Contentment or Complacency?

For those who wish to create their own market presence, Megan suggests that advisors do for their business as they would do for their clients. "Begin with a plan," she says. The plan should incorporate your business vision and service models, distinct and differentiated messaging, definition of your optimal client, measurable goals, and the strategies and tactics designed to achieve those goals.

She breaks all marketing plans into three main components:

1. 1. Brand infrastructure. It is important not to stop at the creation of a logo and collateral material, but to think about the identity you want to create in the market, your messaging, your website, your brand collateral and your social media profiles.

2. 2. Content creation and delivery. The language many advisory firms use can be mushy or too similar to other advisors or financial service providers.

Your intellectual capital and expertise is unique to you. Use that power, and think about how the words and images will resonate with the market as well as internal stakeholders. It's also critical to think about the regularity and timing of messages.

A thoughtful approach to digital advertising, public relations and social media can create a very high impact. So too can the use of digital vehicles to gather intelligence on the marketplace and to perform helpful analytics.

Once a plan is in place, Megan recommends developing actionable and measurable tactics. While the number of referrals is important, it is not the only objective of an effective marketing plan. Client loyalty is a critical leading indicator, as is brand presence.

Studies show that when a professional service business is one of the top three providers in their market, they will get twice as many opportunities to do business as the fourth next firm. This does not require the firm to be the largest in size, but the largest in presence.

What to Do

Key to an effective plan is making a resource commitment to execute the plan. This means money and people. Advisory firms typically spend less than 2% of their revenues on marketing, while large retail firms such as Schwab, Fidelity, Vanguard and others spend orders of magnitude more.

Clearly, small advisory businesses do not have the ability to compete on that level in terms of dollars, but targeted communications spending allows you to convey a differentiated message in the communities you choose to serve. Think in these terms — if you aspire to grow your top line by 20% year-over-year, it will be difficult to generate that volume if your marketing is just a whisper.

Megan emphasizes that marketing does not begin and end with advertising and public relations. To convey who you are and why people should do business with you, develop your brand. Your brand begins with your public image but is realized ultimately by how you touch clients and prospects.

Consider how your physical office looks relative to the message you wish to convey — does it say cheap and tacky, or opulent and excessive? Do you communicate directly or abstractly? Does your staff welcome clients in a way that demonstrates their importance? Does your reporting reflect all that you claim to do for the client or does it emphasize one dimension of the relationship, for example investment management? Is your sales process consistent with how you want to be seen?

The point is that small efforts combine to make a big impact.

The financial advisory profession is experiencing a material transformation from practice to business. Firms that present themselves to the market as reliable, relevant and responsible enterprises likely will prevail. Advisors who do not take control of their identity will find it harder to compete with more assertive contemporaries.

While you always want the potential for referrals from happy clients, it's important to recognize that referrals require coincidence and serendipity. A disciplined approach to marketing and branding will help advisory firms achieve greater results.