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.