Leverage Your Market Sizing to Raise Your Profile in 5 Steps

If you already do market sizing, use that as fuel for content that raises your firm’s profile.

When it comes to business, certain bits of information are essential for us to put a firm or its products into context. The size of the market is one such tidbit. It allows us to grasp how a firm ranks versus its competitors, shows whether its share of the pie is growing or shrinking, and how the pie itself is growing or shrinking.

Picture of pie
Pictured: The pie (that I made myself that was every bit as delicious as it looks)

Show me the pie

Market sizing is curious activity. It can consume a lot of resources and serve as a key input for strategy and investment discussions. It’s also closely guarded and rarely communicated outside of the company. There is, however, a reason to use key figures from the exercise: namely, to gain credibility with stakeholders including clients, prospects and the media.

Minimum required information

In some cases, the size of the market is a basic data point that you have to provide prospects in order to gain their custom. In financial services, investors will want to know how an asset class compares to what they already hold in their portfolio. Institutional investors are looking to gauge capacity issues. Any basic case for investment type of material will detail both the primary and secondary market volumes: the first in total outstanding and the second in yearly amounts. In other sectors, clients may be completely indifferent to these considerations–though you can still leverage the data to gain an advantage.

Here are a few tips for turning market size figures into thought leadership:

1. Choose the market

You have 2 options: either size the market for your product (choose 1 category) or for your clients’ products (again, choose 1 category). With the former, you position yourself as being knowledgeable about your own activity–a step down the path of demonstrating expertise and later thought leadership. With the latter, where your clients compete globally and their production volumes (supply) have an impact on prices (demand)–you’re offering them a kind of customer service to help them better understand their industry and competitive context (B2B service).

Pick one. I’ve seen either work for different firms.

2. Confirm the target

I meant to do that.

Is there a common understanding of annual market turnover? For a product such as smartphones, the answer is clearly yes. Those manufacturers release regular reports on the number of products sold. For public firms, it’s a clear factor for revenue and earnings projections closely followed by analysts. No mystery there.

If you’re tackling more of a niche sector that may be highly fragmented and there doesn’t appear to be a trusted source of this data, that’s a sign you have an opportunity to build a common reference point for the industry. (Bear in mind that consultants and market research firms will also be fishing in these waters).

3. Pull back the curtain

Is anybody out there?

Share some of your key figures with the outside world. Start with where you’re at today, or perhaps fill in the past few quarters or years to provide context and show a trend. Be descriptive. From there, you can begin to discuss trends and factors that influence them. It’s an opportunity to speak to clients about those trends, and for you to solicit their views. For highly regulated or compliance-sensitive sectors, it gives you the chance to talk about something other than product when you have a public platform (live event, webinar, etc.).

4. Be bold

If you’ve got the courage and internal support, give your views on where the market is headed in the future. Make a projection. Caution: this one can be intimidating for many folks. If you can stomach it, you’ll benefit from the anchoring effect. In essence,  Being the first to put a number out will tie the discussion around your reference point. Clients and journalists may go around asking your competitors for their views/estimates, but largely to compare with your figure. You gain the lead.

5. Rinse, repeat

The source of all marketing strategy, less dandruff

Marketing basically follows the instructions on your shampoo bottle. Repetition is key, so insert your market figures into discussions with clients, journalists, etc. And if you gain traction, plan to repeat the exercise on a regular basis (probably quarterly or yearly). Good luck.

 

Copycat Marketing Drives Uniformity within Industries

Recent observations of companies all copying the leader in their field suggest that bland marketing will haunt some sectors for decades.

What’s the first rule of marketing? It’s hard to say. But differentiation clearly goes to the heart of the matter. If brands and products are all alike, then they’re commodities. Customers then buy strictly based on price, personal relationship, or other considerations. When that happens, you can drop your marketing budget to zero and let your team go (just make sure someone’s left to stock the shelves or maintain your e-commerce presence to keep product moving). Margins suffer. Followers become vulnerable.

