No Matter Where Technology Takes Us, Clients Still Need a Human Touch
If you’re aiming for omni-channel excellence, or simply looking to thrive on your channels of choice, don’t forget about the human side. In fact, it should be your first priority. With every new trend and communication channel comes new opportunities to connect, so it’s natural for marketers to seek out the most promising tools for the job. The challenge is that every trend has an expiration date, and it’s too easy to sacrifice the fundamentals in favor of the hot, new tool with an unknown shelf-life.
The process of building a seamless, positive consumer experience starts from within, and should affect your business at every level. If you’re not on the same page internally, it’s impossible to provide the type of experience that transcends channels.
Consumers care less about channel than you think
The experience of the consumer is not defined by the channel that they use to engage, because for most people a channel is a means to an end. They want to contact customer service, learn more about a special offer, air their grievances, or maybe even make sure that an especially helpful employee receives full credit for a job well done. Whether they do this through Facebook, Twitter, your mobile app or a fax machine, their goal is to complete a task – even if that task simply happens to be exploring what your brand has to offer in an open-ended way.
Appearing in the right places is important, but it’s only a step on the path to the larger goal of forging real relationships with your customers. Just as importantly, consumers expect a seamless experience regardless of the channel they use to establish contact. That’s where the internal cohesiveness of your organization is really put under the spotlight. A customer’s question or concern doesn’t always fit into a predetermined box. They just want help from someone, regardless of title or channel.
If sales, marketing, and customer service aren’t working from the same basic foundation, an omni-channel experience remains out of reach. This includes sharing key data. But even then, the goal of sharing data is to provide a personalized, human experience no matter what technology the consumer uses to initiate contact. It’s also important that everyone works from the same set of values whether we’re talking about pure customer service, dispute resolution or targeted, personalized marketing.
Being human boosts your appeal in any channel
It all comes back to one of my favorite topics, and it’s something that is within grasp no matter the size of your business. Just be human. Every interaction with a customer is a chance to build brand loyalty, make a positive impression, and over time turn that customer into an enthusiastic advocate for your brand. The little moments where you go above and beyond are often the most memorable for your customers, such as:
- A near-immediate response to a pressing question on your social page
- A few extra minutes on the phone to make sure an issue is resolved thoroughly
- Remembering the names, faces, and preferences of people who visit your small business regularly
You may use new and evolving tools to make those things happen, but the tool is secondary to the moment it helps create. There’s also much to be gained by preaching customer service across the board, because the customer’s channel of choice won’t always lead to the point of contact they’re “supposed” to reach. With digital channels, everyone who represents your company publicly may become the face of your brand for a customer in need. Prioritize customer service, be human, and put the focus on people first, channel second.
This first appeared on http://tedrubin.com/http://tedrubin.com/.
Alternative Beta Strategies: Alpha/Beta Separation Comes to Hedge Funds
Written by: Yazann Romahi, Chief Investment Officer of Quantitative Beta Strategies, J.P. Morgan Asset Management
A quiet revolution is taking place in the alternatives world. The idea of alpha/beta separation has finally made its way from traditional to alternative investing. This development brings with it a more transparent, liquid and cost-effective approach to accessing the “alternative beta” component of hedge fund return and a new means for benchmarking hedge fund managers.
The good news for investors is that the separation of hedge fund return into its components—rules-based alternative beta and active manager alpha—has the potential to shift investing as we know it. These advancements could democratize hedge funds and, at long last, make what are essentially hedge fund strategies available to all investors—even those who aren’t willing to hand over the hefty fees often associated with hedge fund investing.
A benchmark for alternatives
With respect to traditional equity investing, we have long accepted the idea that there is a market return, or beta—but this hasn’t always been the case. Investors used to assume that to make money in the stock markets, one needed to buy the right stocks and avoid the wrong ones. The idea of a market return independent of skilled stock selection seemed ridiculous to most market participants. Yet today, we would never invest in an active manager’s strategy without benchmarking it against its respective beta.
