Web sites of global firms geared towards institutional investors are still lacking in several areas despite strides in the right direction, according to a yet-to-be published report by electronic business consulting firm kasina of New York.
Some of the basics have improved, but budgetary constraints and a shift in the approach to site offerings has led to less-rapid advances in other areas of site building and thinking, said Derek Evans, a senior consultant at kasina.
Contact information and portfolio manager profiles have shown up on more of the institutional Web sites since kasina last authored a report on the subject two years ago. Nearly two-thirds, or 63%, of the sites have portfolio manager bios available, up from 29% in 2001. Yet product descriptions and explanation of firms' competitive advantages are notoriously absent.
Evans indicated this gap could be the product of the economic climate and the three-year bear market. When performance numbers are down significantly, firms may be less inclined to promote those numbers, even if they do stack up well against competitors. "Anything related to ratings or positioning their offerings versus another firm is lagging," Evans said.
One of the most surprising findings is that firms still don't provide details about their products on institutional sites, he said. While 96% of the companies surveyed and 100% of those kasina ranked in their top 10 provide general company information on their institutional site, a mere 25% provide product profiles.
The white paper, which is due out at the end of this month, examined the Web sites of 75 global firms with assets of at least $10 billion. The authors narrowed down the field of 75 with various criteria and conducted interviews with several individuals from the finalist firms and institutional investors.
With budgetary constraints much more a factor than a few years ago, firms are building upon what they have already designed for their institutional Web sites, rather than adding bells and whistles. In years past, firms had often turned to various Web-based platforms to help improve their marketing and distribution.
"In the past, companies have gone out there to build things just on hype. Firms are now really thinking about the budget dollars they have available and asking what makes sense," Evans said.
However, this revelation is not solely due to a tightening of the corporate purse strings. It also comes from the realization that the "Field of Dreams" mantra of "If you build it, they will come," does not apply, according to the kasina report. Evans said that firms must actively use their existing tools to build their client base, instead of just building a super site and hoping customers will come.
"You need to have a quality Web site to do the basics in relation to client servicing, but from there, you can't expect that from building the features that people will [automatically] visit the site. It has to be supported by the marketing team to get the awareness out there," Evans said.
However, despite these deficiencies, firms are still finding ways to try and get their message out. Like many other firms in the corporate world, they are expanding beyond their basic traditional Web site capabilities to aggressively build their e-mail marketing strategy and Web conference capabilities.
Usage of these sites is still very low and the ability to manage accounts online is almost non-existent. Less than half, or 42%, provide investors with access to accounts online, kasina said. Lower than 10% of sites have online transaction capabilities.
"I think we're going to see more and more companies using e-mail to promote different features on their Web sites. E-mail as an e-biz tool has really come to the forefront of a lot of companies' strategies. It's a matter of the Web team working with the sales team to get promotion and adoption," Evans said.
Despite those strides, e-biz managers need to expand their sites' capabilities to attract new clients, according to kasina. "I think most e-biz managers are still seeing the Web site as a client servicing tool, not a prospecting tool," Evans said.
Firms are now beginning to turn a more watchful eye towards profitability of their customers and are segmenting their customer base accordingly, kasina said. The firm said it is looking at the growth of what it is calling "intelligent distribution" although a very small percentage of the industry now uses this method.
Intelligent distribution as defined by kasina is the process that asset management firms should use to collect and scrutinize customer data and then convert that data into valuable segmentation information. They then should use that info to implement effective business processes to maximize profitability.
Evans said that through the examination of the profitability of customers, firms can think about how to develop targeted marketing strategies. A mere 5% of firms have developed these strategies, but kasina believes intelligent distribution will catch on.
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