So, why do some companies try so hard to mimic exactly what their competitors do?

Copy & paste strategy spotted

When I developed an editorial style guide for a particular company–a clear leader in its industry–I thought that it would help the firm’s employees to produce more consistent and grammatically correct content for their audience. That worked. Within a few months, however, one of the firm’s competitors began using many of the conventions that were being applied to external communications: rather unusual, brand-specific ones that would not otherwise find their way into written materials. What’s more, several competitors began to ape the key messages the firm had honed in recent years. The materials from various outfits became similar as to be indistinguishable. The firm’s sales force even mistook competitors’ media pieces for their own.

Not by the book: herd mentality over differentiation

As any student of business will tell you, standing out from the herd is key to competing successfully. If you can’t be the leader, find a niche and excel. While there will always be a cost-cutter trying to undermine the market on price, that’s a losing strategy (at least in theory).

Following the leader may save a company money in terms of R&D and marketing innovative new products to the world, but ultimately leaves those firms vulnerable, having considerably weaker margins. There are plenty examples of dominant leaders. Think Apple, Amazon, Google. Who’s second to those firms? Don’t worry if names don’t come to mind. An industry-leading firm arguably commands a higher market share and margin today than in previous decades.

Copycat survival: long zombie march

If the copycats are vulnerable, how long can they survive? I would contend that these follow-the-leader types can hang on for decades. The greatest risk lies in periods of market consolidation. (The activities of companies such as 3G Capital, known for swallowing big fish and implementing strict cost-cutting, suggest that even publicly-listed leaders are at risk.) If they can navigate that difficulty, the future looks pretty bright. In high-trajectory industries with habitual double-digit growth (yes, they exist), there’s enough money to be made that simply aping the number one can be a profitable business. From what I’ve seen, this entails offering the same product/service claims at a somewhat lower cost. From a marketing perspective, I can only lament the lack of excitement and creativity when companies eagerly play “me too” to exhaustion. Creativity, please!

Please add your comments. Have you seen any egregious copycat marketing?

Why Your Next Investment Writer Will Be a Machine

The next time you need an investment writer, don’t bother calling HR. That was BEFORE. Before a firm in Chicago made software to report out baseball game stats. Before artificial intelligence began writing stories. Before AI went from sports to finance. Before algorithms jumped from high-frequency trading to monthly reports.

Generating stories at the click of a bottom based on deep data sets–that’s NOW–and Chicago-based Narrative Science has been a pioneer and the most visible face of this fin tech gadgetry since 2010. ‘Gadgetry’ might be the wrong term, since this development promises to upend asset managers’ reporting processes and force a rethink of the investment writing function, along with the need to hire an actual human being for an investment writer role.

 An umbrella for reporting season

With this new tool, Narrative Science CEO Stuart Frankel says producing something like an investment strategy [pooled fund or SMA] report “goes from the job of a small army of people over weeks to just a few seconds.” As anyone familiar with the month-end and quarter-end rush periods knows, this represents a dramatic improvement over the status quo.  The firm says that their asset manager clients have been able to ‘reduce the number of days spent producing portfolio commentaries by 50% to 75%’ delivering reports that are marketing-approved and compliance compliant.

If it all sounds to good to be true, that’s not the word I would use. In my opinion, it’s something else entirely: eery. I actually got chills watching the 3-minute video below on how Narrative Science’s Quill is being used to expand Credit Suisse’s investment research coverage. The algorithms identify trends and report in plain (analyst) language what’s going on with a given company (eBay in this case).

Astonishing.

(For website owners, you can enjoy Quill Engage –their Google Analytics app for site analytics– for free.)

