Thoughts

RSS is Hugely Underrated

Posted by Mike McLaughlin on Oct 12, 2010, in Thoughts , tagged with

Yesterday we sent a quick Tweet out to both American Century and Vanguard regarding their blogs.  The reason?  Neither had the link to the blog’s RSS feed on the blog homepage.  We saw this as a missed opportunity.  Why do we think that?

First, let’s take a quick step back.  What is RSS?  It’s Really Simple Syndication, which I suspect means nothing to many of you.  So here’s how I think of it:  RSS is a way to browse all of content from all of the Web sites you read every day in a single location. No surfing from site to site.  No repetition of clicking links and the Back button, dodging pop-ups and advertisements.  If you have Outlook, most of the individual articles/content you care about can be sent directly to your Inbox just like any other e-mail message.  Sounds pretty good, right?

Want to see what's in the latest edition of "Investment News"? Use RSS to get it in your Inbox.

Yet, few people actually use RSS.  In fact, after 15 minutes of Googling the most recent statistic I can find about RSS adoption is this Forrester study from 2008 that pegs it at 11%.  And the news might be worse within financial services.  As part of a client project this summer I surveyed 25 financial intermediaries about technology.  Only 1 of them had even heard of RSS, and none used it.

There are good reasons why RSS has not lived up to its potential.  But that doesn’t mean its promise is lost.  A little promotion and simple education is all that’s needed.

For firms like American Century and Vanguard, educating clients about RSS makes sure the people you want to read your content will read it more often.  If you are an asset manager or insurer with content and people to reach, education on “what is RSS” can help.  After all, someone may not think to visit a blog or Web site regularly, but they’ll definitely be opening their e-mail.

And to their credit, American Century has the RSS icon on the homepage already* and Vanguard indicated they’ll be looking into it.

* It’s possible we went temporarily senile and completely missed the RSS icon on the American Century blog homepage.  But two of us spent several minutes explicitly looking for it and never saw it.  So, this is our story and we’re sticking to it.

Advertising to the Investor

Posted by Anu Heda on Oct 10, 2010, in Thoughts , tagged with , , , ,

Last weekend, I opened the Sunday paper and the typical coupons and advertisements fell out.  There was an unusual one – a full page, heavy-card stock advertisement for IAU.  IAU is BlackRock’s iShares ETF that tracks gold’s price.  I never received an ETF or Mutual Fund advertisement via the newspaper.  I asked Mike, my dad and a friend – to the best of our knowledge; nobody had.  Interesting – maybe revolutionary!

The IAU insert from the New York Times. Click to enlarge.

My initial reactions:

  • The ad is pretty clear.
  • The ad must be extremely expensive.
  • The “call-to-action” is pretty generic.

Clarity

The advertisement assumes the viewer is already interested in gold.  Then there are five different reasons to invest in IAU over other options.  From the advertisement, I think, maybe it’s time to invest in gold and maybe I should do that through an ETF.  I wonder if IAU is the best option. My thought process is the best BlackRock can hope for.  So, the message is very clear.

Cost

Is this expensive?  Expense is relative to value or return; so I can’t really say.  Yet, I wonder if BlackRock can measure this ad’s effectiveness.  For investors buying IAU via brokerage accounts, there’s no way for BlackRock to measure those sales.  Potentially, this advertisement is simply seen as an effort to elevate the firm’s brand and products to a more ‘top of mind’ status.  In that context, it’s hard to say if the ad is expensive.

Call-to-Action

The ad lists a telephone number and Web site.  I visited the Web site listed (www.ishares.com/gold).  I want a continuation of knowledge sharing, instead it’s a bit repetitive.  Initially, I see the same bullets; when I click “Learn More,” I’m immediately sent to the Fund Overview page.  This Call-to-Action isn’t strong enough.

I’m curious to what you think.  Good idea for industry leaders like BlackRock?  Does the idea scale down well to other firms?

Hybrid Wholesaling Evangelism Needs a Break

Posted by Mike McLaughlin on Oct 08, 2010, in Thoughts , tagged with

Cerulli Associates recently released a report on wholesaling, citing the following as a central finding:

Hybrid wholesalers average approximately 50% of the production of a traditional field-wholesaler for 40% of the cost, but work best as complementary resources.

