What can a 42-year old first-time car buyer teach us about ETF PR?
Allan Lane is on his hols so this week we have a guest holder of opinions, Chris Sullivan (pictured), president and CEO of MacMillan Communications, a US PR firm that specialises in ETFs, who asks a pertinent question…
As a general rule, I hate the ‘what can x teach you about y’ self-helpy ‘content’ we’re inundated with when we visit the LinkedIns of the world, so a part of me has to apologise for the headline given this piece. But, apologies extended, off we go anyway…
In a shocking twist, the 42-year old car buyer in this situation is me. For the past two decades I’ve been the classic example of the carless New Yorker, Metrocard in hand, laughing at the fools paying exorbitant rates for garage spaces, laughing even harder at the other fools building their weekly schedules around the dreaded alternate side parking rules, and laughing still harder at another, third kind of fool, sitting in never ending traffic jams.
But the time for laughter has ended. Over the course of the second of my two carless decades here in this city, my wife and I went and had three kids, none of whom remain willing to buy my line that “everything you need, you can get to by subway.”
Hence my first ever visit to a car dealership this week, which, coincidentally, came just hours after I was asked to write something on ETFs and PR for ETF Express.
This will be important to the story later, I promise.
“So,” said the salesman. “What are we going to displace today?”
Such an odd phrase.
It left me concerned this might be some kind of weird car dealership/chiropractor mash-up I had managed to miss hearing about.
“What are you driving now?” he continued.
Ah, got it. He was using displace and replace interchangeably. It was still a bit of a grammatical nightmare, but I was less concerned about the immediate ramifications for my back and hips.
We then began what I can only assume is the usual back and forth between car salesman and car buyer. I was able to respond to his questions with pretty simple answers (usually some variation of “why would anyone want/need/be willing to pay for that”). He was able to respond to my questions with jargon that would make a prospectus writer proud.
Sadly, for him, the story doesn’t end with me buying a car that day, but after I left, I found myself coming back to that question of what I was ‘going to displace’ that day.
Here’s where I segue back to the whole getting-asked-to-write-something-for-ETF-Express thing (I told you that would be important later), because that strange interaction actually did get me thinking about what advice I might have for anyone thinking about public relations efforts for their ETF or ETFs since ‘displacement’ is a word that tends to show up again and again in coverage of the ETF universe.
We all know that ETFs have done quite the job of displacing active mutual funds, but for a sponsor looking to bring out a new fund or perhaps to refresh the messaging around funds that have been on the market for a while, it’s not enough to assume you will be able to ride that wave of displacement.
Instead, you have to be able to clearly and succinctly explain to investors, reporters, and the industry just what it is your approach can displace, be it mutual fund, a different ETF or something else entirely, and why that matters. And if you think you’ve struck on a fund idea that doesn’t displace anything because it’s brand new, then be prepared for an entirely different set of communications challenges, chief among them having a strong answer to the question: “If we didn’t need it before, why do we need it now?”… which I will be happy to help you with right after the test drive I’ve scheduled next week.