Don’t Go Changing Self-directed Investors

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DIY Investors Live in a Constant State of Uncertainty and That’s OK

A client recently commented to me that self-directed investors are more challenging to serve. Representing only one-third of all affluent investors, these do-it-yourselfers neither work with traditional financial advisors nor use advice from other sources including distributors and asset managers. A look at investor sentiment during the market volatility in Q1 2018 sheds some light on key differences in the self-directed investor’s mindset compared with the traditionally advised (those currently working with a financial advisor).

Overall, affluent investors started 2018 with optimism and hope in the current investing environment. Yet concern about inflation and the impact of trade sanctions began in late January. Financial advisors, asset managers and distributors all dusted off and updated their market volatility messaging and outreach in anticipation of negative market action. Following February’s 10% correction in the S&P 500 Index and the VIX reaching a peak of 37 for only the second time in the past five years, investors ended the first quarter with far less optimism. In fact, the top-cited emotion in March was uncertainty along with a significant increase in fear. Continue reading

Four Things the SEC Can Teach Us About Messaging

In an historic town hall held this week in Atlanta, all five Commissioners from the Securities and Exchange Commission sat mere feet from the general public and spent more than the planned two hours educating through a mix of prepared content and Q&A. The same commitment to investor protection that leads to the SEC being well-known for regulation also drives its emphasis on teaching. Though our work at Market Strategies and that of our clients largely rests in the private for-profit sector, we all share the same goal of communicating so that the target audience will listen and understand. From that perspective, we can take away a number of lessons from the way the SEC’s message was delivered…

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Bridging the Gap: Exposing a Disconnect between Plan Providers and Plan Sponsors

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The defined contribution (DC) plan market is increasingly dynamic with a wide array of industry forces, priorities and innovations in play. In the wake of on-and-off industry reform and legislation along with a continual stream of fee-related litigation, DC plan sponsors are being courted with the latest solutions designed to propel participant engagement, foster financial wellness and, ultimately, increase participant retirement readiness. Yet many are still struggling with the perennial challenges of managing plan costs and navigating the myriad of fees associated with offering their employees a competitive 401(k) plan.

As the DC industry modernizes and becomes more efficient, the struggle with plan fees continues to hover over many organizations, exposing a disconnect between plan providers and plan sponsors. While Micro plans remain the most fee-sensitive segment, Small-Mid plan sponsors appear to be experiencing the most angst and are poised to take more definitive action this year, reporting an increase in likelihood of launching a formal 401(k) plan review or switching DC plan providers. In contrast, Large-Mega plans, which command higher rates of negotiating power, enjoy the freedom to think more holistically about participant needs and are better-positioned to harness the latest innovations.

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How to Manage Utility Net Promoter Score Performance

How to Manage Utility Net Promoter Score Performance

“And when you speak of me, speak well.”
Bull Durham  

As utilities seek to evolve their customer management performance goals beyond traditional customer satisfaction metrics, utilities are evaluating updated measures and management approaches that better reflect success in the transforming utility market—one of those is the Net Promoter Score, or NPS. The NPS metric is based on a question regarding the likelihood of a customer to recommend the company to others. The scale is 0–10 and based on the percentage of those posting a rating of 9–10 (Promoters) minus the percentage of those rating 0–6 (Detractors), and then multiplying the result by 100. The Utility Trusted Brand & Customer Engagement™: Residential (UTBCE) study has the most robust database to help utilities measure, benchmark and manage NPS. The study has been tracking NPS quarterly since 2016 and provides data-based analysis, modeling and insights to help utilities perform well on this metric.

The formula for calculating NPS. Net Promoter Score

The Core of the NPS Debate

For both the utility and the customer, there is confusion regarding why a customer would be compelled to “recommend” their regulated utility. If they want utility service, they use the utility. How can a monopoly motivate customers to recommend it? And, what is the value to the utility?
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Brand Evolution Is Hard—But It Doesn’t Have to Be Unnecessarily Risky

Brand Evolution Is Hard—But It Doesn’t Have to Be Unnecessarily Risky For many global companies, brand evolution is a natural part of running the business. As consumer attitudes and lifestyles change, so must brands if they want to continue to deliver value to their customers.

But in an effort to remain relevant, companies too often hinge their brand identities on current events and passing trends rather than thoughtfully forging a path forward. In this pursuit, many companies forget to first examine their place in the hearts and minds of customers. That’s a mistake because the stakes are high if you don’t get brand evolution right. This is a lesson Tropicana learned the hard way when, in 2009, it decided to drastically change the design of its packaging—a move that resulted in swift consumer backlash and a 20% sales drop.

