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December 01, 2010 at 07:00 PM
Almost daily, financial advisors adopt marketing tactics that they hope will make them millions—tactics requiring as little effort as possible. Most advisors are in quite a quandary: They hate or are completely ineffective at marketing, but they realize that marketing is absolutely critical to their success. Typically, they neglect marketing until the last minute (the way a teenager procrastinates over a homework assignment) and then they look for a short cut.
The following strategies are just about guaranteed to fail. I’m sure that you probably know someone somewhere who used one of these strategies to build a million-dollar practice—but I assure you it was the exception, not the rule.
Direct Mail for Lead Generation
Logic: You’ve received a hundred e-mails promising you “Million-Dollar Leads.” What’s the harm in buying some leads and mailing them all a letter? After all, “if I only get one client out of it, it’ll be worth it.”
Why It Doesn’t Work: First, at best the list might be 50% to 80% accurate. Second, because of modern-day “Do Not Call” restrictions, you can’t call them—which is considerably more effective (and less expensive) than direct mail. Third, FINRA advertising rules make it very difficult to create a compelling message. In order to have an effective direct mail campaign, you have to market a product (not a service), and the product must have a demonstrable benefit like a guaranteed return. That is clearly not going to fly.
Advertising Key Words
Logic: “I’ll secure a really interesting domain like denver401k.com or rolloverspecialists.com, I’ll buy some Google Ad Words and I’ll only have to pay a couple of bucks for every lead that comes in.”
Why It Doesn’t Work: You’re hoping to find wealthy investors ($200k+) who are sophisticated enough to use the Web, but too unsophisticated to ask friends or professionals for a referral to a financial advisor. I wouldn’t bet on finding them.
Appointment Generating Services
Logic: You receive a phone call from an “Appointment Generating Service”—they promise to call qualified investors who are not on the “Do Not Call” lists, interest them in your service, and schedule an appointment in your office.
Why It Doesn’t Work: What planet are you living on? Seventy-two percent of all Americans are on the National Do Not Call Registry, and I’m willing to bet that the other 28% are probably not very wealthy or smart—otherwise they would have been smart enough to visit www.donotcall.gov to add their phone number. Also, what makes you think that a $12-per-hour telemarketer can build rapport and confidence with a high-net-worth investor?
Yellow Pages Advertising
Logic: “I’ve got to do something, and all these other financial advisors are listed in there. Someone must be calling on these people.”
Why It Doesn’t Work: I haven’t looked in the Yellow Pages in over four years. Before that, I opened up my local Yellow Pages about once a year. Traditional Yellow Pages advertising is plummeting. Online advertising through Google Local, YellowPages.com, etc., is accelerating because sophisticated, wealthy people are more likely to search online than browse through the Yellow Pages. I’m sure that one of 1,000 financial advisors can share how they got a $500,000 senior from a Yellow Pages ad, but I think your odds of winning the lottery are probably better.
Radio Advertising
Logic: Every financial advisor knows at least one other advisor who has made it big on radio—not by buying 30-second spots, but by hosting a 30- to 60-minute show. You’ve heard these shows; you are surely smarter than them and can give more solid advice. It’s a little expensive but, “If I only get one client out of it, it’ll be worth it.”
Why It Doesn’t Work: There are two major keys to being successful on the radio: personality and station. You either have the personality for radio or you don’t. Finding the right station is critical and there is no science to it. Some very successful advisors who have used radio have not been able to replicate their success in new markets or after a year or two away from the mike. Also, you have to know that radio is going to generate nine people who want to trade stocks or bonds for every one person who wants to rollover his 401(k).
TV Advertising
Logic: “The local cable company will give me a few hundred 30-second spots for only a few thousand dollars—what a deal. Everyone in town will see me (and be very impressed with how important and successful I am).”
Why It Doesn’t Work: How many times in your life have you written down a phone number from a TV commercial and called it? Maybe once or twice, maybe zero. Wealthy, sophisticated investors are just as discriminating as you are, and equally wary of responding to TV commercials. Bottom Line: In my 12 years of working with financial advisors, I have never, ever had one advisor say that TV advertising was worth it. Never.
