February 20, 2009

Best Strategies for Growth (Survival) Now! Part 1

by Dan Sondhelm
Assets under management are down for nearly all firms due to market depreciation. And making matters worse, most funds have also seen outflows. But a few firms have actually seen positive flows. According to Strategic Insight, only about 22% of equity mutual funds had inflows for at least four of the last five months of 2008.

We spoke with executives from four of these funds whose outstanding shares are at or near record highs. In our article, these firms, who also work with SunStar for marketing and public relations consulting services, provide you their best practices and ideas to grow market share despite current treacherous market conditions.

Below is Part 1 of this two-part issue. In Part 1, we speak to Jensen Investment Management and SBAuer Funds. In Part 2, we'll speak with Croft Funds and James Investment Research.


PR is King.
Dave Mertens, Jensen Investment Management principal for sales and marketing, has watched other funds cut staff, media exposure and client services. But as exposure and client services go, so go the clients.

"Don't kid yourself," he says. "Performance is important, but it comes from an investment discipline and sticking to it. We are first an investment firm, marketing is second. You have to get better to get bigger, not the other way around."

Mertens' marketing approach for the Jensen Portfolio is eloquent in its simplicity. "We believe in transparency, so people know what to expect." They haven't done anything differently in talking with the public during these trying times. Rather they've stayed consistent in message and visibility.

Keeping the fund's name in the media drives more financial professionals and prospective investors to its site. So, Jensen is investing marketing dollars in a re-launch of a more fluent, easier-to-navigate Web site. "We feel our Web site will set us apart," says Mertens. "We'll be adding periodic white papers and reporting significant changes in our holdings." Mertens is committed to developing the Website to target the specific needs of his investors and tailor it to meet those needs.

"If anything, we're going to ramp up our public relations and marketing in 2009," adds Mertens. "We're going to be out there even more to alleviate market concerns and fears." That strategy includes quarterly phone calls to investors, more media exposure, periodic white papers and conversations with the press. Jensen provided media training for its entire staff and has plans to revisit the program every few years to ensure everyone stays on message. "We conduct a media tour in New York once a quarter. Talking to the press is a lot like selling. Your presence needs to be continual and visible."

Making Sparks Fly.
Robert Auer likens his fund's marketing initiatives to sparkplugs in the engine - your car won't start without them. But even with the best spark plug, all the other parts must be in good shape or the car still won't run. For Auer, public relations was the spark that set off a chain of events that allowed the Auer Growth Fund to add significant new shareholders and new money from existing investors in the fund's short history.
"At first, I thought trade shows were a waste of money.But, then I attended a Morningstar conference and met with reporters for a set of interviews at the on-site press room. One of those interviews was posted online and was 'accidentally' seen by a potential investor who is now our largest shareholder." Auer advises firms to be "out there." He suggests that firms not only attend shows, but also purchase the attendee lists and strategically mail something about their fund before and after to pique financial advisors' interest. He's found advisors mention they are stopping by the booth because of the mailings.
Distribution on the major platforms like Schwab, Fidelity and the rest are essential parts of making all the parts fit together. Auer's also supplementing those efforts with trade shows, a newly revamped Web site and frequent conversations with the press and investors. "But to be effective," he reminds us, "Web sites need continual new content."
"Cultivating deep relationships with professional journalists is key in attracting the interest of financial publications. We do a quarterly media day. Then we take our best interviews with reporters from CNN, CNBC, Bloomberg, Wall Street Journal and more and post them to our Web site," says Auer.
Recirculating that content has also created a buzz around the Auer Growth Fund. "We let all advisors who've expressed an interest in us know when we've been quoted in the press. You never know when something will resonate. We think of it as building a giant spider web."
Asked what he'll be doing differently in 2009, Auer says, "Our conversations have a much more focused message today. We're stressing that it's important to have realistic expectations in this market. We're reminding investors that this is not a short-term investment."
Auer points out that his investment process, which he has used for over 20 years managing individual accounts, has outperformed the market by as much as 30% many years. "But, the market is a bucking bronco and you have to be able to handle it," he cautions.
Watch for Part 2 later this month.
Call us at 703-894-1046 to discuss how SunStar can help you achieve recognition in this competitive environment.

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