Packaging is just one small part of your brand identity, but Tropicana’s misstep is a cautionary tale on the potentially risky consequences of making drastic changes to your brand without engaging with your customers first. In changing markets, it’s important to be nimble, but it’s even more crucial to step lightly and purposefully to maintain a healthy brand and avoid alienating existing customers.

We get it—evolving a well-recognized global brand is hard. Staying true to your brand while keeping up with the evolving habits and preferences of consumers is a tricky balance. But why do some companies pull off this transformation successfully while others confuse their customers and lose sales in the process? Examining three brands that are currently in transition can help answer this question.
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The Unique Value of Utility Marketplaces

The Unique Value of Utility MarketplacesIt is not a secret that energy utilities need to focus on strengthening customer relationships through brand and product efforts as brands like Tesla, Apple and Google are increasingly building consumer mindshare in the energy space. The good news is that utilities can reap dividends almost immediately by tapping into consumer demand for new energy technologies via a utility marketplace. Our energy industry research shows that utility marketplaces are the number one way utilities can improve their reputation and brand. In addition, marketplaces allow utilities to support demand-side management programs, improve customer experience and develop new revenue streams.
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No Longer Optional: Using Social Media to Reach Ready-to-act Investors

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While social media use is the norm among affluent investors overall, recent findings reveal that ready-to-act (RTA) investors—those who plan to make a new investment in the next three months—are using social media at even higher levels. RTA investors report using at least 2.4 social media sites each month on average compared with an average of only 1.8 social sites for affluent investors who do not plan to make an investment decision in the near-term. More specifically, compared with all affluent investors, RTA investors over-index on visits to Facebook, YouTube, LinkedIn and Twitter. A social media presence is no longer optional but is quickly becoming a mandatory component of a distributor’s or product provider’s successful marketing plan and media buying strategy.

Looking at the four major social media platforms in more detail reveals two distinct use tiers:

  • Tier 1, Facebook and YouTube: Used by a majority of affluent investors, with each becoming a nearly ubiquitous presence across the RTA segments.
  • Tier 2, LinkedIn and Twitter: Draw dramatically higher use among RTA investors compared with the broader audience of all affluent investors. This highlights the potential value offered by these platforms in targeting an audience that is ready to make an investment decision

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Digital Marketing to Advisors: Maximizing Effectiveness to Boost Brand Engagement

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Advisor marketing is in a state of flux, evolving rapidly alongside all other types of mobile communication and efficiencies in terms of staying connected 24/7. At the same time, advisors are faced with increasing responsibilities and higher levels of scrutiny on how they service their customers. Asset managers are sensitive to that and seem to understand that constantly barraging these busy advisors with marketing isn’t the best way of capturing their attention or providing a solid ROI. In fact, last year, advisor-reported marketing monthly touches from financial services providers dropped in frequency, from 110 in 2016 to only 101 in 2017. With the number of marketing touches dwindling and capturing advisor attention not getting any easier, asset management firms are funneling more and more marketing dollars into digital campaigns. Is that the right move?

Is Digital Marketing the Right Tool?

The short answer? Yes.

In 2017, advisors cited email as the most effective way to communicate with them, even outranking external wholesaler visits. What’s more, after wholesalers, the digital touches of websites, webinars and mobile apps generate the greatest lift in brand consideration. Continue reading

Five Right Ways—and One Very Wrong Way—to Improve Value Perceptions among Utility Customers

Read Five Right Ways—and One Very Wrong Way—to Improve Value Perceptions among Utility CustomersCustomers nationwide feel they are getting less value from their utility. Perceptions of paying reasonable rates for the services received from a utility are at the lowest levels we have seen since the end of 2015, as tracked in the Utility Trusted Brand & Customer Engagement: Residential (UTBCE) study.

A Stunted Understanding of “Value”

Many utilities are increasing their attention on improving consumer value perceptions. While some utilities have long had “value” as a key performance indicator (KPI), others are now in the process of updating their customer experience KPIs and looking at including “value” in corporate scorecards. However, in utility-land, “value” often reads as “price” (or “rates”)—an interpretation that hamstrings utility efforts to drive value perceptions by leaving a very important part of the value equation off the table. Specifically, “value” is a combination of two things, what you pay (where utilities almost exclusively focus) and what you get.
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Utility Customers Agree the Climate Is Changing—Just Don’t Call It “Climate Change”

Utility Customers Agree the Climate Is Changing—Just Don’t Call It “Climate Change”

“What is the use of a house if you haven’t got a tolerable planet to put it on?”
Henry David Thoreau  

This month we are celebrating Earth Day with our annual designation of Environmental Champions for those utilities whose customers say their utility has exhibited dedication to the environment in our Utility Trusted Brand & Customer Engagement study. What struck me most about this year’s findings is that customers think environmental improvements are a better investment and are not opposed to a utility rate increases related to such endeavors, at least more so than for improvements in reliability or service.

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