Deloitte Study Suggests Social Media Policy a Must Have

On July 28, 2009, In Financial social media marketing, By Bruce Johnston
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By D. Bruce Johnston, President, DBJ Associates

According to Deloitte’s recently released 2009 Ethics & Workplace Survey, 74 percent of those surveyed believe it is easy to damage a brand’s reputation via sites such as Facebook, Twitter and YouTube.   Why wasn’t the result 100%?

Without a social media policy and strategy the risk is 100% that your brand reputation will be damaged.  United Airlines got it wrong and this is what happened – “United Breaks Guitars,” which was the headline making public relations nightmare of the week last week.  For those of you keeping score, it is estimated this episode, viewed by over 4 million thus far, cost United a 10% drop in their stock price, equivalent to $180 million or 51,000 Taylor guitars! 

Goldman Sachs stumbled and this is what happened – http://budurl.com/xbbv.  Crocs got it right when called on the carpet by Scott McKain in a tweet of a Washington Post article.  This is what happened – www.crocs/blog.com.

Employers and employees alike are seeing instances like these and are beginning to understand the real impact of social media on their brand.  The results of the study could have very well stated 74% of those surveyed don’t understand social media and the power of social media.   

The essence of social media is that customers now have the power and ability to access, consume, customize and forward information however, wherever and whenever they want.  Social media therefore provides businesses with the ability to actively listen, watch, gather and learn from their customers.  The information gathered can be converted into customer advocacy, brand building and inspire loyalty much quicker than traditional methods.

Is it worth the effort the time and effort?  According to Nielsen, total minutes spent on social networking sites in the U.S have increased 83% year-over-year. In fact, total minutes spent on Facebook increased nearly 700% year-over-year, growing from 1.7 billion minutes in April 2008 to 13.9 billion in April 2009, making it the No. 1 social networking site for the month… and worth $10 billion last week according to analysts.

Firms that fully understand the value proposition of social media are implementing electronic communications policies which establish strict guidelines for employee participation on blogs, chat rooms and other social media.  They are not bashful about imposing these same rules on employees providing opinion or advice, even if it is from their personal computers.

One example of a corporate electronic communication policy is IBM’s.  They have established a straightforward set of Social Media Rules & Guidelines, available to every employee taking the guess work out of the rules governing electronic communications.

Firms’ that establish guidelines early foster an environment that promotes social media as a way to connect to their clients, rather than through their products, and engage and solicit their employee’s opinions on social media, will benefit the most.

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Summertime – and the webinars are easy

On July 25, 2009, In Uncategorized, By Bruce Johnston
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By D. Bruce Johnston, President, DBJ Associates

I touched base with wealth management consultants Charles “Chuck” Steege, CFP,® and Philip J. Siana, CPA, recently to find out why they chose the dog days of summer to introduce their three-part webinar program, The Golden Summer Of 2009: Uncovering The Fortune That Lies Hidden In Executive Compensation. Chuck serves as Executive Financial Coach and President of SFG Wealth Planning Services, Inc. and SFG Investment Advisors, Inc., an SEC registered investment advisor. Phil is a tax attorney and Principal of Porzio, Bromberg & Newman P.C.

DBJ: Aren’t people trying to get away during the summer? Why would they attend a webinar?

Phil: We picked the summer because we find that our clients liked thinking about their money when they are relaxed and comfortable; perhaps, with a cool drink at their elbow.

Chuck: That’s right, also a lot of other firms avoid the dog days of summer, because they think no one will attend a webinar. That leaves us as one of the few games in town.

Phil: Were trying to pick up the summertime flavor, too. This is not meant to be heavy lifting or overly educational. The truth is there are a number of overlooked tax savings opportunities for high net worth clients – even in August.

DBJ: Like what?

Chuck: During the dot.com bubble, many investors found themselves socked with a big alternative minimum tax (AMT) bill, because they exercised incentive stock options (ISOs) that suddenly sank in value. Now, Uncle Sam is trying to give the money back.

