Putnam Investments Letter Review
I. Objective
The letters provided to DALBAR have the potential to be improved substantially. This review will identify the positive attributes of the letters, and will also demonstrate the ways in which they can be enhanced.
II. Methodology
To evaluate the likely effect of correspondence on shareholders’ attitudes and service requirements, the following criteria are employed:
- APPEARANCE-During the evaluation of the appearance of correspondence, several physical attributes of written documents are considered. The evaluation concentrates on the quality of stationery and print-type, as well as typographical errors, ink smudges or the use of white out.
- CLARITY-The clarity of a letter is judged by the ease or difficulty experienced by a shareholder when he or she attempts to interpret it. Each letter is reviewed for its simplicity and ability to be understood. The use of abbreviations and industry jargon is also considered. In addition, the writing style and general command of written English are examined.
- COMPLETENESS-To address adequately the concerns of the shareholder, a letter must be comprehensive. Correspondence should explain thoroughly the actions that need to be taken to process the transaction about which the shareholder has inquired, or to take full advantage of a benefit that the shareholder is informed of by the company.
- TONE-The tone of a letter is determined by the general attitude conveyed throughout the written document. Each letter is examined for the presence of phrases that address the shareholder in a pleasant and helpful manner and, conversely, for any phrases or word choices that are condescending or abrupt.
III. Characteristics
This section will provide a synopsis of the attributes that most accurately characterize the letters provided to DALBAR. Later sections will examine these attributes in greater detail.
The following are positive characteristics:
- Polite words and phrases are used.
- The print type used is clear.
- A toll-free telephone number is provided.
The following are characteristics that offer the possibility of improvement:
- The purpose of the correspondence is not made clear in the opening paragraph of both letters.
- One letter contains typographical imperfections.
- Important information is not included.
- Sentence structure can be enhanced.
IV. Key Findings-Appearance
The appearance of a letter communicates to shareholders a company’s core values relating to customer service. A letter that is characterized by a professional appearance will provide a positive foundation for making a good impression, even before the shareholder begins to read the letter. In contrast, a poor appearance makes it more likely that shareholders will begin reading the letter with the expectation that it will not meet their standards.
The print type used in the letters provided to DALBAR is large enough and clear enough to be read without strain. However, the appearance of the letters can be improved by making several changes. The body of the letters can be centered to create a better use of space. In addition, two typographical errors can be eliminated. The third paragraph of Example B states:
Should you have any question, please call us toll-free at
1-800-225-1581.
By changing “question” to “questions,” the sentence will create a positive impression of the fund company’s willingness to deal directly with shareholders and respond to their inquiries.
This is an example of an enhancement that involves the command of written English, but will not detract from the letter’s clarity. Rather, although this will not raise questions about the meaning of the letter, it will not contribute to the strengthening of shareholder relationships.
A similar enhancement can be made in the second sentence of the third paragraph in Example B:
One of our telephone representative will be happy to assist you.
By replacing “representative” with “representatives,” although the sentence will be made grammatically correct, the clarity will not be altered. Shareholders can determine accurately the meaning of the sentence without any changes; but the image presented by this communication will not be ideal. This type of enhancement has the ability to affect shareholders’ estimation of the professionalism of the fund company, as well as its commitment to customer service.
V. Key Findings-Clarity
Clarity has been achieved if shareholders understand the purpose of correspondence, its significance and what is required of them. A significant factor in creating clarity is the use of distinguishing markers, such as bullet points, italics and bold print. These markers enable shareholders to focus on the most important information in a letter. This makes their task much easier and less time consuming.
In the letters provided to DALBAR, no use of such markers is evident. An ideal method of enhancing the clarity of these letters is to add critical information to them and apply markers to this information. For example, in the letter regarding a sale of shares, the shareholder is not informed of the trade date, number of shares, share price and the dollar amount of the redemption check. By including this information in bold print, the reader’s attention will immediately be drawn to the key facts concerning the transaction.
The clarity of one of the letters can be enhanced by stating specifically, in the opening sentence, its purpose. Example A opens in the following manner:
We are writing regarding the recent request we received from
you.
Unfortunately, the nature of the request is not made clear in the letter body either. Therefore, the letter is potentially a source of confusion for the shareholder.
The other letter opens with:
Thank you for your request to sell shares from your Putnam
account(s).
