The typical RIA firm generates 79% of its new clients from referrals. This heavy reliance on networking is a natural dynamic in a business that revolves around people and trust. It is also a favorable dynamic for many advisors, as the expenses allocated to marketing and client acquisition amount to less than 9% of firms’ total costs, according to AdvisorBenchmarking’s 2003 Annual Study of RIA Firms.
In the news-laden business and geopolitical environments of the last three years, it seems that more advisors have begun embracing another marketing strategy to help lure new clients: media relations. Based on AdvisorBenchmarking’s preliminary survey of its focus group members in February of this year, 8.9% of advisors employ media relations as a marketing strategy. This figure is a significant jump from the 3.8% recorded at the end of 2002 and reported in our 2003 study.
In this issue and in the April Practice Edge, we will provide insight into how advisors can implement an effective media exposure strategy. In addition, advisors can receive the full report–AdvisorBenchmarking Media Exposure Series–by following the instructions at the end of this article.
Why the focus on the media?
It’s important to understand why many advisors have increased their media involvement. By examining the three primary reasons below that we discerned from our research, you can determine if, and to what degree, you should boost your media work.
Intensified competition from wirehouses. Advisors are finding themselves going up against giant institutional competitors with ubiquitous brand names and unsurpassed media presences. This threat has prompted many advisors to enhance their own credibility by gaining a media presence. Given the meager or nonexistent costs associated with a good media relations effort, many advisors have found it to be a worthy additional marketing tool.
Declining public trust. Investors’ trust has diminished significantly in the wake of the corporate and Wall Street scandals in the last few years. While independent advisors have largely benefited from this trend, many today are realizing the need to solidify their public trustworthy image. Being quoted in mainstream or trade media publications is a sure way to improve your image.
Increased awareness. Possibly triggered by the same reasons cited above, many trade groups, conferences, and publications have focused on media relations in the last two years, thus heightening awareness among advisors.
Before embracing media relations, be sure to set realistic expectations. As with referral generation, media reach is a long-term process that may take years to yield results. It is not a silver bullet that will generate new clients on day one. Further, you should not think of media relations as an effort that will singlehandedly generate clients; instead, think of it as a strategy that will supplement your other marketing efforts and credentials. Given the potential benefit and the relatively small amounts of time and cost required, it is definitely a strategy worth trying.
Secrets of the craft
There are four tasks on which advisors should focus to implement or improve their firms’ media reach. We will discuss the first–targeting and preparing for the media–in this issue of Practice Edge. Next month, we discuss the other three: reaching out to the media; speaking with the media; and utilizing media exposure to promote your firm.
Step one: Prepare a biography
The first order of business is to prepare a short firm profile and biography. This is the equivalent of a resume for job seekers. The biography is your opportunity to capture the areas of expertise that you and your firm can provide. Your biography and firm profile should include, among other things, a short career history, the focus of your practice, and essential facts and figures–such as number of employees, clients, assets under management, tenure as an advisor, and so on. You can view a detailed sample biography in the AdvisorBenchmarking Media Exposure Series.
Your biography will shape the way reporters refer to you in their articles. They will also use this information to determine when to go to you for quotes or industry-related information.
Step two: Define your media targets
The media has many forms. You should break down the media into basic categories to help you allocate resources, focus pitching efforts, and define the audience. One way to categorize the media is:
- Local: e.g., The Washington Business Journal
- Trade: e.g., Investment Advisor magazine
- National: e.g., The Wall Street Journal
- Television: e.g., CNBC
- Radio: e.g., NPR
Each media outlet has a slightly different set of game rules. Doing a television interview, for example, requires that you pay attention to your posture and hand gestures, among many other things. An interview with a newspaper reporter will not be influenced by your body language, but it does require that you articulate yourself in a more succinct manner to avoid being misquoted–a problem that doesn’t apply to TV interviews.