STANDARD & POOR’S FINANCIAL COMMUNICATIONS CONJOINT ANALYSIS OF Newsletter OnDemand

Sheila FarrarJiten GoyalChristopher PowersNarayanan RamanPeyton Williams

A collaboration of:

ABOUT S&P FINANCIAL COMMUNICATIONS

• A division of McGraw-Hill Education• Leading provider marketing and communications solutions

for the financial services industry– Mutual Funds– Banking– Retirement– Brokerage– Insurance

The McGraw-Hill Companies

Financial Services Media

Newsletter OnDemand

• A web-based newsletter development system for financial advisors

• Allows advisors to maintain mailing lists and stay in contact with their clients through regular newsletter emails

• Provides:– Access to a library of articles on

five different financial topics– Ability to customize the entire

appearance of the newsletter– Monitoring capabilities to see

which users read the newsletters

PROJECT OBJECTIVES

OBJECTIVE 1 – Identify Optimal Product DesignUsing conjoint analysis, determine what combination(s) of product features and attributes would have the most sales potential.

OBJECTIVE 2 – Marketing Strategy Identify opportunities for specific targeting of financial advisors based on demographic and/or behavioral profiles

DATA COLLECTION

Target: Financial Advisors Contact Method: Blasted 4000 emails with link to Qualtrics

survey Survey Design:

1. Psychographic & Behavioral (9) • How much do advisors value client communication?• What content categories are most important?• Extent of their marketing activities

– How much time/resources do advisors spend on marketing?• Attitudes surrounding newsletters

– Do clients prefer e-mail or printed material?– How important is compliance?

2. Conjoint Cards (16)3. Demographics (11)

• Age, Gender, Ethnicity, #clients, yrs experience

CONJOINT ANALYSIS – PRODUCT ATTRIBUTES AND FEATURES

Price $250 $350, $550 $750

Brand Standard &Poor’s McGraw-Hill FC OnDemand Peter Montoya

Email Reports (Sent, Opened, Failed) Included Not Included

Customization Level• Customized: Advisor selects style and articles for each newsletter• Pre-set: Several style options offered. Advisor given list of suggested articles monthly• Automated: Three mailing list categories. Preselected articles automatically sent

monthly

BIG PICTURE –LOW OVERALL PRODUCT APPEAL

# Answer Response %

1 Not at all Likely 64 61%

2 2 13 12%

3 3 11 10%

4 4 11 10%

5 5 5 5%

6 6 1 1%

7 7 0 0%

8 8 0 0%

9 Very Likely 0 0%

Total 105 100%

Price: $250

Brand: FC OnDemand

Email Report NOT Included: No reports on email sent, failed emails, and email opens.

Pre-Set Newsletters. You select from a variety of newsletter templates, which will include your contact information and personal settings such as a picture and logo. Each month you receive a list of suggested content.  You chose the content from this list and send the newsletter to your clients.

Sample Card

Sample Card - Results

Surveys Sent 4214 Responses Received170 Responses Fully

Completed96 Took longer

than 343 seconds to complete

47

ANALYSIS FRAMEWORK

Conjoint Analysisa. Overall Modelb. Segmented Model

Demographic Analysis

CONJOINT ANALYSIS – OVERALL MODEL

Attribute Level Preferences

• Price – Prefer low price

• Brand - S&P most preferred followed by MH

• Email Reports – Want reports

• Level of Customization – Fully customizable preferred!

• Consistent across most of the segmented models

Unstandardized

Coefficients p Significant?  B    

(Constant) 2.86 0.00000 YES$350 -0.11 0.55934 NO$550 -0.50 0.00619 YES$750 -0.64 0.00048 YES

PetMon -0.13 0.48358 NOFCOnD -0.26 0.15285 NOSandP 0.31 0.08529 YESRepInc 0.48 0.00022 YESPreset -0.48 0.00263 YES

Automated -0.80 0.00001 YESDependent Variable:

PREF      Selecting only cases

for which TTC >= 343      

R Square 7.9%Adjusted R Square 6.5%Sig. 0.0

ConstantsPrice: $250Brand: McGraw-HillReport: Not IncludedCustomization: Custom

CONJOINT ANALYSIS – OVERALL MODEL

Relative Attribute Preferences

• Customization Level – First!

