You walk into a Vegas casino and put a dollar in a slot machine. Pull the lever and BINGO! You win $5! Put in another dollar. Pull the lever. Shocked and delighted, you get another $5 back! As you repeat this process, this one-armed bandit continues to spit back $5 for every $1 you put in.
Let me ask you a question: If you stumbled upon this magical slot machine, how fast would you put money into it? As fast as you possibly could, right?
This same principle applies to your marketing, but there’s a trick to making it work. The key to doubling or tripling your business is already within your reach. It’s the data you currently have—but you have to access it, measure it, and make strategic decisions based on it.
Many financial professionals don’t know their marketing numbers at all. They continue putting money into the marketing slot machine, never bothering to see what comes out the other side. They’re able to get away with this because the margins in this business are relatively large compared to those in other industries.
Wide margins cover up a multitude of marketing sins. That, my friend, is a blessing and a curse.
If you don’t know your marketing numbers, there’s no possible way to know what buttons or levers to push when you want to grow your business. All you can do is cross your fingers and keep doing what you’ve always done . . . but there’s a good chance your business isn’t going to grow at all.
Your production will likely languish over time. As you continue pouring in money and effort, you’ll get frustrated with the lack of progress. Worse, you may be chasing shiny objects down the wrong path when all the answers to hitting your goals are right under your nose. You simply have to access them.
If you really want to grow your business, then you need to know your marketing numbers inside and out. Once you’ve tracked and consolidated these ingredients, you’ll be able to see exactly what marketing activities are producing the greatest results, and which activities are costing you more than they return.
What do I mean when I say you must know your marketing numbers? It’s not as simple as knowing how much you spent on advertising and marketing activities during the last 12 months. If you want to see real results, take a deeper look at the numbers.
Look at each individual marketing tactic on its own. One of my top advisors says it best: “Treat each of your marketing funnels as its own business. Hold it accountable to results. Treat it like the CFO of a Fortune 500 company would treat a profitable (or not) portion of his or her business.”
Many financial advisors conduct seminars, so let’s use that as an example of a marketing funnel. Know your numbers:
- How much does each seminar cost you?
- How many pieces do you mail?
- How many people RSVP?
- Of the RSVPs, how many actually show up at the seminar?
- How many potential clients does this represent (Buying Units)?
- Of those, how many set an appointment with you?
- How many that set an appointment with you, actually show up to their first appointment?
- How many first appointments turn into clients?
- What is each new client worth to you in Revenue?
- What is the cost to acquire a new client through seminar marketing? (Divide the cost of a seminar by the number of new clients generated by the seminar. For example, if the seminar cost is $4,000 and you get two new clients, then the cost to acquire a client is $2,000.)
The key is to focus on the right numbers and understand what they mean. Many producers focus on the wrong numbers or misinterpret their data. If a seminar response is bad, they may have a kneejerk response to quit doing seminars altogether. However, another look at the seminar funnel might indicate a positive ROI.
The big picture is your return on investment; however, all of the little numbers serve as diagnostics. Picture your business dashboard containing all of your funnels, each with corresponding flashing lights and gauges (numbers and data). The dashboard helps guide you toward adjustments and tweaks that will increase ROI over time.
Of course, you need to know similar numbers for every funnel, or marketing activity. If you run radio ads, track those numbers separately. How much does a 30-second spot cost? How many inquiries does it produce? How many of those inquiries turn into clients? What is their average case size? And so on.
Why track each marketing funnel separately? It’s simple—one marketing tool may tend to produce higher net worth clients and larger case sizes. Another funnel might have a higher closing ratio. Another might attract substantially more time wasters. You’ll never know these things if you lump all your marketing numbers into one big pot.
Analyzing the data in all funnels allows you to see which marketing channels are the most effective, which ones you should put more resources into, which ones need to be improved, and which ones might need to be discontinued.
Even better, this process reveals weaknesses in your funnels. Every process has a weakness, the key is to expose it. For example, if your data shows a big drop-off between the number of people who set an appointment and those that actually come in to see you, ask yourself, “Why are we losing 20 percent of the appointments we set? What is happening? Are they canceling, or are they no-showing? What can we do to make sure more appointments stick?” Once the problem is identified, you can go in and fix it. If you can’t see the problem point, you won’t have a chance at all to improve on what you’re doing.
Many times, I have gone through this exercise with producers I work with, and when we crunch the numbers, we have all the answers we need. I’ve had producers tell me their seminars don’t work—but once we collect the data and analyze it, we find out they’re getting a 5:1 return on their money. They should actually be doing more seminars!
I’ve also had producers who’ve just started doing Radio tell me they feel like they’ve failed, that Radio is just not for them. But when we dig deeper, we discover that the two clients they brought on out of the 10 first appointments still generated a great return on their marketing investment. Knowing these numbers enables these producers to pull the lever for a triple bar every time . . . they just didn’t realize it until they took a closer look.
Once you consistently track and analyze the numbers, you know 90 percent of what it takes to double or triple your business. Take action today by collecting the data from each of your marketing funnels, realizing your true ROI, and investing more in the most profitable ones. Make this year the one in which you pull the lever and get bells and flashing lights every time!