We have studied the multimillion dollar advisor (MMDA) as closely as a scientist observes the Javan rhinoceros, which has fewer than 60 left in the entire world. For the last 15 years we have watched multimillion dollar advisors in their native habitats, reviewed their financials, watched them in meetings with their clients, critiqued their marketing and put together business plans for them.
Where the MMDA excels is in marketing. Each one had a proven system for getting a steady stream of derrières in chairs (a phrase of mine). In fact, no one can get to the magic million dollar mark without a marketing plan that is dependable, repeatable and predictable.
Here is how MMDAs do it.
The MMDA consistently invests in marketing.
In most cases they have invested a lot of money. Multimillion dollar advisors spend big bucks on their lifeline, marketing. One firm we worked with allocated about $1 million per year to do the marketing for 12 advisors. Yes it is a lot, but it worked for them. They also got between 1,200 and 2,400 calls per year from prospects asking to set up an appointment to discuss their finances.
Did I mention each of the 12 advisors was a million dollar producer? Some were even at the $3 million dollar level. Clearly this was money well spent.
Contrast this with a call I got a few years ago from an advisor in Vail—she was complaining that she wasn’t getting any return on her marketing dollars. How much was she spending? A whopping $300. Not per month—but per year! This bought her an ad in the yellow pages of the local phone book. She said (duh!) that she had not gotten any responses from it!
I had two comments for her: If you are not getting any results why do you continue to do it? And you will need to spend a lot more than this to get the results you need.
My point: No matter what your level, even if you are just starting out, or making $100,000 a year, you will need a hefty marketing budget if you want to build your business. In the beginning this will be a big percentage of your monthly expenses. Once you get to where most of your new clients come from referrals, you will be able to back off this investment as a percentage of total expenses.
Here’s how we do it:
My marketing budget was a top item in my business plan for building up a practice in Rhode Island from scratch. (Also highly important was making sure I had a client service manager). In fact, during the first six months of launching my practice, I allocated almost as much money to marketing as I did to paying myself.
Today I only need to allot about 3% to 5% of our total expenses to marketing. When I started out, it was closer to 15%. I have seen advisors who will need to put 30% into the marketing budget to get the results they need.
A Plan That Works
MMDAs have a marketing plan that works for them.
First rule of marketing: All marketing is trial and error. What works really well for you may not work for me. All of the successful advisors had experimented with a number of different marketing techniques and found one that fit them well and fit their niche. The smart ones then stuck with what worked.
There are only a handful of strategies that we have seen top advisors use well to create the goal of a steady stream of derrières in chairs: radio shows, community college retirement courses, educational events and referral plans probably top the list. The radio shows and educational events work great for the extroverted advisor, who loves to get on stage. If you are more of an analytical introverted type, you will need to find something that can showcase your strengths, like a solid referral program.