Interestingly, hedge fund managers have been held to a different standard. Investors have been much more willing to accept the notion that hedge fund strategy returns are pure alpha, and that their investment returns are based entirely on the skill of the fund manager. That notion explains why investors have been willing to accept a “two and twenty” fee structure just to access what has been perceived as one of the most sophisticated and powerful investment vehicles available.
In thinking about the concept of beta, consider its precise definition—the return achievable by taking on a systematic exposure to an economically compensated risk. In traditional long only equity investing, the traditional market beta has been further refined as a number of other risks have been identified that are commonly referred to as “strategic beta.” These include factors such as value, momentum, quality and size. But no one ever said that these risk factors must be long-only.
Over the past decade, as more hedge fund data became available, academics began to disaggregate hedge fund return into two components: compensation for a systematic exposure to a long/short type of risk (alternative beta), and an unexplained “manager alpha.” What they found is that a significant portion of hedge fund return can be attributed to alternative beta. That fact has turned the tables on how we look at hedge fund return. With the introduction of the alternative beta concept, hedge fund managers will have to state their results, not just in terms of total return, but also as excess return over an alternative beta benchmark.
Merger arbitrage—an alternative beta example
The merger arbitrage hedge fund style can be used to illustrate the alternative beta concept. In the case of merger arbitrage, the beta strategy would be the systematic process of going long every target company, while shorting its acquirer. There is an inherent return to this strategy because the target stock price typically does not immediately rise to the offer price upon the deal’s announcement. This creates an opportunity to purchase the stock at a discount prior to the deal’s completion. The premium that remains is compensation to the investor for bearing the risk that the deal may fail.
Active merger arbitrage managers can add value by choosing to invest in some deals while avoiding others. Therefore, their benchmark should be the “enter every deal” strategy, not cash. In fact, the beta strategy explains the majority of the return to the average merger arbitrage hedge fund. And it doesn’t stop there. Other hedge fund styles that can be explained using alternative beta include equity long/short, global macro, and event driven. Note that the beta strategy invests in the same securities, using the same long/short techniques as the hedge fund strategy. The difference is that the beta strategy is a rules-based version that can become the benchmark for the hedge fund strategy. After all, if a hedge fund strategy cannot beat its respective rules-based benchmark (net of fees), an investor may be wiser to stick to the beta strategy.
Implications for investors
What does all this mean for the end investor? Hedge funds have traditionally been the domain of sophisticated investors willing to pay high fees and sacrifice liquidity. Alpha/beta separation in the hedge fund world means that investors can finally choose whether to buy the active version of the hedge fund strategy or opt for the passive (beta) version. Hedge fund strategies can be effective portfolio diversifiers. Now, through alternative beta, virtually all investors can access what are essentially hedge fund strategies in a low cost, liquid, and fully transparent form. For investors who haven’t had prior access to hedge funds, this could be welcome news. Not only can investors look at an active hedge fund manager’s strategy and determine how it has done compared to the systematic beta equivalent, they can also invest in ETFs that encapsulate these systematic strategies.
When looking at one’s traditional balanced portfolio today, there are plenty of questions around whether the fixed income portion will achieve the same level of diversification it has provided in the past. After all, with yields still low, there is little income return. Additionally, the capital gains that came from interest rate declines are likely to reverse. With fixed income unlikely to adequately fulfill its traditional role in portfolios, there is a need to find an alternative source of diversification. This is where alternative strategies may help. For investors seeking to access diversifying strategies in liquid and low-cost vehicles, alternative beta strategies in ETF form are one option.
Looking for an alternative to enhance diversification in your portfolio?
For investors looking to further diversify their overall portfolio, JPMorgan Diversified Alternatives ETF (JPHF) seeks to increase diversification and reduce overall portfolio volatility through direct, diversified exposure to hedge fund strategies using a bottom-up, rules-based approach.
Learn more about JPHF and J.P. Morgan’s suite of ETFs here.
Call 1-844-4JPM-ETF or visit www.jpmorganetfs.com to obtain a prospectus. Carefully consider the investment objectives and risks as well as charges and expenses of the ETF before investing. The summary and full prospectuses contain this and other information about the ETF. Read them carefully before investing.
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