 The new wave

Turning data and analytics into stories clearly has momentum. In March 2014 the Financial Times reported that Fidelity was testing technologies offered by Narrative Science and Kensho, among others. Narrative Science counts American Century Investments and Nuveen Investments along with T. Rowe Price, Credit Suisse, and USAA among its clients. The firm’s portfolio commentary tool for equity strategies had 15 clients by November 2014. A fixed income version was recently made available. (Personally, I’m curious how the package handles non-benchmarked strategies in either asset class).

 Welcome, our new robotic overlords

Kensho’s software, Warren, may be more ambitious in that it allows investment firms to test ideas by unleashing what CEO Daniel Nadler calls ‘a quant army.’ With these technologies, it would seem to follow that the need for flesh-and-blood investment analysts, writers and editors would be reduced significantly. That’s a bit premature. Adoption will take time. Piecing together the headline story on a stock from a bunch of data is impressive, but it doesn’t provide a buy/sell/hold value judgment. It will clearly reduce the need for manual low value-added tasks such as number crunching and descriptive writing considerably. It appears that Narrative Science has for several years been combating the perception that their technology will enable firms to kick workers to the curb. In 2013 Frankel said “It’s less about replacing people, and more about leveraging those folks that are already there.” To be fair, I know some veteran writers and analysts who are overworked and looking for more challenging, creative tasks. Perhaps these new tools will help them make that shift.

Tomorrow, the world

No doubt the AI technology will improve as time goes on, and there are several areas for development. For one, I have yet to see any information about multi-asset or alternative strategy capabilities, though that’s probably just a matter of time. Second, while English is hands down the lingua franca of finance, asset managers highly active in Europe and Asia would have a hard time refusing a reporting tool that delivers material in multiple languages with speed and precision. Once the technology overcomes these hurdles, you can expect to see it implemented everywhere. The question will then become whether these tools become victims of their own success. For reporting, it’s easy to imagine the entire industry racing to reduce cost pressures and improve competitivity. But when it comes to testing investment ideas, it’s hard to believe that firms will be willing to use the same testing environment as their competitors and run the risk of all using the same playbook.

Considering an Investment Firm Merchandising Strategy? Really?

It’s not uncommon for consumer-oriented firms to launch a merchandising strategy. People who purchase a shirt or a hat and wear your company’s logo pay for the right to advertise, something you probably shouldn’t discourage. But it’s nearly unheard of in the investment industry.

Now, Vanguard has made a merch strategy a thing for investment firms–and the Valley Forge, PA-based company is quite likely the first-mover in this space. As announced on Twitter today:

Financial firms have been throwing goodies and giveaways at clients for decades. But never (to my knowledge) have they opened an online store like the one Vanguard has. It’s brilliant because every firm already has a gift procurement function–this move allows for a bit more volume buying to offset at least a tiny bit of the cost of all that free stuff.

Of course, it’ll never be a money maker–but that’s not the point. It demonstrates the ridiculous strength of their brand in a sector with hundreds of players that struggle to differentiate themselves from one another. So for most firms, a merch strategy falls way down on the list of marketing priorities.

 

 

Scaremongers, Be Afraid

A lot of B2B sales pitches boil down to the traditional problem/solution framework. While most firms put their focus on differentiating their solutions from competitors, some take another route and choose to embellish the problem. Portraying a client’s problem as treacherous, insurmountable and otherwise extreme leads to certain and horrible doom. The really awful kind of doom that’s bad for business.

One company’s claim jumped out at me today: in 97.5% of all cases worldwide the problem (for which they happen to offer a product) is present. That’s a ridiculously large number. I can’t even think of a problem so common that is essentially impacts everyone on the planet. (Not that everything is perfect: nearly a quarter of the global population is considered impoverished according to one multidimensional measure). It baffles me to try to understand why someone would depict a problem as so omnipresent. The probable answer: the company feels outgunned in terms of their product offering vis-à-vis the competition, so they turn to scaremongering in hopes of drumming up greater and more urgent demand.

