “hunting” overlook
of wallet. In this competitive industry, if institutional asset
the phenomenal opportunity to sell more easily and cost-
management firms place too much emphasis on hunting
effectively within their existing client base.
and not enough on farming, they risk having new-client
The fact that the cost of sale is so much lower when acquisitions undermined by the erosion of their existing
selling to existing customers leads some companies, by client base.
contrast, to place an inordinate emphasis on farming the
client base, rather than acquiring new customers. While The Relationship Factor
this is an attractive strategy, The concept of hunting and farming is a simple one, and
it has obvious limitations. the benefits of its dual revenue streams are immediately
To truly sustain growth, businesses must Despite their best efforts,
reach an appropriate state of equilibrium apparent. Investment management, however, is not a
all companies experience simple industry.
between hunting and farming—one that
some customer attrition, so
ensures an adequate accretion of new
customers but that also capitalizes on a gradual contraction in the In addition to all the transactional complexities of
sales opportunities within the customer size of the customer base building and managing client portfolios, institutional
base. is inevitable unless new asset managers grapple with an even more elusive and
customers are also being troublesome factor: relationship complexity. Institutional
added. And while deeper clients are surrounded by a shield-like assemblage of
customer focus and close attention to customer needs third parties that can make it infinitely more difficult for the
can be invaluable in improving a company’s ability to “hunter’s” arrow to hit its target. Similarly, relationships
cross-sell, up-sell, and develop appealing new offerings form an important element of the farming process, and
for customers, there is ultimately a point at which the they can act as either fertilizer or herbicide in attempts to
company exhausts its options for gaining substantial grow share of wallet.
Pivotal CRM | White Paper 1

3. Unlike in a simple business-to-consumer sales scenario, “Our focus on client service assures that what we
investment managers must navigate an exceedingly do is directly connected to what our clients want
complex relationship structure that more closely and need.”
resembles a business-to-business interaction1—and
a complicated one, at that. Intermediaries such as “One of the keys to our success is our commitment
custodians and consultants play a strong role in to our clients.... Our strategies are refined by a
influencing client decision-making, but even tracking continuous dialogue with our clients and backed by
their roles can be labyrinthine: they may be associated a synthesis of technology and investment talent.”
with multiple clients, as well as prospect and competitor
Portfolio performance is the undeniable primary focus of
accounts; they may play different roles in the investment
institutional asset management activity. But it’s far from
decisions of different accounts; and, individuals within
the only focus.
consultancies may change
roles and firms. Additional What do the statements above have in common? They all
While hunters and farmers may differ influencers and parties include speak to the importance of people and relationships in
in their relationship-management lawyers, accountants, and
processes, they share the need for
investment management. And they all come from North
other intermediaries—not to America’s top asset management firms.
a holistic client view, insight into
mention the numerous roles
relationship complexities, and tools to
help them build and capitalize on this
and hierarchies that may exist Given the central role that relationships play in this
knowledge to grow revenues and assets within the client institution industry, client relationship management (CRM) strategies
under management. itself. And for each of these and systems are essential to the long-term success of any
roles and positions in the investment management firm.
client relationship, there are
different needs, different communication approaches, and As previously noted, hunters and farmers work differently.
different relationship-building considerations. Furthermore, It takes different skills to create the initial sales relationship
hunters and farmers will themselves each have different than to keep it alive and profitable in the long term. But
engagement styles and relationship dynamics with each CRM can be equally instrumental in enhancing value at
of these different contacts. both stages.