Phil: AMT credits are now like a pot of gold, since Congress voted in 2006 to make them refundable in certain circumstances.

DBJ: Wait. I’m writing this down for my accountant…

Phil: You can even collect a refundable AMT credit for a year when you owe no federal income tax at all.

DBJ: This is all very interesting, but why would someone other than me want to take time from the golf course for this? 

Chuck: We’re keeping the time commitment to a half-hour. Also, there are only three sessions at noon on July 29, August 5 and August 12. We asked Fort Point Growth Partners to help develop the content so it should move along briskly, in plenty of time to get back on the golf course.

DBJ: Are you doing anything else from a social media perspective?

Chuck: Yes. We just signed on with The Executive Compensation Professional Network to see if professionals in the human resource area would be interested in coming to the webinars.

Phil: Regardless of whether an interested party is at the beach or sitting behind a desk, the webinars are aimed at any individual with $1 million and up in investable assets, as well as human resource directors who may wish to learn more about preparing employees to cope with the complex and timely decisions that underpin much of executive compensation. Fifty openings are available and attendance is on a first come, first served basis.

Chuck: The first two webinars will concentrate on the wealth accumulation phase of an individual’s career, while the third webinar will stress best practices for using wealth for the benefit of the individual, their family and their philanthropies.

DBJ: Is there any downside to blissful ignorance and just hanging out at the beach?

Chuck: Not if people don’t mind sending their additional dollars to Washington. The fact is there is still time to file for a refundable AMT credit. If anyone has opted for a late filing for their 2008 Form 1040, they may get cash back right now. If they’ve already filed a 2008 return but were unaware of the refundable AMT credit, they can file an amended 2008 return (using Form 1040X) to get cash back.

DBJ: How difficult is it for a tax payer to get an AMT refunded?

Phil: All they have to do is breathe.

Individuals with $1 million in investable assets and up are invited to attend The Golden Summer of 2009: Uncovering the Fortune That Lies Hidden in Executive Compensation by registering for any one – or all – of these dates: July 29, August 5 and August 12. All sessions will begin promptly at 12:00 p.m. EST. Fifty openings are available and attendance is on a first come, first served basis.

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Distribution Tips for Small Fund Firms

On July 15, 2009, In Financial social media marketing, By Bruce Johnston
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By D. Bruce Johnston, President, DBJ Associates

Recently I asked Dan Sondhelm, Partner and Vice President, SunStar Strategic, what strategies will help top performing small funds get the attention and recognition they deserve from investors and advisors. For those of you not familiar with SunStar and their Fund Factor publication, they specializes in helping institutional investment managers and mutual fund firms attract investors, strengthen distribution and build brands through structured news generation programs and smart marketing.

DBJ:  Dan, can you name a few distribution misconceptions small mutual funds have?

Dan:   Yes Bruce and thanks for asking.  We have found that most small mutual funds struggle for assets in this competitive marketplace because of beliefs such as:

  • “I’m too small to get noticed.”
  • “I’m a separate account manager. Our fund is only for smaller accounts for our larger clients.”
  • “I don’t do marketing.”
  • “I can’t afford a wholesaler.”

Despite being hidden gems, smaller funds with these beliefs tend to stay small or eventually get out of the business.

The alternative is to commit to growing your fund. Then leverage the fund’s public track record to also grow your separate account business.

DBJ: Does acceptance onto a platform assure asset flows?

Dan: Just because you’ve been accepted on a platform doesn’t guarantee assets will follow. Successful distribution lies in ensuring those advisors know you, know your people and know your products. But not all firms can afford a wholesaler (or twelve) or the time on the road to work and support your financial advisors.

DBJ: What strategy can firms that can’t afford wholesalers employ together assets?

Dan: Virtual wholesaling can be an excellent way for smaller firms to develop stronger distribution to compete with the larger players. This alternative method to traditional wholesaling can also help larger firms scale back their spending while still getting results.

In general, virtual wholesaling requires fund sales professionals to use technology to communicate with advisors in a structured and timely way to attract and retain investors, while building brands.