• Price and Brand – Not much difference in preference levels

• Great variability noticed among segmented models

CUSTOMIZATION LEVEL 32%

PRICE 26%

BRAND 23%

REPORTS 19%

Q: How many clients do you serve?

CONJOINT ANALYSIS – SEGMENT LEVEL ANALYSIS

Q: How long have you been a financial advisor?

Relative Importance

  1 - 4 years >10 years

Price 20% 26%

Brand 40% 22%

Report 20% 15%

Customization 20% 37%

Relative Importance

  <50 51-100 101-250 251 +

Price 23% 16% 33% 29%

Brand 30% 33% 16% 16%

Report 22% 11% 19% 17%

Customization 24% 39% 32% 38%

DEMOGRAPHICS

Age Years as financial advisor

•78% Male•95% Caucasian

Client communication is the most important thing you can do to build and sustain your business.

Today, clients not only want more communication, but they also want higher quality information

PSYCHOGRAPHICS

Busi

ness

Invest

ing/E

conom

y

Pers

onal Fi

nance

Reti

rem

ent

Sta

ndard

& P

oor'

s M

ark

et

Com

menta

ry

0

10

20

30

40

50

60

70

80

9

75

16 1811

Content Preference

PSYCHOGRAPHICS

Develop prototypes

Conduct focus groups

Learn about compliance challenges

Refine Customization wording Use exploratory data to refine current

survey for a future conjoint study targeting existing FC clients

RECOMMENDATION 1: CONDUCT EXPLORATORY RESEARCH

RECOMMENDATION 2: OPTIMAL PRODUCT DESIGN

# Answer Response %

1 Not at all Likely 45 43%

2 2 12 11%

3 3 9 9%

4 4 4 4%

5 5 8 8%

6 6 10 10%

7 7 12 11%

8 8 4 4%

9 Very Likely 1 1%

Total 105 100%

Price: $250

Brand: Standard & Poor's

Email Report Included: You receive reports on email sent, failed emails, and email opens.

Custom Newsletters: You design the layout, choose the content, and send the newsletters to your clients.  Your contact information and personal settings such as a picture and logo are automatically pulled in

Q: How many clients do you serve? Q: How long have you been a financial advisor?

RECOMMENDATION 3: PRODUCT POSITIONING

Young more, inexperienced advisors rely heavily on Brand. Higher lifetime value

Established advisors prefer Price and Customization

Relative Importance

  1 - 4 years >10 years

Price 20% 26%

Brand 40% 22%

Report 20% 15%

Customization 20% 37%

Relative Importance

  <50 51-100 101-250 251 +

Price 23% 16% 33% 29%

Brand 30% 33% 16% 16%

Report 22% 11% 19% 17%

Customization 24% 39% 32% 38%

Busi

ness

Invest

ing/E

conom

y

Pers

onal Fi

nance

Reti

rem

ent

Sta

ndard

& P

oor'

s M

ark

et

Com

menta

ry

0

10

20

30

40

50

60

70

80

9

75

16 18 11

Content Preference

RECOMMENDATION 4: CONTENT

Editorial should focus content on investing / economy

RECOMMENDATION SUMMARY

1. Optimal Product Design Price: $250 Brand: Standard & Poor’s Reports: Include Customization: Custom

2. Conduct Further Exploratory Research Develop prototypes Conduct focus groups Learn about compliance challenges Refine Customization wording Conduct future conjoint study targeting existing FC clients

3. Product Positioning Young more, inexperienced advisors rely heavily on Brand.

Higher lifetime value Established advisors prefer Price and Customization

4. Content should focus more on investing/economy