It didn't take long for marketing pioneer Stephen Cone to put his stamp on Fidelity Investments.
Just months after taking the post of president of customer service, Cone has quickly moved to anoint a first-ever spokesman, legendary Magellan Fund manager Peter Lynch, to put a human face on the world's largest mutual fund family. While that decision attracted headlines, it is what Cone is quietly planning in the coming months which could prove revolutionary for Boston- based Fidelity.
In an interview, Cone discussed his plans to focus both the Lynch-led branding campaign and direct marketing efforts on key segments of Fidelity's 12 million customers. In doing so, he will shift Fidelity away from its traditional product focus and will step up direct mail efforts. The move is a huge cultural shift at the nation's largest mutual fund family.
Moreover, the company will focus on growing its share of wallet from clients while educating them about how to manage their money. While the companies are radically different, the approach is the same that Cone employed during his three-year whirlwind tour at Cleveland-based KeyCorp. There he managed to shake up the banking-as-usual culture by introducing a spokesman, establishing a brand identity across dozens of products and pushing Key to adopt the direct marketing strategies he mastered while running Epsilon.
Here is what Cone had to say about the outlook at Fidelity and his conviction that customer service and brand are inseparable:
FSM: What do Fidelity customers expect today?
Cone: They want convenience, they want ease of access and they want a lot of information at their fingertips. Sometimes they want that information electronically and sometimes they want it from a person. We're trying to make access to that information better and better all the time. In July, for instance, we are introducing voice recognition to all of our customers. We see a large, positive impact with our very active discount brokerage customers (because) they can (just) say the name of a company and get the quote. They won't have to press a single button.
FSM: You are No. 1 in a commodity business. How do you distinguish Fidelity?
Cone: The most important thing that differentiates us is that if, at the end of the day, we get more business from more people; if they trust us more and if they think we'll be around through bad and good times. It's not complicated. How you protect that image and embellish it is a large part of what I spend time worrying about.
FSM: Is trust the leading issue, because that is how banks often position themselves?
Cone: It's trust as well as expertise. Most people still have the image that banks are somewhere between minimum security prisons and old-age homes in terms of how they look. The image is that a bank is a great place to store money that you don't want to do much with. That is changing, but it still lingers and selling CDs doesn't help that image.
FSM: How will things be different at Fidelity?
Cone: We have 12 million individuals across the Fidelity landscape. In the retail world that I oversee, we're managing all of our activities against customer segments. That's a new strategy for us-that's versus what has been successful in the past, which is a product focus. Until just a few weeks ago, that is the way it was managed. You were a brokerage customer, mutual fund customer, retirement customer or a high-net worth customer and each was managed separately. Now those are tailored according to the individual. Until now, there hasn't been an umbrella strategy.
FSM: Fidelity has been criticized for having very cluttered branding campaigns in the past. When will we see a visible change?
Cone: You've already seen the change if you have watched our Roth IRA campaign. We are integrating the advertising so we are not trying to throw all kinds of messages-unrelated visually or content -wise, as we have in the past -at our customers. You will see much more targeted direct mail. If you are a good customer, much more frequency with relevance. You will also begin to see targeted personalization and messaging in different channels.
FSM: How does that affect the way you pitch brand?
Cone: The word I use when I talk about the brand promise is aspirational. I want people to think of us providing something that really is of value to them; that will help get them to where they want to be. One could argue that what we stood for in the past-which was very successful-is great products. What we want to stand for in the future is great solutions, education and tools. Another way of putting it would be (to provide) assistance and guidance in formulating and meeting your short- and long- term goals.
FSM: Is that a recognition of a fundamental shift away from do-it- yourselfers to customers who want help?
Cone: That is correct. The industry has done a great job of confusing people who want that help. Gallup data, along with industry advertising data, shows that. In financial services, we are spending three times as much on advertising as we were four years ago. That is not creating clarity. That's creating clutter. To break through that clutter you have to entertain to retain.
FSM: What is Fidelity's rate of attrition?
Cone: It's low, and we don't talk about it. But there are two parts to it. We have a very low rate of people actually totally leaving Fidelity. But what is more likely is that a person becomes relatively inactive and they move most of their money elsewhere. My goal is to get as many people as possible up the ladder with us toward full asset management.
FSM: Since the Depression, Americans have been hesitant about putting all of their eggs in one basket. So where is the opportunity?
Cone: We all know that putting your money in one place is not something that Americans have not been really comfortable with. Sociologically, we have seen that for the under-30 crowd, that philosophy hasn't filtered down. They are much more brand loyal and less likely to be concerned about putting their money in one place. We are seeing an opportunity to get people to use you for all their money management.
FSM: Will Peter Lynch address that as Fidelity's spokesman?
Cone: Part of our mission in life is to educate people about the right and wrong way to set and maintain financial goals. Peter lives and breathes that. In the second half of the year, we are going to have a major educational campaign around 'Know what you own and why you own it.' Peter is a natural for this. He's passionate about the message. I won't divulge details. It's going to be Peter in situations that you should enjoy and may chuckle at. The message is a serious one, but it will be developed with a light touch. It won't be a talking head, and it will be integrated across all channels. We'll talk about some major services that we believe people should utilize.
FSM: How will that affect your media spending?
Cone: Overall, we're going to spend more on existing customers than on non-customers. This campaign will be launched with an enhanced service for asset allocation. It will be launched privately to selected customers for the first two months and it will be by invitation only. The branding campaign will start in late August. You should treat your existing customers as insiders. They should get access to services first. That's good manners, and it's common sense.
