It’s decided, you’re going to update your marketing materials.
So why the nagging doubts?
You know you could be doing a better job of telling investors why they should care about you.
But every time you think about refreshing those tired old marketing materials, something stands in your way.
Are cognitive biases holding you back?
These mental shortcuts are hard-coded into our brains through years of evolution. When all the evidence tells us we need to change, but we stick to the status quo, we can blame cognitive biases.
Here are five biases that could be delaying your marketing makeover:
Effort Justification – This is my baby, and it’s beautiful!
The first issue to overcome may be an undue attachment to the marketing materials you already have. Especially if you created them yourself.
When we attribute more value to the things we create ourselves, that’s effort justification.
This cognitive bias is closely linked to something we call the sunk-cost fallacy. Having put time and effort into something, we don’t want to throw it away. So we persist with it, long past its use-by date.
But effort justification also makes it difficult to objectively critique our own work. This leads managers to believe what they have is better than it actually is.
If in doubt, obtain an objective review of your existing marketing materials. But don’t ask an investor, because they are unlikely to give you the unvarnished truth to your face.
It’s better to hire a professional third-party who truly understands what moves the needle with investors.
Familiarity Principle – Taking comfort in the familiar
We don’t have to create something ourselves to become attached to it and value it more than is rational. Sometimes we like things simply because we are used to them. This is the familiarity principle.
Is there a DIY job that once seemed urgent but never got done and over time you learned to live with it? A wonky cupboard door? A leaky tap? A room the previous owners painted a questionable shade of orange?
You’ll find that problems soon turn into quirks you barely notice.
Your attachment to your fund’s marketing materials likely runs much deeper. These documents tell the story of what you do and who you are. It doesn’t get more personal than that.
All the more reason to take action.
You deserve to have your story told right. And investors deserve to hear it right too.
Ambiguity Effect – Fear of the unknown is normal
The next issue is our natural fear of stepping into the unknown, which is underpinned by a cognitive bias called the ambiguity effect.
We tend to avoid options with uncertain outcomes. In other words, risk aversion.
They say a bird in the hand is worth two in the bush. Maybe your deck isn’t perfect, but it works. And what if you spend time and effort changing it but end up with something no better? Or worse?
Fund managers must understand that what is true in investing is also true in marketing. Without risk, there is no return.
If you approached investing with that same attitude, you wouldn’t invest in anything. At least you know where you are with cash!
Your ideal investors are out there.
But they won’t see you if you don’t stand out from the crowd.
That means taking some marketing risk.
The Well-Travelled Road Effect – Underestimating the cost of inaction
The well-travelled road effect is the human tendency to overestimate the effort associated with change – and to underestimate the effort involved in maintaining the status quo.
Yes, change requires effort – but it is probably less effort than you think.
Our work with clients often involves rethinking how they talk about who they are. This can be extremely rewarding and, believe it or not, a lot of fun.
Your other option is maintaining the status quo. This has its own costs, which you are probably under-estimating.
Are your current marketing materials getting through to the investors you want to reach?
If not, then this is a huge opportunity cost.
Dunning–Kruger Effect – If you want something done, do it yourself
Having made the decision to update your materials, you have to decide who will do the work.
It is always tempting to save money by doing it in-house. After all, who knows your fund better than you?
This brings us to our last cognitive bias, the Dunning–Kruger effect.
This is our tendency to believe we could do other people’s jobs just as well as them.
Fund managers are victims of this all the time. How many amateur traders believe they are on the cusp of riches because they opened an eToro account?
Most people don’t understand how much skill – and how much work – is required to make money in the markets.
The same is true of marketing.
No doubt, many fund managers are also good writers. They are smart people who went to good universities where they wrote excellent essays.
But that doesn’t make them great copywriters.
If you want marketing materials that connect with your target investors, it pays to bring in the professionals. Let them do what they do best, while you focus on making money for your investors.
So, if you have thought about giving your marketing materials a refresh, why not make 2025 the year you go for it?
And if you need help overcoming any lingering doubts you may have, reach out to our team. We are always happy to help!