A press release for the report indicated that these numbers make a compelling case for the integration of hybrids within sales teams.  To that I say:  maybe.

Consider the efficiency results cited by Cerulli.  Taking the data at face value – 50% production at 40% of the cost, on average – even moderate variability means firms have a reasonable probability of actually seeing reduced sales effectiveness. We’ve done a lot of this research in the past.  Sometimes hybrid wholesaling doesn’t pan out.

Sure, firms need to consider if, and how, to use the myriad sales role definitions that exist between a pure internal and a pure external.  There’s real opportunity there.  But there’s no need to evangelize hybrid strategies.  The discussion should be about the thoughtful and detailed analysis needed for firms to decide what approach is right for them.

Hybrid wholesaling has been around a long time.  And it’s not right for everyone.

Testing out Foursquare

Posted by Anu Heda on Oct 06, 2010, in Thoughts 
(Inspired by the WSJ Mossberg solution)

Over the last four months, I used foursquare on my Blackberry.  I thought to share my thoughts for anyone considering foursquare – personally or for business.

How it works?

foursquare enables people to “check-in” at different locations (mostly businesses), using the GPS in their smart phones.  In the “check-in” process, people can comment on the location with a “shout out.”  foursquare doles out points for visiting locations and as users accumulate points, foursquare gives out badges (e.g. explorer).  The person who visits a location most is dubbed its “mayor.”

Is it useful?

Yes, in two ways.

First, foursquare replaces Yelp or other Web sites that list user-generated reviews.  For example, I can come out of the subway in New York City, open foursquare and search for coffee.  The Blackberry application will list coffee locations and their respective distances from me.  That’s helpful.  It’s much faster than calling up the browser, navigating to Yelp, searching, sorting and reading.  The reviews seem of less quality than the major Web sites, but the access is fast.  It’s also faster than launching Google Maps and accessing reviews Google relates to specific locations.

Second, foursquare is a consumer-oriented marketer’s dream come true.  There’s a “specials nearby” button that provides micro-coupons to the smart phone.  That’s great.  I bought two-for-one strawberries at Whole Foods with a foursquare special.

I don’t really care about foursquare points, badges, or mayoral appointment (but a very socially competitive person may).

Can foursquare help my business?

I don’t envision foursquare selling mutual funds, annuities, or other investments, but insurance comes to mind.   For instance, Allstate could run foursquare specials that tie closely to the “Mayhem ” ad campaign.  Allstate could place a foursquare “special nearby” when users are near select agent offices, discounting for any qualified driver switching car insurance to Allstate.

Facing Headwinds, What Can Hedge Funds Do?

Posted by Mike McLaughlin on Oct 04, 2010, in Thoughts , tagged with

How hard is it going to be for small and midsize hedge funds to survive, much less thrive?  According to two recent news items, very hard.

If a fund is preparing to launch, in startup mode, or somewhere south of $500M, this is gloomy stuff.  What do small/midsize funds do in this environment?

One option, of course, is improving performance.  But everybody is working tirelessly at that.  And for those funds below their high-water marks, it can be a long road back to attracting investors (and collecting performance fees).

A second option is to invest heavily in distribution, specifically via third-party marketers or by increasing in-house staff.  Under the right circumstances this is appealing.  But most small funds either hesitate or are incapable of investing heavily here.

The last option is the one with the best risk/reward profile.  It’s professional branding and communications.

Most small funds spend on a logo and other rudimentary branding.  Fewer spend on designers to help with materials (pitch books, fact sheets).  And fewer still use professional copywriters to refine their messages.

As a result, most hedge funds miss the best opportunity they have to stand out.  The hook, the story, the “what makes you different and interesting” is critical.  Small and midsize funds need to consider an investment in professional communications for three reasons:

  • Developing communications is not a core competency.  Investment experts are not necessarily experts at telling their own stories, nor do they always understand what prospective investors value most.
  • Very few hedge funds do it.  There’s contrarian value in using a tool most ignore.
  • It’s affordable. One year’s worth of management fees on $1M in assets (or less) is a worthwhile price to pay to improve a fund’s chances of standing out.

There are many reasons why hedge funds fail to attract assets.  A common one is that the fund’s story simply isn’t working.  Given some of the dire projections for the industry, it’ll be interesting to see if more funds invest in their communications.