Managing these complex relationships is one of the Smarter, Swifter Hunting
foremost challenges in investment management, both
for the hunters (sales) and the farmers (client services). Institutional asset management salespeople (the core
Because hunting and farming processes within investment hunters of investment management) are responsible for
management firms are usually quite distinct, some winning new business, which directly increases assets
firms overlook the shared importance of relationship under management. Because of this important role,
management across both functions. The truth is quite their time is valuable, and the way in which they spend it
the opposite: while hunters and farmers may differ in impacts the firm’s finances. Consequently, firms need to
their relationship-management processes, they share create conditions under which sales personnel can focus
the need for a holistic client view, insight into relationship their efforts as profitably as possible.
complexities, and tools to help them build and capitalize
The first step in the sales process is the identification of
on this knowledge. They also share a goal: to grow
targets. Time spent pursuing poorly matched contracts
revenues and assets under management. These shared
or responding to RFPs without qualifying client mandates
needs and goals demand a sophisticated, integrated
is time wasted. Similarly, time spent wooing the
system: a client relationship management system.
wrong influencer is time that could have been used to
greater advantage—and profit. To prospect effectively,
Relationship Management: The institutional salespeople need to be able to quickly and
reliably identify their best targets. Like any hunter, they
Shared Principle need to know the best hunting grounds. And once they
spot their quarry, they need to know where to aim.
“Investment management is a people business, in
which intellectual capital drives success.” Precision targeting is a function of available intelligence.
CRM systems can furnish two of the best sources of data
“We aspire to do business responsibly, and to build
about prospects. Firstly, CRM systems offer a wealth
trust-based relationships with stakeholders.”
of detailed information about existing clients. This data
“We are devoted to our clients. We are satisfied only can be used to identify common attributes across the
when they are satisfied. There are no exceptions.” firm’s highest-margin clients. Salespeople can apply
this to determine the profile of the firm’s ideal targets
based on potential value and business fit. Furthermore,
in global institutional asset management firms, visibility
1. Little-Gill, Gavin. Targeted CRM Solutions for the Institutional into existing accounts can be invaluable, as it is common
Asset Management Market (TowerGroup Research Note), for a target account in one region to be an existing
December, 2002. client in another region. Knowing about these clients
Pivotal CRM | White Paper 2

4. and their successes bolsters the firm’s credibility and account details, and clear on their role and the sequence
allows it to build on existing relationships. Secondly, CRM of events.
systems can integrate commercially available institutional
market data from sources such as Nelson’s data and Using a CRM system to manage the sales process
Standard & Poor’s Money Market Directory. By providing has other advantages. Firms can embed their hard-
institutional account details earned insights and industry best practices into the
such as size, distribution, implementation of a sound, consistent sales methodology
Client Relationship Management and management, this data that leaves nothing to chance. Not only can this
for Asset Managers,2 a previous assists in segmentation streamline and accelerate the sales cycle—optimizing
Pivotal CRM white paper, describes the and enables salespeople productivity—but it can also form an important part of the
value that CRM strategies, supported firm’s branding, risk-mitigation, and credibility-building.
by robust industry-specific technology,
to use the CRM system to
pinpoint those institutional Ensuring consistency and professionalism develops
could bring to asset management firms.
opportunities that meet the brand equity, and recording every step and interaction
If you have not already read this paper, in the system creates audit trails and builds a “corporate
firm’s ideal-target criteria.
we encourage you to read it for a memory” that survives in the event of team member
comprehensive overview of the benefits Armed with information about
similar existing accounts, the departure. Recording all events and interactions in the
investment management firms can
derive from CRM. hunters are not only able to CRM system also provides a crystal clear view of account
find the best targets—they activity, and the sales pipeline to management for use in
also have information about revenue forecasting.
similar existing clients to use to inform their strategy with
In essence, the sales/hunting process is an attempt to
the prospect account.
establish a relationship with the institutional client.
Next, salespeople must find their best avenue into Every interaction should thus contribute to the
an account. The better the CRM system, the better construction of this relationship, from start to finish.
their options. CRM systems that are able to track and Furthermore, every interaction should contribute to
represent the complex relationships surrounding accounts the foundation of knowledge on which the investment
can be invaluable in determining which influencers will management team can draw to personalize and develop
have the greatest impact on an prospective account. The this relationship, bringing it to the contractual stage and
salesperson must also be able to use the CRM system beyond. Using a CRM system to manage sales helps
to find out if these contacts have played the same or ensure that the outcome of the process is not just a sale,
different roles in engagements with other prospects but a relationship.