Scared CTA-less

A big issue I have with the scaremonger approach is that it, by definition, incites fear–a stress response. There’s already enough of this in the press and elsewhere polluting society. It can also be counterproductive. While a little bit of anxiety or concern can motivate people to take action, faced with something REALLY big and REALLY frightening, people tend to freeze. Think deer in the headlights. No one wants to try and tackle a problem that cannot be solved. Think global warming. So instead of driving people with a call-to-action, scaremongers actually sow inaction.

Oddball perspective

The reality is that scaremongering can work really well in just one circumstance: when the entire market does it. If every player in the industry tells clients that tomorrow is a hopeless wasteland, there’s a chance that after enough time and repetition, they’ll start to believe it. But if most firms define the problem in narrow, realistic terms that clients understand and can themselves quantify then the doomsayer quickly earns a shiny, new tinfoil hat and is discredited in the marketplace. The more you insist that everything is terrible and clients’ experience dispels that myth, then the more credibility you lose in the eyes of your audience.

Be very afraid

Over the long term, scaremongering is a losing strategy. Firms that use this tactic may garner more attention initially, only to see their brand’s credibility plummet. Engaging clients based on their real situations and an honest appraisal may not always be easy, but it builds a brand reputation that people will value.

Don’t Differentiate Yourself Into Irrelevance

Most companies strive to prove how they’re different from the competition. Sometimes, the impulse to be different eclipses the need to be something much more important for clients: relevant.

A while back a marketing exec from the fund industry recounted her firm’s efforts to set their new product apart from similar ones in what was, at the time, a relatively new category. First observation: the whole thing was very product-centric. There’s nothing wrong with selling product–it pays the bills. But after enough years of content marketing, going out with a message like “buy this now” makes me a tad bit nauseous.

Making a list

Second observation: she rattled off a laundry list of product features that separately and taken together were expected to make their product different. This is where things began to disconnect. On a technical level, each of the features was sufficiently unlike what the competition had. But those features didn’t matter because they didn’t connect to clients’ needs.

An answer

“Different’ doesn’t sell. It doesn’t sell because it doesn’t get to where it should go: to the customer. Differentiation at the product feature level is great, when you can get it (not everyone can–and there brand and client service can prove pivotal). But what really matters is the outcome. Think better, not different.

In the end

Customers need reasons to purchase, so firms toss up unique selling points (USPs) in hopes that something sticks. Better performance, better client outcomes–cheaper, longer lasting, more effective–what have you–these are differences that count. It’s about time that firms stop drawing distinctions without difference, and focus on what matters to clients.

My $1,169 Roth IRA Mistake

It’s not much fun to admit a mistake, especially when it cost me $1,169. If anything, sharing the story will hopefully help you avoid the same fate. You see, back in the late 90’s I put some money into a Roth IRA account holding mutual fund shares that focused on tech stocks –if you can believe it– because, yeah, it was the 90’s.

Quick reminder: a Roth Individual Retirement Arrangement is a retirement vehicle that allows individuals to invest non-deductible (taxed) income now in order to make qualified tax-free withdrawals at the age of 59.5 (subject to certain restrictions, see the IRS’ webpage for more info).

My investment faced some real headwinds with the tech bubble burst, the early 2000s recession and the 2008 global financial crisis all playing havoc with the basically nonexistent returns. After an extended lost decade my investment has finally made some small gains thanks to U.S. stock market performance since 2013.

SPX daily 5y

No one can control the market. Arguably, it would have been advantageous to time my investments better by going in and out of the market at various points or choosing the securities bought more carefully–though, to be fair, market timing is notoriously difficult even for professionals while also incurring greater transaction costs and pretty much every asset class or instrument available took a hit in 2008 leaving few, if any, safe havens.

In fact, my big mistake was paying excessive charges. On my initial investment of $3000, I paid $1,169 in fees and expenses that could have been completely avoided. Let’s do the math.

