Murrayisveryoutspokenabouthowheperceivesadvertising

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Unformatted text preview: en by intensive research. It is the result of matching the right funds (and their management philosophy) with what a client wants to achieve in terms of risk strategy. In doing so, $RU has a range of pre‐ selected or preferred suppliers. However, $RU does not receive any commission fee from the investment company or the broker, as it operates an independent business. Instead, $RU charges the clients a fee for every transaction, which is taken from the client investment account directly. Where do the clients come from? The $RU business model is essentially a professional service model, which is based on client referrals and word‐of‐mouth. The company does not invest any significant amounts of money in traditional advertising. While a range of instruments are available and quite com‐ mon in the industry (such as magazine ads, Internet marketing, public relations, telephone calls, product placement etc.), $RU does not yet make any use of these instruments. $RU operates a high quality model at the upper end of the market, with wealthy clients, based on personal relationships. Murray is very outspoken about how he perceives advertising: “If advertising worked, banks would have the best financial planning businesses in Australia. But we just – we’ve got endless numbers of people coming to us with ideas with internet marketing and all that sort of stuff. It’s rubbish...“ Instead of traditional advertising, Murray stresses the importance of getting the existing cli‐ ents to spread the word, e.g. to refer the business to their friends and family: “You’ve got to build a culture of referrals in your client base. So you have to explain to them that you do want referrals. When a referral does come in you’ve got to phone the client up and say thanks for the referral, appreciate it. If the client does do business with us we generally have a gift, don’t we?“ Moreover, $RU prides itself for its approach to nurturing its relationships. For example, the partners run client functions (special events) for the clients. Once a year before Christmas the partners hold functions for all clients. In addition to these functions, which are available to all clients, special functions are held for top clients (also referred to as ‘A’ clients ‐ those with the largest portfolios, which generate the most revenue for the organisation...
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This note was uploaded on 08/18/2011 for the course INFS 1000 taught by Professor Dr.kairiemer during the Three '10 term at University of Sydney.

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