If there is one thing we’ve learned since launching our own institutional investor database, it’s that the word “database” is something of a dirty word. Our standard competitors and compatriots (and often, our frequent and respected partners) aside, most databases are seen as outdated and inefficient, and the market is saturated with them. But if our partners are not the ones giving investor databases a bad name, you might be wondering: who is?
Well, more often than not, it’s happening incrementally. It’s the five emails a day most salespeople receive from other salespeople, the ones who’ve worked at a firm themselves and are trying to sell a glorified spreadsheet of accounts and contacts. The problem? Those sheets are essentially useless.
My point is, if you’re researching whether or not you should subscribe to a database, there are three common problems (and of course, solutions) that we all face when considering whether or not the database we’re looking at is legitimate.
Here’s what to look for.
Outdated or inaccurate contacts are by far the biggest problems with databases. After all, what use is a database if the data within it isn’t accurate?
Solution #1: To solve this problem, ask the following questions during the research phase, and you’ll quickly discover whether or not the database is legitimate. At the end of the day, we’re all looking for something similar: a list of curated and up-to-date contacts and accounts.
This is a real issue for the frontline salespeople. Always asking for things can make it look like a salesperson is making excuses. I have a lot of compassion for the position that the salesperson is in, because I’ve been one for my whole career. Salespeople know they need a better list of qualified leads, but they also know it’s massively time-consuming to scrape it together. It’s a catch-22.
However, as a “boss” myself these days, I also have a lot of compassion for the sales leader who expects the salesperson to figure it out and find qualified leads on their own. While it may seem like a sensible mentality, it’s a very rare salesperson who has the ability to do all that research when also tasked with certain activity levels and sales goals.
The reality is that for most salespeople, there is simply not enough time in the day to find leads, prospect for meetings, hold and do the follow up from the meetings, and then work the sale to completion.
Solution #2: The solution, at the risk of making the salesperson look weak (which it doesn’t), is to help your salespeople by providing them with a qualified and curated list of allocators (a database) who buy what you sell. This is working smarter for both the salesperson and the sales leader. At the end of the day, good salespeople are hard to find, and once you find them, you want to give them the best chance to be successful, grow their careers, and help the company grow. Limiting the amount of time a salesperson spends on anything other than setting up meetings, doing meetings, and working their pipeline is a very sensible approach to sales.
Believe it or not, this can be an issue for CFOs who approved the purchase of prior databases that didn’t get used as much as planned, as well as for CFOs agreeing to purchase a database for the first time. Quite often, salespeople sign up for databases that they believe will provide useful information to set up meetings, but turn out to be little more than mass data dumps with un-curated and inaccurate contact information that result in little to no usage. Thus, the CFO’s attitude is spot on. Why sign up for another database if you haven’t used the databases you already signed up for? How is a CFO to know the differences between those databases? And finally, what is the ROI for an institutional investor database that provides curated and qualified lists of investment allocators that are updated in real time?
Solution #3: The answer may not be scientific or exact, but the ROI is a percentage of a salesperson’s salary that can be traded for a more useful activity beyond surfing allocator web sites for leads. If compensation is $100,000 and they can spend 15% of their time not doing research on who to call on but calling a curated and qualified list of investors, then it’s no longer costing the firm $15,000 in research time.
Additionally, if the salesperson can find a lead or account in the database that they did not know about previously, and eventually get an allocation, then the math on a $2 million allocation would be, at a 1.00% management fee, a revenue of $20,000. So for most institutional investor databases, even a small $2 million allocation pays the annual cost of the database.
Then there is the qualitative ROI on morale, employee engagement, and retention that factors into the equation. Employees want to feel that their firm has their back and that they are doing everything to help them be successful, which is a big deal, but it doesn’t always go into the ROI category.
As a sales leader at Dakota, I have always believed that accurate data has been our single greatest competitive advantage; it allows our sales team members to punch significantly above their weight. We have accurate contact data that gives our salespeople anywhere from a 2x advantage to a 5x or 6x advantage, because they can spend their time focused on what matters most: setting up and holding meetings with qualified buyers.
Written By: Gui Costin, Founder, CEO
Gui Costin is the Founder and CEO of Dakota.
July 14, 2020
November 05, 2020
April 10, 2023
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Bryn Mawr, PA 19010
Tel: (610) 642-1481