In this episode, she dives into the importance of public relations and how it can help you advance and grow your business by understanding four key strategies, what results to expect, and what data points to track.
1) What is PR, and why it is often misunderstood in the financial services industry
2) Why investing in PR is important
3) How to track ROI for your PR spend
4) Industry trends
Doug: Hello and welcome to the Data Possible podcast presented by Discovery Data. This is your host, Doug Heikkinen. Today. Our guest is Hibre Teklemariam, Vice President and partner at Sunstar Strategic. Sunstar Strategic is a firm that provides public relations and marketing communication programs that help attract, maintain, and grow your clients. Welcome Hibre.
Hibre: Thank you so much for having me today Doug.
Doug: We're going to focus on public relations today. It's sometimes an area that's so misunderstood out there in financial services. So let's start with what is public relations?
Hibre: It's so misunderstood Doug. I mean, I tell people what I do for a living. I say public relations and I see their eyes glaze over and that's because they really just don't know what I do or what that means. What is public relations? Typically people think of it as something that a media star does. But Sunstar focuses specifically in the financial industry and we work primarily with asset managers. And so there are four areas where PR can be used. And I'm sure you've heard of the PESO model, but it's paid, where that's typically ads. There's earned, which was traditional public relations. There's social, which is LinkedIn, Facebook, Twitter, and there's owned. And that is the story that you tell about yourself that an asset manager tells about themselves. Sunstar specifically focuses on the earned portion of public relations, which is traditional PR. Which is essentially being quoted in the mainstream national financial publications, such as the Wall Street Journal Barron's FT. And that also includes radio, video, as well as financial television, such as CNBC, Fox or Bloomberg Television. And so you can imagine that's why it can be confusing to understand.
Doug: So why is it important for firms to invest in this?
Hibre: Well, it's important because it helps tremendously with branding recognition, growing your firm, and to be known as a thought leader. We primarily work with the smaller, boutique style manager. And so they tend to be on the smaller end of things, and they don't have endless dollars to do ads and all kinds of advertisement and hiring multiple salespeople. They just don't have that kind of budget. And so public relations is a very cost-effective way to get the word out there and do it in a cost effective way. And one of the biggest issues that a lot of the firms we talk to face is lack of branding. Particularly in the fund industry, we see well-established companies that just are not able to effectively communicate what they do, who they are to the outside world. And in my view, public relations is sales. It's a sales strategy,
Doug: And it's also creating the authority of the person that we're trying to do this for.
Hibre: 100%. I mean, we create thought leaders out of folks that thought they were not good speakers. And so you definitely have it right, correct. That's exactly right.
Doug: What kind of results confirms expect from this?
Hibre: Well you get reach, you get visibility, you get growth. You're seen as an industry expert which we touched on a little bit. Not only do you become a thought leader and an expert to clients and prospects and to your target audience, but you also become a thought leader within the press if you're doing a lot of media. I have reporters that contact me and ask me for specific people because they have certain expertise. Because this is someone that we had honed in their messages and we took them to the press. And so now the press gets to know them. And that's part of it. You're building a relationship with the reporters and journalists that write in these mainstream financial publications. And so they start asking for your expert.
Hibre: You know, another thing that's overlooked is, it really expands their network. Asset managers go from being not well-known, where through thought leadership you now expand your network. And there's a lot of M&A activity in the financial industry, within the asset management world. And so folks start wanting to do business with you. They want you at the table. They want to speak with you.
Doug: So if I'm an asset manager unfamiliar with PR, you've mentioned some of these, are there any other ways that firms benefit from this?
Hibre: Absolutely. A key benefit to doing PR, if you have a good public relations firm and there are many out there, one of the things that you truly benefit from is, the first thing that firms should do is really get your messaging down. Messaging is a key component of public relations and I think people don't understand this is, you don't know how many times I've sat down with key executives within firms and they all say the same thing. "We know our message, we know how to communicate it." And so we get them all in the same room and we go around and we ask each one to tell us what that is. And they all say different things. "No, we're more valued. We're more growth. We're smid, we're small, we're this, we're that." It's never consistent. It's never clear. And so there needs to be a clear story on your firm, your background, what is your value proposition?
Hibre: What are you offering? What makes you different? Why should anybody look at your firm as opposed to the many others that say they're exactly like you. And that's the goal is, being able to stand out from the crowd. And the way you do that is getting your messaging really, really down. How are you different? How are you smart? How are you not like my competitor? Well, messaging answers all of these questions. So it's really important to sit down with your PR firm and really go through this exercise to really hone in on what the key components of your message are. And then you communicate that to the world. And I'll use an example that everybody knows. Is Whole Foods known for junk food? Of course not. Is Doritos known to enhance your health benefits for you? And the way they do that is through branding. And it's really the same thing, except you have to really get your message down first.
Doug: I think you get this question a lot. Many people would say, so I see my name in the Wall Street Journal, what does that mean for my firm? So how can we track ROI and what are some of the data points that your clients look at to justify this?
Hibre: That is a really good question. And it is a question that comes up all the time, you are correct. And the way we help our clients measure ROI, there are many different ways to do it and I'll give examples later. But if you look at the publications and the broadcast print that we target, I'll just give you some examples. For return on investment, one of the ways to measure it is knowing what the outlet's target audiences who they're reaching. For example, Bloomberg radio we know has market coverage that is syndicated in the top 50 radio markets in the United States. We know that TV, television, doing television in financial typically will get you a wide range of folks that are watching. Whether it be advisors, high net worth, institutions, they're all watching CNBC, Fox, Bloomberg on the business networks. And so really identifying what platforms you're using helps you to figure out who you're reaching.