or clients. If an RFP has been issued, investment
When a new institutional account is won, though the
management salespeople can use the information in the
hunter has found success and is ready to pass the client
CRM system to determine how to angle their proposal and
over to the farmer, the relationship is still at its most
who to contact to gain insight into the decision process.
fragile. Consistency, communication, and efficiency
Furthermore, they can use the CRM system to determine
are critical in the client on-boarding process, lest the
who knows who, and who has worked with each other
investment management firm damage the burgeoning
on other accounts, identifying contacts and colleagues
client relationship in its earliest stages. Automated
who may be able to introduce them into this account or
workflows within the CRM system can be used to simplify
provide additional insight.
and accelerate this often-complex process, delivering
Once a sales opportunity has been identified and is faster approvals and ensuring every step happens in
being pursued, a firm’s competitive advantage can often close succession. Otherwise a well-honed, professional
come down to how well it sales process can be rapidly undermined by a sluggish
manages the process. Using account-creation system. Communications protocols and
the CRM system to track transitioning steps can also be managed through the
Using a CRM system to manage
sales helps ensure that the outcome every opportunity detail and CRM system to ensure a smooth hand-off from hunter to
of the process is not just a sale, but a every interaction, as well as farmer, laying the groundwork for a positive relationship
relationship. to plan each ensuing step, is with good farming potential.
the secret to effective selling.
Salespeople can use CRM dashboards to organize Higher-Yield Farming
their personal tasks and action items, enhancing their
The fact that it costs five to ten times more to attract a
individual productivity. But beyond that, the CRM system
new customer than to keep a current one is a truism that
is a team collaboration tool that enables specialized
is often bandied about, but not always effectively applied
sales team members to divide and conquer, assigning
to operational or sales strategy. How well does your firm
individual steps to the right person to streamline the
really do at building client loyalty and deriving ongoing
sales process. Using the CRM system as a collaboration
value from your client base?
hub ensures that each team member is apprised of all
2. To get this white paper, please visit http://www.pivotal.com/resources/white-papers.aspx.
Pivotal CRM | White Paper 3

5. While the farming, or client services, function is often individual might play a secondary role in consulting for
seen as a “softer” set of activities than the sales hunting one smaller institutional account, but may be a major
process, the truth is that its stakes are higher. After all, influencer in another, larger account. Failure to recognize
unsuccessful hunting will merely fail to add new assets this could lead to poor decision-making in service
under management; unsuccessful farming carries with provision, and a lost opportunity to pursue a potentially
it the risk of losing those assets that are currently under lucrative relationship.
management.
One of the cornerstones of effective relationship
The richest foundation for management is communication, and in an era of
relationship management is increased transparency demands, this is no small
The incentives for developing further client knowledge. As noted matter. It is critical to good client service that client
client knowledge may wane at the
above, the process of building communications be regular, informed, relevant, and
farming stage if a firm does not have a
solid grasp of how this knowledge can this knowledge begins at personalized. A CRM system is the ideal facilitator
contribute to additional revenues. the hunting stage and must for ongoing client communication, with the ability to
be assiduously continued track who should receive which reports and who has
throughout the farming stage. authority to access certain information. To coordinate
Once a prospect becomes a client, it is often much easier client communications, service and relationship action
to learn more about the institutional account, its players, plans for the full year can be created within the system,
its goals, and its needs. But unlike at the hunting stage, with various milestones noted and tasks assigned to
where the strategic advantage of greater knowledge and the right individuals at each stage, in keeping with
insight is widely understood, the incentives for developing relationship-building best practices. The CRM system
further client knowledge may wane at the farming stage if can alert users to their required tasks at each stage in
a firm does not have a solid grasp of how this knowledge this process, ensuring timely, synchronized team service
can contribute to additional revenues. It is not uncommon efforts. Furthermore, each authorized team member can
for firms to place more emphasis on getting to know an review all applicable client account information, including
institutional client before they become a client than after details of all past interactions, prior to contacting the
the relationship is actually established. This is a serious client, ensuring that the firm presents a seamless, unified
error given that, as at the hunting stage, every service face to the client, regardless of who is making contact,
action and interaction contributes to—or detracts from— and that comprehensive information is at hand in order
overall reputation and brand credibility. Furthermore, as to respond to any inquiries. Users should also be able to
with any relationship, you get out of it what you put in, quickly and easily enter reports following each of their own
and as with all farming, crops will not survive long if left interactions with the account.
untended.
