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Home » Business And Finance Articles » Maybe You Should Worry About Your Pr

Maybe You SHOULD Worry About Your PR!

Especially if your public relations budget is all about tactics like brochures, special events, talking to reporters and press releases.

Please don't get me wrong. Communications tactics are valuable devices which we call upon from time-to-time to move a message from here to there.

But, as a business, non-profit or association manager, you can omit the best public relations has to offer, the crème de la crème of PR!

Try this on for size. The core public relations mission pulls together the resources and action planning needed to alter individual perception leading to changed behaviors among a business, non-profit, or association's most important outside audiences. Then it goes on to help a manager persuade those key folks to his or her way of thinking, and then, moves them to take actions that allow their department, group, division or subsidiary to succeed.

Now, there's a real theory behind that mission, and it's the underlying premise of public relations: People act on their own perception of the facts before them, which leads to predictable behaviors about which something can be done. When we create, change or reinforce that opinion by reaching, persuading and moving-to- desired-action the very people whose behaviors affect the organization the most, the public relations mission is usually accomplished.

It's comforting to note that the right public relations planning really CAN alter individual perception and lead to changed behaviors among key outside audiences. AND equally encouraging when you remember that your PR effort must demand more than special events, news releases and talk show tactics if you are to receive the quality public relations results you believe you deserve.

And those results won't be long in coming, especially when capital givers or specifying sources begin to look your way; customers begin to make repeat purchases; membership applications start to rise; new proposals for strategic alliances and joint ventures start showing up; politicians and legislators begin looking at you as a key member of the business, non-profit or association communities; welcome bounces in show room visits occur; community leaders begin to seek you out; and prospects actually start to do business with you. Help is at hand because the public relations people assigned to you can be of real use for your new opinion monitoring project because they are already in the perception and behavior business. But be certain that the PR folks really accept why it's SO important to know how your most important outside audiences perceive your operations, products or services. Above all, be sure they believe that perceptions almost always result in behaviors that can help or hurt your operation.

Layout the plans for your PR staff re: monitoring and gathering perceptions by questioning members of your most important outside audiences. Ask questions like these: how much do you know about our organization? Have you had prior contact with us and were you pleased with the interchange? Are you familiar with our services or products and employees? Have you experienced problems with our people or procedures?

Bringing in survey firms to do the opinion gathering work can cost a lot more than using those PR folks of yours in that monitoring capacity. But whether it's your people or a survey firm asking the questions, the objective remains the same: identify untruths, false assumptions, unfounded rumors, inaccuracies, misconceptions and any other negative perception that might translate into hurtful behaviors.

Here, you have to set a goal aiming for action on the most serious problem areas you uncovered during your key audience perception monitoring. Will it be to straighten out that dangerous misconception? Correct that gross inaccuracy? Or, stop that potentially painful rumor dead?

Naturally a goal requires a strategy to show you how to reach it. Just three strategic options are available to you when it comes to solving perception and opinion problems. Change existing perception, create perception where there may be none, or reinforce it. The wrong strategy pick will taste like spare ribs with lemon sauce. So be certain your new strategy fits well with your new public relations goal. You certainly don't want to select "change" when the facts dictate a strategy of reinforcement.

Now your people must do some good writing. You must prepare a persuasive message that will help move your key audience to your way of thinking. It must be a carefully- written message aimed directly at your key external audience. Select your very best writer because s/he must come up with language that is not merely compelling, persuasive and believable, but clear and factual if they are to shift perception/opinion towards your point of view and lead to the behaviors you have in mind.

It's time to pick out the communications tactics most likely to carry your message to the attention of your target audience. There are many waiting for you. From speeches, facility tours, emails and brochures to consumer briefings, media interviews, newsletters, personal meetings and many others. But be certain that the tactics you pick are known to reach folks just like your audience members.

How you communicate your message is a concern because the credibility of any message is always fragile. Which is why you may wish to unveil your corrective message before smaller meetings and presentations rather than using higher-profile news releases.

If the thought of a progress report appeals to you, you must begin a second perception monitoring session among members of your external audience in order to measure headway. You can use many of the same questions used in your benchmark session. But this time, you will be on guard for signs that the bad news perception is being altered in your direction.

In the event the program slows down, you can always speed things up by adding more communications tactics as well as increasing their frequencies.

Worry can be healthy, too. Especially when it moves you away from a major emphasis on communications tactics and on to a plan for doing something positive about the behaviors of those important external audiences of yours that most affect your operation. And particularly so when you persuade those key outside folks to your way of thinking by helping to move them to take actions that allow your department, division or subsidiary to succeed.

end

Please feel free to publish this article and resource box in your ezine, newsletter, offline publication or website. A copy would be appreciated at bobkelly@TNI.net. Word count is 1180 including guidelines and resource box.

Robert A. Kelly © 2005.

And here is another random article you might be interested in...

How To Dissect Mutual Fund Returns

While total and compound annual returns are useful, savvy investors will look deeper, using a variety of metrics, to get a more complete picture on mutual fund performance.

On January 1, 2006, a leading financial daily reported the trailing 1-year and 5-year returns of Fidelity Contrafund (Nasdaq: FCNTX), a no-load mutual fund, as 16.23% and 6.21% respectively. While the financial daily's return information is useful, there is more to mutual fund returns.