Account fee

I opened the Roth with a financial advisor which seemed like a good idea at the time since I was just finishing high school and knew next to nothing about finance or investing. The account was subject to a $40 annual maintenance fee for each of the 15 years for a total of $600. The advisor put the money into a mutual fund where, as it turns out, the same fund company would have only charged a $10 annual maintenance fee with a $10 one-time setup charge–which would only amount to $440 wasted except for the fact that many brokerage firms and asset managers offer no-fee Roth accounts. Amount wasted: $600.

Load

I ended up in a retail investor share class with a high front-end load of 5.75% on the $3000, or $172.50–most of which goes right into the fund management company’s pocket. There are circumstances where a front-end load may be appropriate when used by the fund company to cover upfront transaction costs of buying securities in certain markets. This was not one of those situations. In fact, the same firm offers a no-load advisor share class although my financial advisor, a full-service brokerage firm, did not opt for it. (The two share classes had nearly identical expense ratios, so all things being equal this was the poorer choice). Cumulative amount wasted: $772.50.

Mutual fund expenses

The asset management industry is highly competitive and the rise of passive index-tracking strategies has put further pressure on fees. By and large, investors are better off paying less in fees and expenses when possible. While mutual fund annual expense ratios vary anywhere from 0.08% to 2%, the average annual expense ratio for target-date funds (a set-it-and-forget-it one fund solution for many investors) is 0.84% according to Morningstar.

My financial advisor put my $3000 into a large cap growth fund that coincidentally charges 0.84%. However, having done my own research (because my advisor only showed interest in running transactions on my account and not providing advice–as described here) I found a diversified target risk growth fund of which I’m rather fond for only 0.18% or 18 basis points. Having instead invested the money in the less expensive fund would have generated cost savings of $301.50 based on a rough asset-weighted estimate of the cost differential (66 bps) over 15 years.

I’m not naming the funds here because it’s an apples-to-oranges comparison, and that would be unfair. Performance-wise, the large cap growth fund slightly outperformed the diversified target risk fund over 15 years, although the former is down -3.40% year-to-date while the latter is up 0.53%. Personally, I had to opt for the broader diversification that comes with a mixed stock & bond portfolio and international exposure. Cumulative amount wasted: $1,074.

Exit fees

If it’s not yet clear, I am decidedly underwhelmed with my soon-to-be ex-financial advisor which is why I moved into a no-fee Roth with my preferred asset manager. I’m not sure if the feeling was mutual because, lo and behold, the advisor had a parting gift for me: a $95 termination/distribution fee tacked onto the end of our relationship. Termination fees can range from $50 to several hundred dollars. The best way to avoid them is to pick a good provider and stick with them for the long haul. Total amount wasted: $1,169.

A pricey lesson

While my experience cannot be generalized, over the years researchers have noted that bringing financial advisors into your investment decision-making can reduce performance on both an absolute and risk-adjusted basis (lower returns and lower Sharpe ratios) while incurring higher costs. Essentially, the best way for many of us to get the most from our investments is to do the homework ourselves.

Outrageous Question From My Financial Advisor

So I was speaking with my financial advisor about an account. I expressed an interest in moving out of the current mutual fund and into a more risky asset class with a more cost efficient investment strategy.

Here’s what I can piece together a snippet of that discussion:

———————————————————————————————————–

Me: “I’d like to move out of the current strategy. I’m more interested in small caps, real estate and frontier/emerging markets. I’d be happy with an ETF or a mutual fund provided that the fees are low. Would you mind sending me a few suggestions?”

Advisor: “So, if I understand correctly, you’d like something more aggressive?”

Me: “Yes, aggressive–that’s it. I’m comfortable taking on more risk.”

Advisor: “Well then, I can take care of that for you. If it’s okay for you, give me the go ahead and I’ll provide you with a trade confirmation.”

Me (quite surprised): “No, that’s not necessary. I’d like to decide or at least sign off on where my money’s going. If it’s too much trouble for you to put together a proposal, I can do the research and make the selection myself.”