By informing the shareholder of its purpose in the first sentence, this letter allows the shareholder to proceed to the second paragraph with no doubts about the general subject matter that will be discussed.
The first letter could open, instead, by informing the shareholder in the following manner:
Thank you for your recent request to transfer the registration of
your account.
In Example B, the second paragraph states:
This letter is to confirm that we have sold the shares and the
check has been sent to a special address in accordance with
your instructions.
This sentence can sound more personable and can flow more smoothly by making relatively small changes. It can also provide the facts about the redemption, or it may lead into a second sentence in which those facts are stated.
The following is a suggestion for revising this:
Please allow us to confirm that, in accordance with your
request, we sold (number of shares) on (trade date). The price
per share on (trade date) was (dollar amount). The redemption
check for (dollar amount) was sent to the following address:
In Example A, the second sentence of the second paragraph states:
Please call one of our telephone representatives at:
1-800-328-4002 at your earliest convenience.
The colon after the word “at” is not necessary. Its use, in combination with the phrase “at your earliest convenience,” makes the sentence awkward. The phrase itself does not need to be changed. It sounds awkward only because it stands alone, as an incomplete sentence, after the colon. The colon can be used if nothing is written after the telephone number. A better revision, however, would be simply to delete the colon.
VI. Key Findings-Completeness
The completeness of correspondence is gauged by determining whether or not the explanations and instructions provided are comprehensive. A letter is incomplete, regardless of how well written it is, if the shareholder finds it necessary to use any means other than the letter’s instructions to effect a transaction or establish a service. One exception is a question that cannot be answered adequately by the company because it goes beyond the scope of the company’s area of expertise. In addition, a letter may sometimes lead a shareholder to ask a question about a related topic.
One aspect of completeness that is found in both letters is a toll-free telephone number. No letter can be considered complete if shareholders are not given the means to contact the company immediately.
The two letters provided to DALBAR, however, can provide a much more comprehensive explanation to shareholders by including additional information. As mentioned in the Clarity section, Example B could provide shareholders with the trade date, share price, number of shares and the mailing address. By doing so, the letter would make a follow-up telephone call unnecessary. This illustrates the powerful connection between completeness and clarity. Although factors other than incompleteness can adversely affect clarity, a letter cannot be perfectly clear if it is incomplete. The questions raised by any omission of facts demonstrate a lack of clarity.
Example A is an outstanding example of the connection between clarity and completeness. Nowhere in the letter is the shareholder informed of exactly what transaction request prompted the company to compose this correspondence. Neither is the shareholder told what information will need to be provided. Because this information is not included, the shareholder will call the telephone number provided without any knowledge of what must be given to the telephone representative.
VII. Tone
The tone of correspondence can help to build a positive relationship with shareholders, one that conveys the sense that shareholders are not uniformly categorized. A professional tone balances sincerity and respect with the decorum associated with business relationships. Letters that convey a harsh tone, whether intentionally or not, will negate the benefits of whatever positive traits they possess.
Example A uses polite phrases to establish a friendly rapport with the letter’s recipient. The second paragraph states the following:
Unfortunately, we cannot process your transaction without
further information.
“Unfortunately” is a good word choice when bad news must be delivered. It is especially useful when a shareholder is told that he or she is required to do something.
Additionally, the first sentence of the third paragraph states:
To assist us in expediting your request, please have our
reference number above available when you call us.
“To assist us” and “please” alter the tone of a business letter, but without crossing the line between professional and personal tones. A business letter must maintain a professional decorum that does not sound inappropriately personal.
Another word choice that assists in the creation of a positive tone is found in the first sentence of Example B:
Thank you for your request to sell shares from your Putnam
account(s).
By opening the letter with “Thank you,” the shareholder will realize that his or her business is appreciated. Example A, however, does not open by thanking the shareholder. By opening all letters with “Thank you,” the fund company will begin each communication with the ideal foundation.
VIII. Conclusion
The letters reviewed by DALBAR offer the prospect of realizing substantial enhancements by making relatively small changes. These changes, by maximizing the effectiveness of correspondence, will reduce the effort required of the fund company to provide customer service. The reduction in telephone calls and letters written to the fund company, seeking clarification, will also inspire renewed confidence in the company’s competence.