Greater customer knowledge allows for deeper and more
One advantage of deep client knowledge has already satisfying personalization of the client experience. Using
been discussed: the role it can play in helping define the CRM system to track client preferences, such as
ideal target-customer characteristics for hunters. This the desired frequency of contact and preferred format
client-base analysis and segmentation can also be a for reports and other communications, enables the
source of great insight for farmers. For one thing, a CRM investment management firm to easily provide the kind
system that tracks thorough client information can also of individualized treatment and experience that many
easily reveal true client value to client services users: the institutional clients demand.
assets under management by the firm, the share of the
full client wallet that this figure represents, the cumulative Effective CRM usage also allows investment management
revenues recognized from serving this client, and last but services personnel to transform their roles from reactive to
not least, the cumulative cost of serving the client. This proactive. Effective contract tracking and expiration alerts
information can be used to allow client services representatives to take special steps
develop a more strategic to ensure contract renewals, perhaps giving accounts
Greater customer knowledge allows specialized care in the months leading up to renewal
for deeper and more satisfying approach to client services,
focusing resources where and securing early buy-in from key stakeholders. Client
personalization of the client experience.
they get the highest returns. services personnel can also use the CRM system to spot
It can also lay the foundation problems early and ensure they never reach a critical
for creating differentiated service levels based on client stage or jeopardize an account.
value, so that providing service to clients is never done
Another way in which CRM can help client services staff
at a loss. By tracking complex relationship structures
be more proactive is in cross-selling and up-selling. At
and individual roles within the CRM system, similar kinds
the most fundamental level, the 360-degree client view
of value calculations can be performed at the individual
provided by the CRM system makes it infinitely easier for
level, providing greater insight into overall value that may
client services personnel to identify potential up-selling
be masked by relationship complexity. For example, an
and cross-selling opportunities, whether on a firm-wide
Pivotal CRM | White Paper 4

6. scale by segmenting the entire client database or on Pivotal CRM enables asset managers to fully integrate
an individual ad hoc advisory basis. Action plans for sales, marketing, and service functions for increased
client service can include systematic up-selling and efficiency and effectiveness, providing a complete view
cross-selling prompts timed to coincide with contract of the client so users from all areas of the company
milestones and other events in a coordinated attempt to can personalize their client interactions. Pivotal CRM
grow share of wallet. Beyond that, client services staff can saves time and increases productivity by automating
analyze aggregated data to and facilitating workflows for important multi-stakeholder
identify potential opportunities processes, such as opening new accounts and
Pivotal CRM for Institutional for the development of responding to RFPs. It also provides visibility into complex
Asset Management new offerings. They can networks of affiliation and influence, allowing IAMs to
• A 360-Degree Client View also use the sophisticated more successfully track consultant activity and identify
relationship-tracking features new opportunities.
• Workflow Management to identify relationships, such
• Consultant Management as consultants with significant With major global asset management firms around the
influence over attractive world using its CRM solutions, the Pivotal CRM team
• Proposal Tracking
prospect accounts, whose has proven time and time again its ability to dramatically
• RFP Process Management full value has not been increase productivity, grow assets under management,
• Opportunity Management adequately explored. and foster strong client, custodian, and consultant
relationships in the asset management industry.
• Sales Forecasting
By applying a two-pronged
• Activity Management approach of cost reduction— The Pivotal CRM team's approach ensures a faster
through streamlined service time-to-market with a lower total cost of ownership, by
• Relationship/Influence Tracking
efforts and differentiated delivering financial-services solutions on the scalable
• Event Management and flexible Microsoft® platform, which supports easy
service levels based on
• Expense Tracking client value—and revenue customization, integration, and deployment. Institutional
• Regulatory Compliance generation —through asset managers can rapidly and cost-effectively adapt
proactive renewal tactics, the Pivotal CRM solution to meet changing compliance
• Performance and Client and operational demands, and grow with their business—
strategic up-selling and cost-
• Reporting selling, and better leveraging today, tomorrow, and in the future.
of influential relationships—
To learn more, please call us at +1 877-PIVOTAL or visit
investment management firms
www.pivotal.com/financialservices.
can turn client service into a significant contributor to
profits and AUM.