———————————————————————————————————–

There are no gaps in this transcript–in a few short exchanges (admittedly after exchanging initial pleasantries) the conversation veered into action mode  — the advisor had jumped the gun and was ready to trade, no questions asked. It just felt so wrong.

I had asked for a few suggestions and the advisor offers to move my money into new products without telling me upfront which ones he’d select. I’d been fairly specific about which asset classes I’d consider and wanted have the advisor’s opinion. But the advisor’s WAY ahead of the game–ready to send me the trade confirmation –deal done, game over– without any hint as to what will be in the new portfolio. No indication of the asset class(es), which asset manager(s), ETF vs. mutual fund, active vs. passive strategy or total expense ratio.

Is this really how advisors provide advice these days?

Unbelievable.

The Easiest Market Research Mistake To Avoid

“The minute you start compromising for the sake of massaging somebody’s ego, that’s it, game over.”

– Celebrity chef, Gordon Ramsay

A while back I was asked to provide guidance on a readership survey being conducted by a firm to collect feedback on their flagship print publication for clients. I’m a big fan of market research, so I always latch onto new questionnaires and novel response formats that happen to come my way. In this instance, the survey effort hit a rather significant stumbling block.

Pictured: a stumbling block

A multiple, limited choice

The problem that emerged from the short and simple questionnaire hinged on a single question that asked respondents with which frequency they would like to hear from the company about topics judged relevant to them (as judged by the firm). The possible answers were pretty straightforward –weekly, monthly, quarterly, etc– though there was one seemingly slight omission: clients could not choose a ‘none’ or ‘zero communications’ option — meaning that they had to receive something from the company.

Allowing for all possibilities

It may not seem like a big deal that a respondent cannot choose to opt-out of communications, though in most countries this is a minimum legal requirement for marketing communications and in Europe the burden is higher due to requirements that the recipient opt-in for receiving messages. Legal considerations aside, I felt that an overly restrictive set of answers could show the firm’s unwillingness to accept the full, honest client feedback and potentially signal disrespect.

My advice was to add a ‘zero’ (no communications) response option out of courtesy for respondents. This is, incidentally, best practice when producing questionnaires.

Letting ego get in the way

One of the directors at the firm in charge of approving the survey felt that clients would never choose to opt-out of communications and decided to have the zero option removed from the frequency question’s possible answers. He couldn’t accept the fact that some clients want to be left alone. Despite my appeal to reintroduce the zero option, the survey was deployed without it. Two months later at the end of the response period, the response rate was rather poor. This alone might have indicated that there was an issue with the survey design. The actual responses dispelled any doubt, with 10-15 percent of the respondents providing angry or negative comments–most of which focused on the issue of frequency. Out of frustration, a number of clients had taken the liberty of creating their own zero option, heavily underlining it and expressing strong dissatisfaction with rather harsh words. Others more politely asked to opt-out. (Mental note: if your client survey incites anger, it’s time for some serious soul-searching).

Keep an open mind

Soliciting client feedback means preparing yourself to hear it. It’s important to allow your audience to freely and fully express themselves–even if you don’t like what they might have to say. Demonstrating the ability to listen to and fulfill clients’ needs is the basis for successful client relationships.

If you’re interested in the next step following a readership survey, have a look at this story on how to re-launch a print publication.

Sound Check: Where Financial Firms Struggle With Social Media

Adolphe Bitard telephone

Even financial service firms that have been slow to adopt a social media strategy have moved passed the should-we-or-shouldn’t-we question and are now dipping their toes into places like the Twittersphere. Despite this positive trend, some firms are still struggling to find their way in this new environment.

I use the term ‘struggling’ to indicate several unwanted outcomes. The first, a much more common issue firms face when delving into the social space is like open mic night at a coffee shop or comedy club. Anyone with enough courage can stand in front of the audience, although what’s spoken into the microphone typically falls flat for one reason or another. For individuals, it can be lack of preparation or experience. For firms using social media, it could be one of those too, in addition to more fundamental roadblocks.

