Fax Machines and Unsubscribe

I find the diffusion of technology across capital markets both fascinating, but also perplexing. On one side of the business (the trading side), you have what appears to be an unlimited appetite to invest, innovate, and spend. You have firms pushing the limit to get ahead: building radar towers to speed up execution, and there was even talk of building a particle accelerator to shoot order through the earth, making trading just a little bit faster (you can go through the earth a lot faster than you can go around it).

Then we look at the communication side of the business. Information is being distributed and consumed in essentially the same way it was 10-20+ years ago. There are still several brokerages who print and distribute hard copies of written research. I’m sure there are still clients who prefer to receive and consume it in the same medium. That being said, email was the last major innovation in information distribution technology, but how we use it largely hasn’t changed since it was first introduced.

For brokerages, email has become the main way they distribute information. For an industry that was thinking about building particle accelerators to trade, it’s a little bit perplexing to consider that most information subscriptions in this industry are managed off of Outlook distribution lists, or a combination of Excel, Word, and CRM. While many equity research distribution lists have migrated to a centralized CRM, almost no other lists have. Lists on the sell side exist in a number of locations, all isolated, and rarely accessible to anyone but the owner, including those who find themselves on one and might want to get off.

For funds, email has become a necessary evil. It’s where they manage all the information they receive externally and internally, but it’s a disaster to organize and control. In fact, email has gotten so bad for clients that I had one client (a notable PM in the US) show me his fax machine. That’s right, he’s getting so many emails that he’s given up on even trying to control his inbox. He has only given the fax machine email address to a few people, and it auto prints. If it prints, he knows its important. In addition to the fax machine, he’s also gone through around eight email addresses, each one was supposed to be ‘secret’, but once an email address is known, there’s nothing you can do to stop someone sending to it. I can only guess that, as of this writing, he’s on his 9th.

However, you might be one of those poor individuals in this industry who decides you’re going to try and manage your inbox. After all, the email client isn’t a single application – it’s a series of applications intelligently bundled together. It’s your calendar, content management system, collaboration system, contact management system, distribution tool, compliance system, and a whole suite of other applications that are hard to live without.

What do those poor souls do who try to manage their inbox? They use one of the only tools they have at their disposal: Outlook rules. These rules allow you to set conditions around when content comes in, and what to do with it based on a variety of parameters. One of the most commonly used rules is to sort content based on the sender (i.e. who it came from). Let’s say you receive an email from “[email protected]” – you can tell Outlook to file that email directly into a folder (“Street Contxt Thoughts”), or even (gasp!) trash. Individuals will use these Outlook rules until they run out of space, or give up trying to manage them (it’s quite common to see clients who have 100+ rules).

The need for rules is obvious though – since there is no way for recipients to easily control what they are receiving from the point of production (i.e. they can’t access the distribution list or their subscriptions), they have to manage it at the point of consumption. While it will take some time to make subscription and interest management more elegant (we’re working on it!) there is still some low hanging fruit that is much faster to implement. This industry really hasn’t adopted one of the most basic practices of effective email communication: the unsubscribe button.

In every other facet of your life, including your personal life, it’s easy to manage what you are being sent. At the bottom of every bulk/blast email there is a little button that says “unsubscribe”, which allows you to remove yourself from the list. In fact, with the new CAN-SPAM regulation (US FTC regulation), it’s actually a requirement for any kind of ‘commercial communication’. In capital markets, however, at best you often see “if you wish to unsubscribe, please email so and so at our firm”. That’s neither easy nor quick – and sometimes, it doesn’t even work. Most of the time however, you won’t see anything. Most recipients who wish to be removed will simply reply to the author, and say “please take me off your list”. If that doesn’t work, they’ll fall back to the Outlook rule, and essentially put the sender on auto-delete. If that doesn’t work? Give up and try to ignore it (or buy a fax machine!)

Now, if you’re on the sell side, many of you are thinking “but I want to stay in front of my clients – I’m not sure if I want them to be able to unsubscribe” – but the problem is that by sending them content they don’t want, you may end up either on auto delete, or labelled spam. Then when you really have to get through (for a deal, for instance), you won’t be able to. Isn’t it better to allow the client to manage their subscriptions, and let them see what they are getting, and adjust it as their interests change? Unsubscribing is perhaps one of the strongest indications a client can give you that they aren’t interested in that particular topic or theme.

I can tell you I see this first hand all the time. Even for myself, everyone who I send to (you!) can unsubscribe from my list at any time – in fact, there is a link at the bottom of this very email (please don’t all rush there at once!). I’m not holding anyone hostage, and I encourage you to unsubscribe if you don’t find it valuable – for selfish reasons. It helps me understand the effectiveness and interest in the content I’m sharing.

One of our missions is to improve the way that subscriptions and interests are updated, shared, and managed. Short term, that means simply bringing an industry that lives off distribution lists the ability to add ‘unsubscribe’ to their notes. If you’re already a Street Contxt user, that can be turned on for your account at any time and it’s included with your license. It’s fully whitelabeled, and branded with your logo. So if you don’t already have unsubscribe functionality in your content, think about adding it. Want to know how? Just reach out and I can connect you with our support team. Sorry if you’re not a client, you’ll just have to figure it out on your own!

It’s better for the sender, and it’s better for the recipient.

For an industry that wants to build particle accelerators, subscription management, and an unsubscribe button, shouldn’t be too much to ask for.

Blair Livingston
Street Contxt

Hit The Street

Cut through the noise and avoid information overload.