Hibre: And you can look at specifically, these outlets will publish the household income, the makeup of their audience. And so you can really see who you're reaching. Additionally, you would look at data points such as your AUM, your flows, are you getting assets coming in since you've started your PR campaign? And a tool that we always recommend for our clients to use is Google analytics. You can use that tool to really determine what sorts of press that you've done are really getting spikes up to your website.
Hibre: And we pay attention to assets under management for our clients. We're really hyper-focused there. And so when it comes to PR, it's really difficult to draw a line that says, "Hey, I did this interview and I got $5 million in." That line is more invisible. And so typically what you see is firms, that have had no assets coming in, have had stagnant assets, no one knows who they are. Once they're doing public relations, if you're doing it with a good plan in mind and good messaging, you'll start seeing those flows coming in. You can see it.
Doug: Can you give me a couple examples of clients who benefited from your services?
Hibre: Well sure, absolutely. Firms should keep in mind that if you're working with a public relations firm and they're really targeting, giving you a good PR and marketing plan with specific targets based on your goals and needs, you will be successful. And the other thing to keep in mind is making sure that the firm that you're working with, that the chemistry's right, like all things Doug, it's relationships. Making sure that that chemistry is right between your firm and the PR firm that you're working with. And that that chemistry is working, and together you can really be effective. And one of the examples I'll give you is a firm that we actually started working with during the pandemic. And we were able to grow their assets up 106% within a four month period. And we did that by really honing in on their messages.
Hibre: They had a good story coming in. They had good management, good products. It's just no one's ever heard of this firm. And so we worked with them on the messaging and we got the message out to the press. The press began to quote them and have them on their shows and using them in their quotes. And they really became thought leaders. And so they saw this significant growth and we continue to work with them. I mean, we coach them constantly and your firm should always be working with you to give you feedback and work on what you're doing. And so they're continuing to see flows.
Hibre: And another example I'll give you is, we hear this all the time. It was a firm that had been around for many years. They had a 10 year track record, two mutual funds. One was rated four stars. One was rated five stars. They were just stagnating with assets. Nothing was growing. They were at 60 million, they were stuck there for 10 years, just nothing was happening. And their main complaint is, "Well, no one knows who we are." And so again, we worked with them on messaging, we enhanced their messaging and we got them out to the press and they became a thought leader. And they were able to grow their assets from December of 2017, through August of 2019, in less than two years, they grew their assets by 132% assets increase. And so they went from 60 million to over 150 million and they continued to grow from there actually. And so it's really effective. And you can tell if you're doing something right, you get a sense for how your firm is doing.
Doug: Those are fantastic results. Are there any industry trends you guys are seeing that listeners should pay attention to this year?
Hibre: Oh, absolutely. As you know, the pandemic has turned the world topsy turvy, and we've all had to adjust. And so have asset managers and it's been a tough time. They're seeing fee compression, their costs are rising, there's a popularity amongst passive products, we all know that. And there's fierce competition, a lot of M&A activity going on. And so it's become more challenging for asset managers. And so they're looking for more ways to stand out from the competition and be successful.
Hibre: And so how do you do that when you don't have endless dollars? And PR is obviously a way to do it. But things are evolving to a more digital strategy, using social media more. More and more individuals and companies, advisors are turning to social media to communicate with their target audiences. And so this is a huge area. It's not only reliable to get interest for asset managers, but it's a great way to track engagement. It enables you to evaluate, to adjust your strategies. And again, advisors tend to be a group of that asset managers always want to target and advisors are really turning to LinkedIn and other social media platforms. So things are really going in that digital way more than ever before, absolutely.
Doug: So I'm sure your business changed quite a bit. And how do you see the industry moving forward, combining the things that you guys have done in the past with the new things you've implemented?
Hibre: Yes well, so in the past, one of the ways that we would get our asset managers to be effective is, we would take them to New York City. And I didn't mention this before, but we're very selective in who we work with because one of the components to a successful PR program is, the asset manager itself has to have the key ingredients to be successful. And that includes good management team, good long-term track record, good story, good products. And so when you have all of those, we can work with a firm like that, where we can really help them get the word out. And so one of the ways we would do that is we used to take them to New York City a lot. And these managers are coming from all around the United States, west coast, east coast, the south, north, et cetera, Midwest, a lot of Midwest firms.
Hibre: And so you can imagine a lot of travel was involved. And they weren't excited to travel. They knew they had to do it because it is part of the sales process. But it was a difficult thing to get them to commit to. Because you have to leave the day before, you're missing a day of work, these managers want to manage money, not talk to the press necessarily, but they know it's a must do. And so they come in the night before, they spend the next day, all day, talking to the press. Then they're stuck at the airport. They might have a cancellation, they might have delayed flights. It's not fun. And so one of the ways it's changed for the better is, now if we want to get a client on CNBC, all he has to do is put on his shirt and go to his home office and get on Skype.
Hibre: So it's just so much easier for these managers to make themselves available, without taking a chunk of time out of their everyday work, not being stuck at the airport and so on and so forth. It's just become, again, moving to more digital, it's really just moved to digital that's what's happened. And so in addition, one of the changes for us has been with reporters. There's also a shift there in that in the past, we relied on emails to reach reporters and producers. We relied on phone calls a lot. So you'd send an email, you'd call them, but now everyone's home, you don't have their home numbers. So how do you reach these people? So that's become a little challenging. But interestingly enough, that's also shifted to digital in that we do rely on email a lot, but we also rely on Twitter and LinkedIn to contact them. And that's been effective.
Doug: Hibre, it's been a pleasure. You've shed a lot of light on public relations in financial services. Thank you for joining us.
Hibre: Thank you so much.