Escaping the sound loop

I’ve witnessed a company set their social media strategy, staff the team and then get very little traction towards meeting their own objectives. In fact, firm’s social media streams quickly got stuck on repeat. The whole exercise became route repetition of the same few updates each week. We’re talking about word-for-word copy & paste jobs of the exact same sentences. Every. single. week.

Image credit: beardtoday-gonetomorrow.blogspot.co.at

Sigh.

Forget for a moment that the main premise behind Web 2.0 involves the ability to exchange information instead of merely projecting it out into the ether. Just think about this for a second. If you met with a person who said the exact same thing every week, you’d quickly call off those meetings because you’d know upfront what would be said. What’s more, you’d end the discussion with the distinct impression that you weren’t being heard–since no matter what you say, you’d expect another copy & paste post next week. That’s not a discussion. And it doesn’t leave room for engagement.

Warming up the mic

In this particular case of endless copy & paste, the firm tapped a technical web expert to lead the social media media effort. The decision seems logical, since these are the people that have the most in-depth knowledge of website building, SEO, etc. However, the challenge for web techies is that often do not represent a company’s frontline storytellers — the public faces that put out views and interact with clients, prospects and the media. As such, they can face significant challenges when using these tools of engagement and dialogue due to the fact that this had not been something that had been asked of them in the past. It can represent a steep learning curve that MUST include entail a break from 1-way communication (where the sender speaks and the receiver listens).  Social media requires the opportunity for 2-way communication.

The essential social media learning curve. Image credit: Ron Koller

Number One Emcee

The ability to pique an audience’s interest and deliver web-friendly fodder for engagement will in large part determine the success of your social media program. In my view, we need to think about a social media manager’s role not as the person on stage with the microphone, but as the master-of-ceremonies who ties together a string of performances mostly by managing the transition. This means adopting an investigative journalist’s mentality, navigating the entire organization to showcase frontline figures –the company’s leaders and experts– and packaging the show for the audience.  Bringing in marketing and press teams can help.

Noise complaints

Many financial service firms are subject to strict regulations not just regarding how they conduct business but also how they communicate with regards to which intended audiences they address as well as the content of their messages. As a result, some firms are hesitant to say much of anything on social media lest they incur the wrath of their own compliance teams, or worse, their regulators. Truth be told, given the social media presence of so many financial companies today, it’s hard to argue that there are any deal-breakers that would keep your firm from being able to use these tools. That said, it’s still a good idea to steer clear of discussions about your firm’s products or services. Not only do audiences hate the hard-sell approach, but compliance teams tend to hear alarm bells as well. Personally, I think this is a relief for most firms often focus a bit too much on themselves and not quite enough on the fact that their offer touches upon their clients’ major life decisions e.g. education, retirement, estate planning, etc. Turning the focus a bit more towards customers’ life experiences could bring a breath of fresh air to many firms’ communications.

Don’t forget social listening in your social media program Photograph: Ronald Grant

Sound check

Another and much less frequent issue arises when a firm faces the audience’s heated wrath. Bands use the sound check before a performance to ensure that their instruments are connected, properly tuned and that sound levels are where they need to be. Recalling the importance of 2-way communication, a social media sound check means listening to what the audience is saying about your firm and your industry. Not listening can get you into trouble, as JP Morgan Chase found out with their planned Q&A on Twitter back in November. Using the hashtag #AskJPM, the firm solicited questions for their vice chairman. A deluge of hostile questions ensued (here’s the NYTimes recap) and JPM called off the Q&A session. The lesson: make sure you’ve got a social monitoring system in place as part of your social media program. Many monitoring tools automatically report on whether your brand’s mentions have a positive or negative tone. It’s important to know where you stand with the audience before opening the door and inviting them to throw virtual tomatoes.