In Marketing Funds, Awards Add PR Spin
November 19, 2001
Earlier this month the small fund unit of Seattle-based insurance giant Safeco received three awards for its Web site. The folks over at kasina, a New York e-commerce consulting firm that specializes in mutual funds, thought enough of the site to include it in its annual list of the mutual fund industry's top-20 Web sites. Then, two weeks ago, Safeco Fund's site got two more awards from the Mutual Fund Education Alliance, an organization representing the no-load fund industry.
While to some these kinds of awards may not amount to much - perhaps a pat on the back to the site's developers or maybe something to put up on the fridge at home - Safeco Funds is crowing over the acclaim.
For the complex, which has $4 billion in assets under management, marketing dollars are hard to come by, and you won't likely see the firm buying full-page ads in the Wall Street Journal anytime soon. So, the firm sees awards like these as key marketing tools, says Terrie Deidesheimer, who oversees Safeco Fund's e-commerce initiatives.
Marketing a Pat on the Back
The firm isn't alone. In an industry bent on ranking everything from day-to-day performance to customer service, consultants and publications are issuing a host of awards and top-whatever lists to build themselves up as experts. Likewise, fund shops see the ranking schemes as free publicity and are doing everything they can to jostle their way onto the lists. Not surprisingly, fund companies flood the wires with press releases highlighting whatever achievement has gotten them included on a who's who list or earned them an award.
"Any aspect of a fund's operations that you can get into print is a plus," said Irving Strauss of Strauss Corporate Communications. "It's not only a direct-selling route...it's a way of people remembering that they read about them somewhere."
The awards come by the dozens. Others include Barron's Top-50 Fund Families, Money Magazine's The Money 100 list and a series of annual customer reports from research firm Dalbar, which churns out rankings for Web sites, customer service, communications and other criteria.
The organizations that develop these rankings are reluctant to point out the benefits that accrue to them by sponsoring the awards. Dalbar president Lou Harvey sniffs at the idea and says his firm's work is about helping fund companies improve their work methods, not necessarily about getting the funds noticed. "Our mission is to raise the level of excellence in financial services," he said. "This is what we do. We invest in understanding the customers and what affects customer behavior."
Pushing the PR Envelope
There is a risk that such ranking systems can become a hokey or contrived bit of schlock that mixes into the rest of the industry's syrup of public relations ploys. But consultants don't know of a new ranking program that has flopped yet, they say. And some firms are taking steps to ensure their programs are seen as genuine measures of quality.
For example, Steven Miyao, who heads kasina, says that nearly 50% of the companies that made kasina's top-20 list this year are clients of the firm. He justifies this by saying that his firm works with a good portion of the industry, including nearly half of the 20 largest fund complexes. But, in an effort to avoid any conflict of interest, he said the firm hires a group of outside consultants to evaluate the Web sites that may or may not end up in the kasina list. And he said kasina often gets calls from clients who complain that they didn't make this year's rankings.
"We don't let our client relationships interfere with any of the rankings we do," Miyao said.
Benchmark or Marketing Tool?
Still, there's no denying the marketability of these rankings. Miyao said the firm started its Web site ranking list four years ago. The firm had been researching the best and brightest of financial Web development for its consulting work anyway, he said, and figured releasing a public list of those sites would be a good benchmark for the industry.
Since then, he said the list has become like a Fortune 500 for Web finance. But it was slow going. The first year kasina published its top-20, which is based on a number of criteria, from usability to branding, few publications noticed. By the second year it was being published in the Wall Street Journal, Miyao said. And now, even more publications are picking it up and fund companies are paying attention. Downloads from kasina's Web site of a digital version of the list and a report that accompanies it have increased by 20% a year, he said.
"We get a really high demand from people," he said. "Firms are actually letting us know things that they have done and making sure that we are informed on everything that they are doing. People are registering their site for the study."