DBJ: We hear a lot about the “Power of Story”.  How important is having a compelling story to distribution success?

Dan: Did you have a favorite book when you were a child – one that you could easily recite by heart? In order for advisors to really get to know you better,  you need to tell a solid story, consistently.

That story includes information about your corporate history and funds. It articulates your key themes, sector strategy and top stock selections. At its core is your investment process. Perhaps most importantly, it is a living story — one that grows and adapts as the markets twist and turn. It let’s investors know about the good decisions you’ve made and the current positioning of your fund. Once you’ve developed your story, keep it fresh and ensure that everyone in your firm can tell it without hesitation.

DBJ: How important is media coverage in a distribution strategy?

Dan: Admit it. You’re more likely to buy a specific brand of product if a professional or celebrity endorses it. The same goes for investment firms. Third-party endorsed news coverage in national and local business publications adds credibility that can’t be bought.

Positive, frequent media coverage can often be the silver bullet in your marketing effort. Earning such recognition on a regular basis attracts advisors and investors, strengthens distribution, and builds your brand at a fraction of the cost of most other marketing efforts. Consistently tell your story to top journalists in order to build relationships and earn continued press coverage.

DBJ: You mentioned virtual wholesaling earlier; does that mean a web presence is not important?

Dan: Your Web site is not just a place on the Internet where you cut-and-paste the text from your prospectus. Instead, it is a place for you to tell your story and keep your clients and prospects coming back. There are some simple ways to enhance your existing web site to ensure your content is fresh and rich.

  • Add a Press Room that features media reprints and other information so reporters can get the information they need quickly; Showcase your latest press coverage on your Home Page to add immediate authority.
  • Post and archive your market and portfolio commentary, quarterly at a minimum, monthly, weekly or daily as the market warrants; Post the latest commentary on your Home Page.
  • Integrate your fund site with your corporate site to provide timely information and minimize compliance/FINRA review delays.

Providing such information in easily accessible ways helps advisors and prospects learn more about you and how you think quickly and efficiently.

DBJ: How much is too much communication?

Dan: Regular communication with advisors is critical in order to keep your story top of mind. Consistently offering timely and meaningful information will position you in their minds as the expert on certain topics.

  • Host Webinars or conference calls for advisors on a quarterly basis.
  • Use monthly email newsletters to drive advisors to new content and fresh ideas on your Website such as recent commentaries, Webinar promotions and media coverage.
  • Take advantage of platform outreach programs to stay in front of their advisors; many of these are free.

A healthy relationship is based largely on open communication. Building strong relationships where advisors trust and respect your firm requires proactive communications.

Dan, terrific insights and ones that should be most appreciated by our readers.  Thanks.

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Bob Reynolds & Putnam Lead the Industry to Twitter

On July 9, 2009, In Financial social media marketing, By Bruce Johnston
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By: D. Bruce Johnston, President, DBJ Associates

Today’s announcement that Putnam twitter.com/putnamtoday, and their CEO, Bob Reynolds twitter.com/robertlreynolds will begin to twitter advisors and shareholders to keep them informed of events at the firm and with their investments should be roundly applauded by the investment management community.  At a time when the industry is in need of senior leadership to blaze a trail to earning back advisor and investor confidence this certainly sends a positive signal.

The move signals to the industry and Putnam shareholders and advisors that their interests come first.  It also says that Putnam fully grasped the situation they were in, and set-out to craft and execute on a plan that would restore shareholder and investor confidence while protecting those shareholder assets they had been entrusted with.

And what a great way to signal your back then by signaling the industry that your firm understands and grasps the power of new technology; understands how to use it and understands that it will provide a competitive advantage.

Putnam certainly is exhibiting an understanding that not only do customers have the power to access, consume, customize and forward information, they can do it however, wherever and whenever they want.  By actively listening, watching, gathering and learning from their customers they will be able to convert this information into customer advocacy, brand building and inspire loyalty much quicker than traditional methods.

Next move is their followers.  And remember the old adage: “If you’re not leading the pack, the view doesn’t get any better.”

