The Eight Rules of How to Use (and How Not to Use) eMail

April 15, 2014

Email. How did we ever live without it? Quite well for thousands of years, thank you, but few of us in the workplace today can remember a time when it wasn’t our principal means of correspondence.

It does seem to have legs. Back in the 1970s and ’80s, government, military and university researchers were able to send messages from green screen to green screen by typing text on the command line. By the mid-1990s, nobody who had any kind of public-facing job could live without email. The fax machine came and went; chat rooms are on the long way out; and video calling remains an occasional — and often unwelcome —  conversation platform.

And, although social media as a whole might be eclipsing email for many purposes, no one social media milieu has been able to establish dominance and maintain it for more than a handful of years. But email keeps trudging along as the go-to communication platform in the workplace, particularly for small business — which means particularly for those who are starting a hedge fund.

Its purposes are many and invaluable, according to London-based market intelligence firm ProFundCom: lead generation, prospect management,  capital introduction,  investor relations, sales management. But whatever you use it for in your mix of hedge fund marketing tactics, there are at least eight rules that must be followed.

  1. Don’t use email for first contact. “You can buy lists, but the most effective way to reach people is through networking and interaction,” says Mary Jo Gracin, New York-based president of Fund Edge Consulting, a marketing advisor specializing in the alternative investment industry. She recommends attending conferences, seminars and other business card trading posts because the hedge fund field “is still a handshake, face-to-face industry.”
  2. Understand email is both time-sensitive and permanent. “It is immediate,” Gracin says, but still, “People can read the email when they have time. … It doesn’t disappear.” These are the reasons why email hasn’t been supplanted by the broader array of social media, she says, as well as the orderliness of email record keeping for compliance reasons.
  3. Keep it simple and avoid attachments. Gracin recommends using plain text and no graphics in hedge fund marketing emails. And be aware that the buy-siders’ spam filters are likely to block any email with an attachment over a certain — but unknown to you — size. It’s better, she says, to host the file you want to share behind your own firewall, then send a link with a password in the email. Incidentally, that firewall is important for security reasons. It’s not enough to just hang the file at some free site in the cloud.
  4. Be yourself. Literally. Gracin advises that, if your name is Jane Smith and you work at Dolla-Holla Investments, your email should land in your prospect’s inbox as jane.smith@dolla-holla.com, not as info@ or sales@. The personal touch always trumps the generic.
  5. No selfies, no pictures of your dinner. Maybe it goes without saying, but some professional distance between hedge fund managers and their clientele is a good thing. Yes, keep it cordial. Yes, you’re likely to go golfing together, have a couple drinks now and then, meet each others’ spouses. But there’s a purpose for email and there’s a purpose for Instagram, and you need to know the difference and practice it. “Email should be focused on the client. It should inform. … It should be clear and concise,” Gracin says. “No one wants to hear about what you’re doing all the time.”
  6. Your name is on the line. “Fifty-two percent of all hedge fund failures are due to fraud,” Gracin says, apparently citing a 2006 Journal of Alternative Investments study. A follow-up Congressional Research Service study suggests that’s an overstatement. But even so, it is at least one of the leading causes of hedge funds going under. Be honest and forthright in your email and other communications, and it won’t be yours.
  7. The JOBS Act has nothing to do with it. Recent moves in Washington enables small funds willing to jump through a couple more hoops to cast a wider blast-email net when it comes to direct solicitation. Even so, the pool of qualified investors whom hedge fund marketers can approach remains the same. “Your message is not going to change,” Gracin says. “You still need to be truthful, no matter what.”
  8. Host your own email for now. If you’re just starting out, Gracin advises that you host your own email. It’s less likely to get caught in spam folders. Don’t go with an email service provider until your business has scaled up to the point where you simply have to.

If you’re looking for a common theme in all this, it all boils down to this overriding imperative: Don’t write anything that you don’t want to read. And if you do, don’t put it in an email and click “Send.”

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