Six Mistakes to Avoid With Hybrid Wholesalers (Ignites published article)
As we continue through this new world of mandated virtual sales, wholesalers are being forced to change their approaches. In many cases, sales teams are eyeing the hybrid wholesaler model.
Hybrids aren’t new, but social-distancing standards have pushed them into the spotlight. Firms that were previously experimenting are now aggressively expanding their hybrid focus.
But hybrid strategies that dance around the edges of the outdated wholesaling model will fall short.
True hybrids have tough marching orders. They need to do it all — phone calls, e-mail, voicemail, virtual meetings and face-to-face selling — with equal agility. The good ones use rich data intelligence and marketing savvy to match the right sales approach with the right advisors at the right time. And they must manage their time and expenses in the most productive way. That’s a tall order.
Here are six mistakes fund shops make when expanding their hybrid teams:
1. Using hybrids as a cost-cutting strategy
Given the complexity of their skill sets, good hybrids are worth their weight in gold. Firms that take on hybrids mostly to save money may miss the opportunity to attract the best talent.
Cost saving should come from reducing the size of a firm’s overall sales force, not from paying the hybrids less to do more — or worse, getting rid of their administrative support.
A dilemma is what to do with all those externals. The best externals have been working quietly as hybrids for some time. They are the super hybrids of the future, but they have been hamstrung by metrics that reward activity over quality, focus on meetings instead of outcomes, and ignore efficient ways to shorten the sales cycle via phone calls or Web meetings. Going forward, metrics across the board need to be reexamined to motivate wholesalers to engage in activities that can be measured both quantitatively and qualitatively.
Wholesaler compensation needs to be reexamined, across roles. And those who have the skills to deliver on the hybrid promise should be compensated appropriately. Keeping only traditional external or internal wholesalers on board will reduce the sales managers' capacity to focus on the future.
2. All about product
Yes, you have to sell product. But firms don’t need hybrids (or a sales force) to distribute hot products. Model placement and digital marketing can now cover the lion’s share of that distribution effort.
Rethinking what a hybrid brings beyond product is no longer a "nice to have" — it’s a differentiator.
The way you structure their pay package sends a clear message. If most of their pay is based on commissions, they’ll focus on products. It’s time to pay them for other tasks, too. Firms can start by defining activities that bring value. For example, part of their compensation could be based on how well they teach advisors how to do something that will save them time. And yes — you can measure that.
3. Using location-based models
When face-to-face communication was key, territories drove scale. But advisors have embraced virtual interactions and they won’t look back, even after social-distancing efforts disappear. So it may no longer make sense to align sales resources by regions or other traditional channels. Instead firms could align some hybrids by advisor practice type. That would create the specialization advisors’ value.
Smart firms have also figured out how to manage hybrids who work their broader territory from home. This creates a wider recruiting and talent pool, because it will no longer matter where each wholesaler is based. It can also save fund complexes money because they may no longer need to pay for high-priced real estate in big city hubs to attract hybrid talent.
4. Junior wholesalers in disguise
Many firms use hybrids that cover only remote or lower-value advisors and prospects. This can be effective but limiting. Firms should employ multiple hybrid strategies.
For example, hybrids with strong retention skills might own advisors in major cities with lots of assets under management, but not much money in motion.
Each individual could have an appetite for a different type of role. Assign hunters where you need them, align your best farmers where they can deepen loyalty and align your techies with techie advisors.
5. Metrics that get in the way of effectiveness
What gets measured gets done.
Measuring activity and outcomes is more effective than counting meetings and phone calls. For example, an outcome might be assessing whether the advisor was qualified or disqualified during the first interaction. Pipelines that define clear quality-based outcomes will bring more predictable sales results.
6. Hiring and training for an outdated skill set
Hybrids require customized training that will take them to the next level. Firms need to reexamine their traditional product and off-the-shelf sales training approaches. A more effective training program helps wholesalers develop discrete skill chunks. For example, hybrids with copywriting skills excel in capturing advisors’ attention via personalized text and e-mail.
Summary
Progressive firms have come to realize there is no single right hybrid strategy. Many use several strategies that pinpoint specific opportunities unique to the firm, product line and target advisor.
Many of the decisions about distribution have been driven by what is easy for the firm to manage. Advisor-centric sales segmentation is harder but essential.
Hybrids can be the heroes of the game change. But they’re most valuable when firms apply thoughtful strategies, that go beyond "tweaking" outdated wholesaler models.