Where Advisors Go Wrong With Marketing
What do you want to know?
- Many companies make the mistake of creating a marketing program that will help them achieve all of their goals.
- Effective marketing strategies need to be very specific about which KPIs to hit.
- Deciding where to start depends largely on how much money you're willing to spend and how predictable the results are.
If your business is looking to create or expand its marketing programs to counter the sales pressures caused by market volatility, you're not alone. When advisory firms face revenue pressures from volatile markets and fluctuating assets under management, they often turn to marketing first.
This section focuses on marketing strategy. But before we dive into what you can do to improve it in the current environment, it's important to note that the best time to focus on marketing is when the business environment is good, you have the resources, and you're not involved. Print
Just as a homeowner repairs their roof when the sun shines, business owners need to implement effective marketing programs before they become necessary.
However, there's no better time than now when your marketing isn't up to snuff. It would be much better to start today than to wait for the good times to return. However, even if you feel the urge to start a new business, it's important to have the right strategy in place, especially when you feel the pressure.
The "strategy" of the marketing strategy.
First, let's talk about what a marketing strategy is not. I can't count the number of times I've seen a company launch a marketing initiative—say, a podcast, educational event series, or ad campaign—and call it a strategy. They are not strategies. This is a tactic.
Unless you're betting on luck, the foundation of better marketing starts with strategy. And strategies are based on clear and measurable key performance indicators (KPIs) towards which the organization wants to move.
Before we dive into KPIs, it's important to outline three marketing goals for financial advisors.
- Increase brand awareness. To get your name and services known to people who don't already know you exist. These people may know they need financial advice and may be looking for someone to fill that need, but they may not see you on their radar.
- Close existing leads. These consumers know you exist but haven't taken any steps to make an appointment or purchase your services.
- Create recommendations. A third marketing goal is to get existing customers to send you referrals.
This is where marketing strategies go wrong.
Many companies make the mistake of designing a single marketing program or even implementing a single tactic designed to achieve all three of these goals. In other words, they believe there is a "quick fix" that will help consumers learn more about their existence, convince existing potential customers to purchase the service, and encourage customers to send referrals.
Where to start
Savvy marketers know that there should be three different programs for these three goals. The problem is that companies have to make decisions when they start developing software.
Let's start building brand awareness shall we? Do we want to start targeting people who are already on our contact list but haven't signed up to work with us yet? Or will we target our existing customers to encourage more referrals?
Deciding where to start depends largely on how much money you're willing to spend and how predictable the results are.
Building brand awareness and generating interest in your business is usually the most expensive strategy. Take, for example, the cost of sponsoring a local charity event. This could easily be a $50,000 expense. And these financial commitments are made without knowing exactly what the return on investment will be.
On the other hand, if your marketing campaign is targeting those on your contact list, you can expect each inbound lead to cost around $2,000 in time and tactics. If your budget is $10,000, you can expect to get about three leads from your investment.
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