LAS VEGAS-Fund companies are using new Web 2.0 technologies and customer relationship management (CRM) software to leverage relationships with financial advisers, according to experts at The National Investment Company Service Association Technology Summit 2007 last week.

The new tech tools include podcasts, improved websites, streaming video and blogs.

In conjunction with more holistic data mining from existing CRM systems, funds will be better equipped to stand out in a competitive marketplace.

"Companies have a lot of good data on hand now, but the challenge will be to become more effective about customizing it," said Sean Carroll, a consultant at kasina and moderator of "Leveraging Technology to Facilitate Sales."

No longer is it sufficient to maintain a basic database of sales contacts. Instead, fund companies must take the next step and customize the data to improve communication with advisers in each interaction.

Carroll pointed out that the challenge for the mutual fund industry is to determine the business objectives of their marketing programs. Upon making that determination, firms must identify the hardware and software packages that will work best to implement their vision.

Brian Stetson, senior vice president of e-commerce and corporate systems at Putnam Investments, said the role of a fund company's CRM system is to react to a financial adviser's individual needs and make sure they only have to state their problem or need once in order to satisfy their request.

One marketing approach Putnam uses is to reach out to financial advisers when there are significant changes in the market, Stetson said. Since the market is always in flux, this provides a steady stream of opportunities to contact advisers, he said.

Jodi Kaminsky, vice president of eMarketing at JPMorgan Funds Management, said that fund companies must understand how financial advisers make emotional identifications with what are basically commodity products. She said her firm's success in communicating with financial advisers is tied to an understanding of these personality-based financial considerations.

Despite being part of financial behemoth JPMorgan, Kaminsky said that only 43% of advisers polled knew that JPMorgan sells mutual funds. She described the relative merits of direct mail and e-mail campaigns to contact advisers. One finding, she related, was that a second wave of e-mail outreach to selected targets generated a 10.23% response rate, far above the response rate achieved by two-part direct mail campaigns or a single wave of e-mail outreach.

However, she cautioned that the Achilles heel of e-mail marketing campaigns is the need to have accurate e-mail addresses.

Kaminsky also emphasized the need for clean data to enable the more sophisticated uses of CRM. She described how JPMorgan outsources some data cleaning tasks to a third party, which helps the firm use the information it has on its customers more effectively.

Susan Matteson King, managing director and head of U.S. retail marketing at Legg Mason Investor Services, described her firm as an unknown fund company with $1 trillion in sales. However, she quickly added, the Nov. 1 launch of the Legg Mason Financial Advisers website will increase the company's visibility.

"The site will be a centerpiece in our effort to clarify our brand," she said. Legg Mason bought Citigroup's mutual funds group in December 2005. She traced the brand confusion problems with the group's many product lines as a result of that merger.

While Legg Mason had thought of itself as a producer of financial products, it is now emphasizing becoming a "thought leader" for the industry, Matteson King said.

"We are concentrating on becoming the top solution provider to financial advisers," she said. "We're seeing a paradigm shift towards quicker access and a more bullet-point oriented approach."

Panelists concurred that such new technologies as podcasts, streaming video and blogs will become more mainstream in reaching out to advisers.

Beyond the wave of such new devices, panelists discussed how these new platforms for information will affect the type of information being delivered.

Matteson King said that it is no longer enough to post PDF copies of marketing materials and other communications. By the same token, she also said fund companies should offer a customized view of their data, rather than a general view, for the individual financial advisers.

The panel debated the merits of using inducements to encourage financial advisers to use these new technologies. Some members were in favor of methods of gentle persuasion to accomplish this goal. Others took the position that increasing the effectiveness of advisers in their practices should be motivation enough.

In a later presentation on "Driving Business Value from Web 2.0" at the conference, Rod Smith, vice president of emerging Internet technologies at IBM Software Group, raised the issue of the limits of allowing customers to manipulate corporate data feeds.

He said that as much as business leaders want to reap the benefits of the increased collaboration and communication offered by new devices and systems, they must strike a balance between enabling users to customize information and protecting a company's content and brand.

One compromise Smith suggested is to allow users to customize data, but control when new layers of information are released.

(c) 2007 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

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