Pivotal CRM for Institutional Asset
Management
Pivotal CRM for Institutional Asset Management® is
designed to help investment management firms meet the
challenges of hunting, farming, and beyond—enabling
employees to collaborate across departments to provide
consistent, exceptional service to their clients while
growing assets under management. A complete customer
relationship management solution, Pivotal CRM enables
investment management firms to increase productivity
and decrease operational costs by dramatically improving
the efficiency of their client-facing services. At the heart
of this solution is a toolset to help build superior client
relationships that promote loyalty and increase client
retention.
Pivotal CRM for Institutional Asset Management offers a
rich set of features that mirror the processes commonly
used by institutional asset managers, combined with the
flexibility to mold to individual firms’ unique processes and
environments. This combination of industry-tailored and
custom components, along with the inherent flexibility of
Pivotal CRM, leads to a lower total cost of ownership for
Pivotal CRM customers.
Pivotal CRM | White Paper 5

7. Pivotal CRM: More Efficient Hunting
Need Solution
Identify appropriate targets • Rich client database helps identify common attributes and firm “sweet spot,” as well as
existing clients in other geographies whose other divisions may be good targets
• Integration of money-market data helps segment and pinpoint targets based on size,
distribution, and management
Determine key account • Tracks complex relationship structures and roles, such as consultants, custodians, and other
influencers influencers, in an easy-to-understand manner
• Makes it easy to identify individuals’ varying roles in different accounts
Manage the sales/contract • Enables team members to collaborate in the development of RFP responses, and other tasks
process through workflow tools and shared resources/views
• Allows users to assign individual steps to the right person to streamline the sales process
• Empowers firm to embed consistent sales methodology for greater consistency and control
Manage the client on-boarding • Automated workflows can be used to simplify and accelerate account-opening processes,
process delivering faster approvals and ensuring every step happens in close succession
• Comprehensive relationship and activity tracking ensures smooth handoff to
informed farmer
Pivotal CRM: More Profitable Farming
Need Solution
Keep track of complex • Tracks complex relationship structures and roles, such as consultants, custodians, and other
relationship structures between influencers, in easy-to-understand manner
clients and intermediaries
Identify cross-selling and up- • Tracks assets under management and share of wallet for insight into opportunities for growth
selling opportunities • Enables users to note cumulative revenues recognized from individual clients, as well as cost
of serving the client
• Helps firm determine highest-value services
Provide proactive client service • Allows service and relationship action plans for the year to be planned out in full, with tasks
assigned to the right individuals at each stage
• Enables firm to be proactive about extending/renewing contracts
Deliver personalized client • Deliver personalized client experience
experience
Conclusion: Finding the Right Balance and client services person may differ dramatically. But
both have the potential to nourish the firm in distinct yet
Why use the analogy of hunting and farming for complementary ways.
investment management client acquisition and servicing?
At first, few images may seem further apart than the rifle- By recognizing the shared revenue-generating potential of
toting hunter or tractor-riding farmer and the suit-wearing its “hunters” and “farmers,” and supporting their unique
investment manager signing major pension fund contracts abilities to develop strong, profitable relationships with
in a corporate boardroom. But the point of the analogy is institutional clients by implementing the right integrated
neither to entertain nor to oversimplify; its objective is to CRM technology tools, investment management firms
demonstrate that client acquisition and client services, like can find the optimal balance between these two revenue
hunting and farming, are two different-styled approaches streams, and derive ongoing value from their client
to securing sustenance that must both be supported to relationships.
create a balanced environment.
As with the hunter and the farmer, the skills and daily
activities of the investment management salesperson
For more information or a complete list of our worldwide offices, please visit www.pivotal.com.
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