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June 10, 2008 at 08:00 PM
As Senators John McCain and Barack Obama began their presidential campaigns, each set out a plan for themselves–including opportunities, weaknesses, messaging, analysis of competitors and campaign finances. While they sometimes had to adjust their plans during the primary season, each had a valuable blueprint to help them reach the goal of securing their respective party’s nomination.
Likewise, an advisory practice’s marketing plan contains opportunities and weaknesses, key messaging, market and competitor analysis and financial projections. Having a robust marketing plan in place will bring independent advisors one step closer to influencing how their clients and potential clients perceive them–and help advisors reach their goals.
Establishing a Marketing Plan is Crucial
Though independent advisors have long sought a way to increase the solidity of their client base through the use of effective marketing campaigns, most firms lack marketing savvy when searching for new clients. In fact, while a firm’s ability to have a clear marketing plan is fundamental to its survival, more than half (54%) of the advisors we surveyed have no marketing plan in place compared to almost every best practice (91%) have a marketing plan.
Sharpening Your Marketing Tools
One of the major challenges investment advisors face in today’s environment is how to market their firm’s financial products and how to create a sustainable process for attracting new clients without relying solely on referrals. Advisors depend on passive referrals from existing clients. For instance, in 2007, nearly half (45%) of new clients came from advisors “replicating” their existing clients via passive referrals. Currently, only a small portion of new clients originate from professional referral sources–12% come from CPA and attorney referrals and 10% are referred by another financial advisor or broker. However, as firms continue to grow, external referral sources should become much more important. A marketing plan considers these key partnerships and is a crucial part of positioning to and reaching out to potential clients in their target market.
Finding Your Market Niche
Finding your market niche enables you to develop areas of expertise and prevents you from being spread too thin. Many advisors, however, do not follow this advice. Eleven percent of firms have absolutely “no focus,” while 74% of firms consider wealth range to be a “niche” market. Alternatively, top firms are much more focused than their “average” peers.