Is the performance of the fund superior or inferior?

How tax-efficient is the fund in delivering these returns?

Are the returns of the fund commensurate with the risk the fund manager has taken to achieve them?

Savvy investors will seek answers to such questions when evaluating mutual fund returns. Before getting into the nitty-gritty of mutual fund returns, it is good to understand what the data reported in the financial daily really mean.

Total Return

Fidelity Contra's reported 16.23% 1-year return is the fund's total return for the December 31, 2004 to December 31, 2005 period. In practical terms, $10,000 invested in the fund on December 31, 2004 is worth $11,623 on December 31, 2005. The total return includes more than the increase (or decrease) in the fund's share price. It also assumes reinvestment of all dividends as well as short- and long-term capital gain distributions into the fund at the price at which each distribution is made.

Compound Annual Return

The reported 6.21% 5-year return is the fund's compound annual return (also called the average annual return). The compound annual return is a calculated number that describes the rate at which the investment has grown assuming uniform year-over-year growth during the 5-year period.

A $10,000 investment in the Contrafund on December 31, 2000 has grown to $13,515.34 on December 31, 2005. The ending value of $13,515.34 = $10,000[(1 + 0.0621)^5] where 6.21% is the compound annual return. The investment in the fund grew at an implied annual growth rate of 6.21% over the 5-year period.

While total return and compound annual return are useful, they do not tell how a particular mutual fund has performed compared to its peers. They also do not provide information on the return actually earned by investors after accounting for taxes. Finally, they do not offer insight on how well the fund manager has managed risk while achieving the returns.

Relative Return

Relative return compares the performance of a mutual fund against its peers. It is the difference between the total return of the fund and the total return of an appropriate benchmark over the same period.

Fidelity Contra is a large-cap growth fund that primarily invests in U.S.-based companies. It is therefore appropriate to compare its performance with that of an average large-cap growth fund. It is also relevant to benchmark the fund against the Standard & Poor's (S&P) 500 index, comprising of large U.S.-based companies.

While Fidelity Contra has a compound annual return of 6.21% for the 5-year period ending December 31, 2005, Morningstar reports the average large-cap growth fund has an average annual loss of 8.48% over the same period. The S&P 500 index has an average annual return of 0.54% over the same period. Fidelity Contra has outperformed with a relative return of 14.69% over the average large-cap growth fund and with a relative return of 5.67% over the S&P 500 index.

After-Tax Return

Unlike assets held in qualified accounts such as 401k plans or individual retirement accounts (IRA), assets held in regular individual or joint accounts are not tax-deferred. For such non-qualified accounts, after-tax return is the return realized after accounting for taxes.

Short-term capital gains and short-term capital gain distributions from a mutual fund are currently taxed at the same rate as earned income. Dividends, long-term capital gain distributions, and long-term capital gains realized from the sale of fund shares are currently taxed at a lower rate.

Fidelity states the compound annual return for Fidelity Contra before taxes is 6.21% for the 5-year period ending on December 31, 2005. When all distributions are taxed at the respective maximum possible federal income-tax rate, the after-tax return dips to 6.10%. The after-tax return drops further to 5.33% after accounting for the long-term capital gain tax due on sale of the fund shares.

Risk-Adjusted Return

Some fund managers take more risk than others. It is important to assess a fund's return in light of the amount of risk the fund manager takes to deliver that return.

Risk-Adjusted Return is commonly measured using the Sharpe Ratio. The ratio is calculated using the formula (mutual fund return - risk free return)/standard deviation of mutual fund return. The higher the Sharpe ratio, the better is the fund's return per unit risk.

Based on returns for the 3-year period ending on November 30, 2005, Morningstar reports Fidelity Contra's Sharpe ratio as 1.74. The fund's Sharpe Ratio may be compared with those of similar funds to determine how the fund's risk-adjusted return compares with those of its peers.

Beyond Mutual Funds

Return concepts such as relative return, after-tax return, and risk-adjusted return may also be used for evaluating separately-managed accounts, hedge funds, and investment newsletter model portfolios.

The AlphaProfit Sector Investors' Newsletter, for example, tracks the total return and compounded annual return of its Core and Focus model portfolios. To provide Subscribers with a more complete picture of model portfolio returns, this newsletter also tracks the relative and risk-adjusted returns of the model portfolios. The newsletter's model portfolios are constructed and repositioned with a view to maximizing after-tax returns.

Summary

While total return and compound annual return are useful, they do not provide a complete picture of a mutual fund's performance. Metrics such as relative return and after-tax return offer insights on the fund's relative performance and tax-efficiency. Risk-adjusted returns enable investors to assess how a fund's returns stack up when risk is factored in.

Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. Opinions expressed herein reflect the opinion of AlphaProfit Investments, LLC and are subject to change without notice. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by applying any of the information in this report. The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Owners and employees of AlphaProfit Investments, LLC for their own accounts invest in the Fidelity Mutual Funds included in the AlphaProfit Core and Focus model portfolios. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from Fidelity Investments or other mutual fund companies mentioned in this report. Past performance is neither an indication of nor a guarantee for future results. No part of this document may be reproduced in any manner without written permission of AlphaProfit Investments, LLC. Copyright © 2006 AlphaProfit Investments, LLC. All rights reserved.