We admired Vanguard on Tuesday for raising a "yellow flag" on how far the markets have come and specifically for commenting on the year-to-date returns of four of its funds.
"It is important to note that Vanguard is not making a call that these funds or any particular market segment are headed for decline," the Web site article said. "Experience tells us, however, that 'hot' markets eventually cool, and thus we encourage investors to have realistic expectations for both risk and reward going forward."
It's the kind of move that inspires brand fandom, and in fact 23 users gave the article an aggregate of four stars on the Vanguard site. Nice.
But then we checked out Vanguard's Facebook page, where the $1.24 trillion investment management company has 3,500 fans. (That's off the charts for the few investment management companies that have a Facebook page but ridiculously low for a top brand.)
Nope. There was no reference to Tuesday's article, and that makes sense since Facebook isn't where an investment manager would comment on its products. Maybe it was a lot to expect comments on Vanguard's warning. Even though the statement was reported on in The Wall Street Journal.
But what we saw instead is what we'd recommend any asset management company review prior to launching a Facebook page with comments.
On Facebook Wednesday, Vanguard posted what seemed to be an innocuous poll asking, "When do you think the Dow will break the record it set in October 2007?" Many of the 18 comments posted by Friday afternoon were just cranky. And then we took a look at another recent post about College Scholarships from Scholarship America, this one with 34 comments. The tones were consistent with what we've seen as we've checked in periodically on the Facebook page.
Below are screenshots of comments clipped out of the two posts. The top two are in response to the poll and the bottom two more substantive on the scholarship post. What we're not showing are the few comments that spoke up for Vanguard in both cases.
Feedback isn't going to scare away the largest fund company, which has long aligned with investors' interests by offering low-expense products (and is this industry's leader in social media). Nothing being said was damning; Vanguard can take it--and only take it, since they have a policy not to respond. And they are posting some conversation-starters that are engaging people positively.
Also note that we don't have a view into what consumers say directly to Vanguard or to Vanguard's customer research, just what we can see aired out on Facebook.
The question is: Is your company ready for this?
As much as those working within the industry want to move past the devastation of last's year market collapse, the general public, investors and maybe financial advisors aren't over what happened. It's evident in the feedback on the Vanguard Facebook page, and in the comments on investment-related articles on media sites. They may be uncertain or distrustful of the industry as a whole or of your company in particular.
Please don't underestimate this when you're considering social media. It's only in a perfect world where you'd start a conversation about a specific initiative, and all would be on-point and complimentary. Given a forum, the public will say what's on its mind, related to your topic or no. They are going to comment on how your company spends money, where you place your priorities and how you treat your customers and employees.
For that reason, if your business or customer or public relations need fixing, we recommend Marketing help get to the root of that first. If social media is the answer for addressing your known issues, great. But don't let it lead.
Online and in a forum you don't control, expect to have to win over your public. Expect to have to be authentic, transparent and accountable to a whole new constituency that may/may not resemble your target market.
If you prepare for this, if you manage expectations and fight the tendency to extrapolate from small samples, if you monitor the comments and learn from them, including making adjustments to your business practices, social media should do for you what you see others in other industries succeeding with.
Social media successes don't happen without a lot of planning and careful execution. Unfortunately, asset managers may have to work even harder at it.