An Advisor Marketing Plan Where You Get New Clients (and Paid Up Front)

Traditional marketing like advertising can be expensive. It can be so expensive that few advisors ever advertise, relying instead on less expensive marketing approaches like generating referrals from existing clients and centers of influence. Or they focuse on a niche where they can build a brand and demonstrate expertise that attracts niche clients to them through an inbound marketing strategy.

Another alternative, though, is to deliberately craft a limited scope solution for clients, valuable enough that clients will pay for it, while giving the advisor the chance to demonstrate their expertise and begin to establish a relationship.

For instance, what if you offered clients the opportunity to get a customized, individualized Social Security analysis to help facilitate their Social Security timing decision for a flat $200… and then offer clients who find the meeting valuable the opportunity to work with you on an ongoing, comprehensive basis, at your usual “full solution” cost.

The end point of such an approach is that many “clients” will just pay for the lower-tier service and stop before becoming top-tier clients. However, many advisors already do “approach talks” and “introductory meetings” with prospective clients. And they do it for free, while trying to avoid providing any “real value” for fear of giving away too much of what clients are supposed to pay for.

Arguably the tactic of simply trying to deliver value and real solutions from the start can be equally or more effective in demonstrating expertise and establishing a relationship, except tha now, the advisor is actually getting paid to market themselves!

Traditional Versus Inbound Marketing

The traditional approach for marketing is outbound communication to prospective customers/clients about what it is that you do/offer and convince them why they should (pay to) do business with you. While outbound marketing can be effective – advertising is a $161 billion market in just the U.S. alone, it is also expensive and capital intensive, which makes it especially ineffective for independent advisory firms with limited resources.

In practice, most advisory firms opt out of that approach; according to the last Moss Adams/Investment News Financial Performance Study, the average advisory firm spends a mere 2% of its revenue on all marketing and business development activity, most of which is likely common expenditures like lunch and dinner meetings, golf, client appreciation events and similar relationship- and referral-oriented endeavors. In other words, they don’t’ do any form of direct marketing and advertising activity.

Of course, the struggle with traditional marketing for advisors is not helped by the fact that selling “financial planning” is a difficult proposition in even the best of circumstances. Financial services ranks at the very bottom of all industries in consumer trust, and it’s incredibly difficult to effectively communicate the value of a comprehensive, intangible experience that most people have never been through in the first place and have nothing with which to compare it. Worse, some have been through what they think was financial planning but was actually just a product sales experience in disguise).

Most people don’t wake up one morning thinking “Wow, I should really get around to getting myself a comprehensive financial planner today!”  At best, they have specific, finite problems, and only recognize a need for ongoing financial planning by getting those problems solved sequentially, over time, and eventually appreciating the value of a continuous advisory relationship.

To address this challenge, many financial planners have increasingly focused on a niche, moving into an area where they can establish a brand and reputation as a known expert in a limited space. This approach makes it possible to succeed at business development without expensive advertising or relying on client referrals alone (which don’t work when you’re just getting started and don’t have clients who can refer in the first place!).

In fact, specialized niches are especially conducive to inbound marketing for advisors, where the advisor doesn’t pay for advertising to get in front of prospective clients, but instead creates content to demonstrate their expertise. As potential clients seek  solutions for their unique problems, they find their way to the advisor’s content that solves their problems and conveys the advisor as a solution provider… an expert who specializes in people just like them and problems just like theirs.

The inbound marketing approach can be highly effective for those who are ready and willing to focus on a niche and establish some form of specialty. However, even as a generalist who is delivering comprehensive financial planning to a wider range of clientele, the concept of an inbound marketing approach that focuses on a specialized need relevant to prospective clients as a starting point for establishing a relationship is still relevant.

Getting Paid to Market Your Expertise

Imagine for a moment that you’re an advisor who generally works with prospective and current retirees. You have some good retirement expertise and credentials, and most of your potential clients come to you because they’re transitioning into retirement and are facing the typical range of decisions faced by people in such a situation. One option might be to take out ads in the local newspaper, advertising your services and expertise/experience for those looking for help in transitioning into retirement. Another might be to establish a focused niche with a local large employer, learning the unique aspects of their employer retirement plan options and developing a relationship with their HR department to specialize in the retirees from that particular company.

A third option, though, might be to create a simple service that would be relevant for your typical prospective client, which would be valuable enough that they would actually pay for it, and use that as a means to establish relationships and demonstrate your expertise.

For instance, imagine that you rolled out a standalone service to consult with people on how to maximize their Social Security benefits, a subject that is narrow and finite enough to lead to a concrete resolution in a limited time period, but complex enough to require assistance from an expert.

Your offering could be an hour-long meeting where the potential clients come in with their Social Security statements. You input their details into a Social Security software tool that can help analyze the situation, and then present the analysis live on a big monitor in the conference room. You collaboratively walk clients through the results, and determine how best to maximize their Social Security benefits based on their needs, their situation, constraints like the Social Security earnings test, and Social Security strategies like file-and-suspend and restricted application.

