At The Shattuck Group, Randy empowers mid-sized service firms to break through to their next level.
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Over the last few years, I’ve been privileged to witness some of my RIA clients being acquired. In nearly every instance, my clients have told me that our work was very influential in the acquisition. How so? My organization deploys best practices in sales and marketing. Ostensibly, the goal of this work is to differentiate our clients from competitors so their people are seen as the go-to advisor within a market niche. This is about positioning personal brands as much as corporate brands.
But there is another incredible benefit that we’ve discovered that is a direct result of this work: The same strategies that differentiate a firm and its advisors so clients pick it also differentiate it so M&A acquirers pick it. I did not see that one coming. I want you to have every possible advantage in the M&A game. So I’m going to unveil our secret sauce for how we did it.
People Believe What They Read
I know this is a no-brainer, but it has to be stated: Just as prospective clients like to do research on an advisor before picking them, prospective acquirers do the same. Most of the time, their research starts by reviewing the website and LinkedIn profiles of the people from your firm. So my question for you is this: How differentiated are these? Does your website stand out? Are the LinkedIn profiles of your top people up-to-date, spiffy and professional?
Now most of the time when I ask this question, people immediately focus on the look and feel of these digital properties. I believe that is a huge mistake. Not one of our clients said that they were successfully acquired because their website looked better than the firm down the street.
It’s your written content that counts. Why? Because people tend to believe what they read — even prospective acquirers. Your brand identity needs to be professional. But that alone will not create differentiation. Your written content will have a much bigger impact than I would wager you are giving it credit for today.
How do I know this? As a certain client of ours was entering due diligence, we began to notice something strange in the marketing automation platform we manage on their behalf. Some new website users showed up. They were from a particular region of the country, and it was clear that there was more than one person.
They did not register for any of the content assets available on the website — which would have made them visible to the system. But it was clear that they were spending a lot of time on our client’s website. They were very interested. They consumed hundreds of pages of content for hours on end. Their user sessions were, on average, 10 times longer than any other user.
A few months later, I found out exactly who they were: A committee had been established from the acquiring firm to discover RIA acquisition candidates. This committee consisted of just a handful of people and they were exchanging notes daily and meeting every few days to discuss what they had found. This team was so impressed with what they saw that our client made their short list and got invited into the due diligence process. A few months later, the deal closed and the stakeholders at my client’s firm did very well. The written content that we had created on behalf of our client propelled them to the front of the line.
How We Did It
If you’d like to achieve a similar outcome, please allow me to explain how we did it. It’s a relatively simple concept with three parts (even though it’s much harder to execute than it sounds):
1. Build an ideal client profile.
2. Create content that speaks to their goals, opportunities and challenges.
3. Build a content library consistently over time.
An ideal client profile contains both demographic and psychographic information. The demographics have to do with age, annual household income, what they do for work and a few other factors. But it’s the psychographics that really matter. We believe there are three incredibly important psychographics:
1. Goals — which clients feel absolutely must be accomplished.
2. Opportunities — which excite their imagination.
3. Challenges — which prevent them from achieving goals.
So when you think about who your firm serves, how would you describe these three areas? Here is why these are important: Your thought leadership content needs to speak to your ideal clients’ goals, opportunities and challenges. When I view what most RIA firms talk about, it’s certainly not these topics. Most RIAs talk shop about the markets.
In fact, it was a struggle to get my client to focus on what matters to their clients. When I first started working with this firm, I asked them why clients pick them. They said “our expertise.” But when we polled their clients, we heard very different answers. Not one person said they picked our client for their expertise.
However, in nearly every brainstorming session with this client, wherein we were seeking to come up with ideas for their content, the advisors consistently kept coming back to their expertise. It took about two years before they were coming to the brainstorming sessions with ideas that mattered to their clients, not ideas that emphasized their technical expertise.
This is yet another important part of the strategy: It takes time. You have to commit to building a thought leadership library of content, not just a piece here and there. My advice is to do this slowly, month after month and year after year. It’s too overwhelming for your people to try to do this all at once.
I project that over the next decade, we will see an unprecedented level of M&A activity in the RIA space. If you want your firm to be on the winning side of this activity, these ideas are proven to work.
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