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60% of Mutual Fund Executives Say: “Ignore Existing Shareholders”

On July 8, 2009, In Financial social media marketing, By Bruce Johnston
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By D. Bruce Johnston, President, DBJ Associates 

At least that was my take-away from a recent poll conducted by Ignites during their Exchange: Social Media’s Role for Mutual Funds.  Ignites is the pre-eminent source for news about the mutual fund industry, and their sponsored session offered two different perspectives on the use of social media at mutual fund firms.

According to the Ignites poll – What do you think is the greatest benefit of social media marketing efforts? – conducted during the event, social media’s greatest contribution maybe a “spike in direct communication with potential fund customers”.  Roughly 32% of respondents saw this as the greatest contribution of Web 2.0 tools.

Enhanced “direct communication with potential fund customers” (32%), was followed by:  “reaching a younger audience” (25%), “ building brand loyalty” (23%), “building product awareness” (17%), “generating sales” (3%) and “I don’t see much benefit” (2%) where the other findings of the poll.

The data suggests that slightly less than 60% of respondents view social media as a means to access a new and younger audience of potential investors.  The balance of the votes goes to brand loyalty, product awareness and generating sales.  What about existing clients or client loyalty?

Doesn’t it make sense that firms should be communicating “with the one that brought them to the dance?”  Firms need to view customer acquisition and customer retention as part of the same equation with customer retention holding a heavier weighing.

Remember, the $10 Trillion existing shareholders have with mutual fund companies generates roughly $100 billion a year in revenue to your firm or $2,000 per household.  To ignore this group is to ignore the disproportionately weighed part of the equation:  profitability is built on customer retention! 

If profitability is built on customer retention, why then do mutual fund companies resist investing in the shareholders who have invested in their products and services?

As counter-intuitive as this may sound, there probably isn’t a group riper for a well thought out and executed social media campaign then existing shareholders.   Social media would provide mutual fund companies the unique opportunity to both listen and communicate with existing clients directly.  

Would this audience respond to social media? Recent data from Engage: Boomers shows that roughly 95.3% of baby boomers travel with computers, while 91% to 92% have access to the internet all the time.  They dislike generalization and personalization, customization and service are important to them.

Twenty-five percent of this group has Facebook accounts.  Is that important?  Total minutes spent on Facebook increased nearly 700% from April, 2008 to April, 2009… that translates into $10 BILLION in sales just LAST WEEK. 

What strategies would you enlist to keep existing shareholders loyal? Start with…

Exceptional Customer Service.  I’m sorry, but a majority of mutual fund companies cover the Morningstar style boxes.  You may not think so, but to the customer your Large Cap Growth fund is no different in their eyes then the other 3,500 it competes against.  It is well known that in other industry when firms compete against companies that offer similar products and services “exceptional customer service” is a key differentiator.

It’s not complicated.  Shareholders have problems; they want them solved. Shareholders have questions; they want them answered. Companies that provide shareholders access to an internal customer service representative with the authority to resolve shareholder issues win.  When shareholders have questions about their investments and future financial well-being they don’t have time nor want an interactive voice response system.

Reduce call volume and improve your bottom line by designing a website that answers most customers FAQs.  Performance is important but most customers are looking for statement information, the firm’s current thinking on the economy, portfolio moves and adherence to investment style.

Customer retention is a profit center – start viewing it as such.  In the commoditized world of mutual funds get the Exceptional Customer Service part right and you will experience marked improvement in your customer retention scores and profitability. 

Once you have the Exceptional Customer Service part right then social media campaign discussions can begin.  This discussion needs to take into account the shift occurring in customer consumption habits.  Not only do customers have the power to access, consume, customize and forward information, they can do it however, wherever and whenever they want.  By actively listening, watching, gathering and learning from your customers you will know this and will be able to convert this information into customer advocacy, brand building and inspire loyalty. 

Let’s hope the slightly less than 60% of the mutual fund executives polled are wrong and will rethink their position with regard to existing customers and social media’s benefit’s to their organizations.

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