Clients can be scheduled using an online tool, one right after the other, in a set block of time every week (e.g., three one-hour slots every Friday morning from 9:00 to noon), and your fee of $200/hour for this specialized service is payable by check and due on the spot at the end of the meeting.

Consider the end point of having provided such an offering to prospective clients.

  • The advisor has demonstrated expertise while solving a specific pain point of the client.

  • The advisor has formed the basis for an advisory relationship by actually delivering value to the client, from the very start.

  • The advisor has shown the client that there is value to paying for the advisor’s time, knowledge and expertise, given the positive outcome and resolution of the client’s challenge.

  • By limiting the scope of the engagement in the first place, the advisor has not undermined the need and value for more comprehensive planning.

Instead, the Social-Security-planning-as-standalone-service has become something more like hors d’oeuvres, to whet the appetite and create a desire for the main course (comprehensive financial planning solutions) that may follow.

The Freemium Approach to Marketing Financial Planning

In essence, the “getting paid to market” approach is all about starting clients out with a straightforward solution at a lower price point, and then inviting them to participate in a more complex and sophisticated solution at a much higher price point. It is similar in concept to the “freemium” model: a core service is given away for free, in the hopes that a small percentage of people will “upsell” to the paying version of the product (think Dropbox, Evernote, or Skype).

 Of course, the caveat in the context of financial planning is that an advisor’s time does not scale the way that technology does, and advisors wouldn’t have the capacity to serve a large number of people for free in exchange for a small number of “premium” clients. As a result, the lower tier of service cannot be free, but it can be a limited scope for a (relatively) smaller payment that is still profitable.

As with any two-tier service, the reality is that a large number of people probably will not buy up to the higher tier, and instead will simply pay for the lower tier of service and walk away. But bear in mind, if this is the worst case scenario, the advisor is still getting paid $200/hour for each meeting.

With up to three new clients per week, all year long, that could be $30,000/year of (new) revenue coming in while the advisor demonstrates their expertise to one client after another, all while trying to upsell the client for the opportunity to work with them on an even more comprehensive (and more profitable) basis.

With 10,000 baby boomers becoming eligible for Social Security every day, getting referrals of three per week for a specific solution like this should not be a stretch, and making $30,000/year to market is sure better than the opposite!

Even if a large number of clients don’t upsell to the higher tier model, it’s still not necessarily bad news. In fact, if all the advisor ends up with is two types of clients— those who pay $200/hour for a limited service that ends with the meeting, and “A” clients who pay for their full comprehensive planning services—the advisor will arguably end up with a more efficient and profitable business.

After all, how many advisors still have lower tier “C” clients who, if you do the math, actually generate far less than $200/hour for the advisor’s time as it is, yet have been around so long they can’t be terminated as clients? Wouldn’t it have been easier if the scope of their engagement was more limited—for instance, just a Social Security analysis meeting—in the first place?

Nonetheless, if all the advisor does is a never-ending series of hourly meetings, the growth of the business may still be limited. In the end, the key to success with this kind of approach will be the advisor’s ability to upsell clients from the initial hourly limited-scope meeting to a more comprehensive, ongoing planning relationship at a higher price point. Yes, that will still be a difficult proposition. However, it certainly should not be any harder than the typical prospective client meeting that advisors go into now, trying to convince a complete stranger that it’s worth paying a significant sum of money (at least, to them) for an ongoing service that is intangible, hard to explain and which they don’t fully understand!

In fact, the getting-paid-to-market approach, where the advisor simply focuses on giving the client something of value (instead of worrying about “giving too much away”), and then expanding the relationship further down the road, may actually be easier to get a client on board for a comprehensive relationship in the long run. Why? Because by that point the advisor already has a foot in the door providing value and establishing a relationship, and the client has already paid something (where the first dollar is often the hardest to get) for acknowledged value.

In other words, it should be much easier to turn limited-service clients into full comprehensive clients (by simply expanding an existing relationship in which expertise has been demonstrated and initial trust has been established), than it is to turn strangers into comprehensive planning clients.

Yes, it may require advisors to learn how to explain and upsell clients who engage for a narrow service about the benefits of the broader service as well. Advisors will also have to learn how to manage a pipeline of people in different stages—since prospects for the initial niche solution are different than prospects who bought the first stage and are being upsold to the second.

The bottom line? Many advisors struggle to build relationships, demonstrate value, differentiate themselves or even get in front of prospective clients who don’t want to sit down to meet with an advisor because they don’t understand what financial planning is in the first place. So wouldn’t it be easier to gain the marketing benefits of demonstrating expertise and building a relationship with a potential client by just delivering value to them from the start? And getting paid for it?

So what do you think? Is there a limited service you could deliver to prospective financial planning clients that would be valuable enough that they’d pay you for it from the start? If you had a steady stream of clients paying for an initial service, do you think you could use that as a basis to persuade some of them to work with you at a higher tier? How does this compare to the time and effort you spend—and the revenue you generate—under your current marketing approach?

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