If your firm is looking to create or enhance its marketing programs to respond to revenue pressure caused by market volatility, you're not alone. When advisory firms experience revenue pressures due to volatile markets and fluctuating assets-under-management-based revenues, they often turn first to marketing.
This column is about marketing strategy. But before I get into what you can do to enhance it in the current environment, it's important to point out that the best time to be focusing on marketing is when the business environment is good, you have plenty of resources and you're not in a hurry.
Like the homeowner who fixes his roof when the sun's shining, firm owners should have marketing programs in great working order before they badly need them.
With that said, there's no time like the present if your marketing is not up to par. You'll be far better off starting today than waiting until the good times return. However, even if you're feeling pressure to generate new business — indeed, especially if you're feeling that pressure — it's important to create a proper strategy.
The 'Strategy' of Marketing Strategy
Let's begin by talking about what a marketing strategy is not. I can't count the times I've seen a firm launch a marketing initiative — let's say a podcast, a series of educational events, or an ad campaign — and call it a strategy. These aren't strategies. They're tactics.
Unless you're betting your marketing dollars on luck, the foundation for marketing to work best begins with a strategy. And strategies are built around clear, measurable key performance indicators (KPIs) that a firm wishes to move.
Before delving deep into KPIs, it's important to compartmentalize the three purposes of financial advisor marketing.
- Raise brand awareness. To get your name and your service in front of people who don't yet know you exist. These people may be aware that they need financial advice and may be looking for someone to fill that need, but they don't have you on their radar.
- Close existing prospects. These consumers know you exist, but they haven't taken action to schedule an appointment or buy your services.
- Generate referrals. The third purpose of marketing is to prompt existing clients to send you referrals.
Here's where marketing strategies go wrong.
Many firms make the mistake of trying to create one marketing program, or even implement one tactic that attempts to serve all three of those purposes. In other words, they believe there is one "silver bullet" that will help consumers know they exist, compel existing prospects to buy the service and encourage clients to send referrals.
Where to Start?
Mature marketing strategists know that three different programs need to exist for these three purposes. The problem is, when firms begin to build programs, choices must be made.
Are we going to start by developing brand awareness? Are we going to start by targeting the people who are already on our contact list but haven't signed up to work with us? Or are we going to target our existing clients to encourage more referrals?
Choosing which one to start with largely depends on how much money you want to spend and how predictable you want the results to be.
Raising brand awareness and generating interest in your firm is usually the most expensive strategy. Think of the cost of sponsoring a local charity event, for example. This could easily be a $50,000 spend. And that financial commitment is made without knowing exactly what the return on investment will be.
On the other hand, if your marketing push targets those on your contact list, you can expect each prospect that emerges to cost about $2,000 in time and tactics. If your budget is $10,000, know that you're going to get about three prospects from your investment.
