Nurturing Your Tribe through Communication

A hedge fund has three ways of getting clients:

 

1. Outbound marketing, such as through direct mail.
2. Inbound marketing, such as through your website’s SEO content.
3. Referalls.

 

One mistake marketers often make is to erroneously believe that the third form of getting clients requires a system – that they need a referral system that is external to their other forms of marketing.

 

I’m here to tell you that this is incorrect. A good referral-generating system is a system built into how you connect and communicate with your tribe. All you really need to generate referred investors is to uphold good relationships with your current investors; they will naturally refer their friends.

 

You can make it easier for them to refer their friends by educating them – by giving them hedge-fund-related topics to discuss with their friends and family. But most hedge funds don’t have a systematic approach to maintaining person-to-person communication with their investors.

 

Why?

 

Maintaining Relationships Is Not Evergreen

Unlike your website or other marketing materials, relationship maintenance is not evergreen. You cannot just write a how-are-you-doing type letter and mail it out to all your investors once a month. It would be like sending the same love letter to your wife, over and over.

 

So it’s no wonder most hedge funds would rather just shell out some of their capital on a new advertisement or webpage redesign. It’s less work.

 

But I don’t imagine you could have built a successful hedge fund if you were trying to cut corners, so this article is for you.

 

The Advantage of Client Upkeep and Referral Attraction

The key advantage to dedicating a portion of your marketing funds to client communication is thrice-fold:

 

1. It costs a lot to get back an investor you lost.
2. It costs very little to upsell your investor (i.e., get him to put more money in the fund).
3. It costs less to get a referred investor than it does to get a new investor off the street.

 

In short, even though the act of relationship-building and communication sounds all lovey-dovey, it’s still all about money. You spend less money to get more AUM.

 

The Easiest Relationship Builder: The Newsletter

A newsletter is often the easiest and cheapest way to keep in touch with your customers. I also recommend time-specific, personal postcards (e.g., birthdays and holidays) and the occasional phone call, but newsletters are great because they don’t have to be personal and can be sent to every one of your investors much the same.

 

But when you write a newsletter, you should follow these guidelines below:

 

Avoid MakingIt a “News” Letter.

That is, don’t make your hedge fund’s newsletter a boring collection of news stories that your investors could have easily gotten from other sources. You want to avoid being both boring and redundant, so go easy on the financial news.

 

Have Real Authors

By “real authors” I mean real people writing the articles, instead of having the hedge fund as the general author. Let your author(s) have his own voice, giving the newsletter some personality. Not everything in finance has to be dry and objective. Allow space for editorials and predictions. Add pictures of the authors. The overall goal here is to be able to put a face, voice, and personality to your hedge fund. Without these aspects, your hedge fund is just another uninteresting financial vehicle.

 

Involve Your Investors

A great way to get investors interested in the newsletter is to have them contribute. This works in two ways: It allows them to feel like part of the community; it allows them a glimpse at who else is investing in the fund. Reserve space for some guest articles. Personally contact your investors to ask them to contribute articles. Even if they refuse, they will be honored by your request. Those who do contribute not only feel closer to your fund but also make the creation of the newsletter easier for you.

 

Spread Out the Writing

It’s easy to fall into the habit of rushing the writing in the week or days prior to release. After all, if you want until the last minute, your newsletter’s news will be the freshest. Refer to point 1: Your newsletter is not about news. Instead of rushing the writing, keep the newsletter on your mind the month prior to release. Every time you get a good idea for an article, write it down and send it to your writers to get it finished. A newsletter should be built up slowly – it shouldn’t be a stressful activity that fills only three days of a month. That’s called a period.

 

Repurpose Content

To make your newsletter even easier, repurpose content you’ve placed in other places. For example, if you have a blog, you can mine it for articles that can be simplified, repurposed, or extended upon. Don’t mistakenly believe that your newsletter readers will be upset that some of your blog content appears in your newsletter. In fact, most won’t even notice; while you can get your newsletter out to ever investor’s mailbox, your blog is not likely on ever investor’s reading list.

 

Use Interviews

Interview. It’s the easiest way to get content in a rush. Interview experts in your industry. Interview your fund manager. Interview your investors. Interview anyone who can even peripherally contribute to the newsletter; interviews are inherently interesting because they get people to talk about topics they wouldn’t have talked about spontaneously. You can even announce the interview beforehand and get your investors to send in questions, making the process all the more easier for you. Perhaps the best part of using interviews is that you don’t have to do any writing. If the interview is done via email, just copy and paste. If it’s a phone interview, send the recording to be transcribed.

 

Inspire with Personal Stories

Your newsletter doesn’t have to be completely about finance. Inspire your tribe with personal stories, whether from investors or employees in your hedge fund. Have an investor who bought a new car with his portfolio profits? Take a picture. Get a testimonial from him. That’s content for your newsletter right there. Investors are people; they are inspired emotionally to invest logically. Use this fact to your advantage.

 

Still Not Easy?

I hope that the above advice will make it easy for you to maintain constant and personal contact with your investors. If you still feel that the creation of a newsletter is too much work, I strongly advice against skipping it, nevertheless. You’ll still get positive ROI from a newsletter, even outsourced.

 

Part of the HedgeSys system is newsletter creation. Using HedgeSys gives you the advantage of hassle-free newsletter creation. Our newsletters conform to all the above guidelines and is completely customizable based on your hedge fund’s needs. Our newsletters are physical newsletters, published through our publishing house, and go straight to your investors’ homes. So consider us as your last resort (I truly stress that you should do this in-house, if you can).