Saturday, September 8, 2007

McKinsey - Reorganizing Sales and Marketing Functions in Institutional Asset Management [8/9/2007]

Reorganizing Sales and Marketing Functions in Institutional Asset Management

A large institutional asset manager took steps to improve client service, reduce asset attrition, improve cross-sale rates, and increase assets from new clients.


A large institutional asset manager was performing poorly on client service for its mostly managed accounts, compared to competitors.
It asked McKinsey to help address a number of issues, including inconsistent client segmentation, a lack of institutionalized client knowledge, the need for a global approach, and a misalignment of goals. Service was not team-based, there were no systematic client-feedback processes, and there was no reliable and replicable service model. Roles were unclear with no internal coordination around client acquisition, cross selling and retention.

Analysis and Teamwork

Instead of multiple CST combinations and interactions, McKinsey developed multi-functional and client-focused regional teams, which reduced the number of client interactions dramatically.
The McKinsey team set appropriate incentives and metrics, aligning goals by tying them to compensation on the basis of 60% individual targets and 40% team performance. It improved customer segmentation by allocating teams by regions instead of by client types, with at least one top performer for each.

Sharing best practices was institutionalized with templates profiling competitor and client information to stimulate cross selling. McKinsey differentiated the service model for high potential and multi-product clients.


McKinsey put in clear performance measures to reduce asset attrition from 20% to the 10% industry standard, to increase client satisfaction measured by surveys, to increase cross-sale rates, and to lift the acquisition rate of total assets from new clients. While there was an immediate morale boost, the financial impact was set to begin within six-to-nine months on the yearlong implementation program.

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