Building a comms database – a guide for investment trust NEDs

It’s no wonder the old-fashioned savings scheme has gone the way of the dodo. Apart from the fact most of them offered a decidedly analogue customer experience with paper forms, passport sized photographs, scissors and glue, the way they were paid for wasn’t exactly fair: most of the costs were borne by the Trusts participating in the fund manager’s scheme.

This meant if you didn’t use the scheme and bought shares elsewhere, you paid for a service you weren’t using. A bit like paying for an account at AJ Bell but keeping (and paying for) your shares to be held by Hargreaves Lansdown! Add to that the fact most of the schemes were famously poorly run by Registrars and on the face of it, it looks like good riddance to bad rubbish.

But, and it’s a big but, they did have one colossal point in their favour. Investment trusts and their managers owned the customer databases rather than, as now, the investment platforms doing so. And most of the platforms who have been given or bought these databases are fiercely protective of them for both legal and commercial reasons.

This leaves investment trust marketers in a communications quandary. Having fought hard, and paid well, to win the heart and mind of a potential new investor the marketer will never know if/when/how the customer actually bought shares. Worse still, once a prospect becomes an actual investor there’s no sure-fire way to communicate with them. Back in the day, sending a letter was perfectly possible and, with the dawn of the electronic age, many managers gathered email addresses too.

Imagine a world where a new investor could receive a same day email from the Chair of their trust welcoming them and thanking them for investing. Or a world where there was a flow of communications: we’ve just announced a dividend; would you like to come to the AGM?; here’s the latest from your fund manager on your investment’s performance etc etc. There’s also one more critical reason for being able to communicate – to rally investors to go to the polls which can be crucial in the event of a continuation vote.

All possible with customer database, but not so today. Unless of course you build one!

The first place to start is with your very own website. Adding a ‘sign-up for more’ system is very easy. Start just by capturing the name and email address, rather than anything more complicated, and make sure the signposts to the sign-up form are well placed, visible and frequent. You will also need to offer compelling reasons for someone to hand over personal data, which means defining the ‘more’ they are signing-up for. What will they get? How frequently? And what will you do with their data once you have it? (Answer: nothing apart from use it for the purposes you asked for it, and you will look after it was as if it were your own child!).

Whichever database tool you use, make sure it’s capable of sending an automatic and immediate response to a new sign-up, reassuring them they are in the system, but also thanking them for taking the time. It also pays to ask users to validate their email addresses by clicking a link – that way you can be more certain that the email addresses you’re gathering are from actual humans and not from the army of bots crawling the web.

That’s a great starting point, but with the best will in the world you’re unlikely to be troubling your database company for more than a few hundred rows of email storage. So the next thing to consider is issuing a Section 793 notice to the investment platforms. This compels them to provide to you the names and addresses of all those holding shares in your company. You can’t use those details for marketing purposes, but you can certainly write to your shareholders about company business, for example to make investors aware of an upcoming AGM. In the same communication you can also provide details of your email communications opportunity, and the same compelling reasons to sign up along with a mechanism to do so. A 5-10% response rate is not unusual.

And then the final piece in the ‘building a database’ jigsaw is to advertise your sign-up facility everywhere you can – at events, on all collateral, and you could even have it in any display advertising.

Once you have captured some email addresses, then ensure you deliver timely, interesting, shareable and reassuring content that your investors (and prospects) really want to hear. Harder than it sounds, but that’s an article for another day…