Shotgun approaches to marketing risk being expensive, time-consuming and nonproductive. They also fail to distinguish your firm in the market. “It is never a matter of just buying a list,” says Robert Sofia, cofounder of marketing consultants Platinum Advisor Strategies in Summerfield, Florida. “If you buy a list, you have the same people on the list that your competitor has on their list; that’s all you get. It doesn’t mean you can’t do something with that list. Sometimes there’s a place for that, but that’s not the way to attract your ideal client.”
A better approach is to plan your lead development effort strategically, according to Marie Swift, president and CEO of Impact Communications Inc. in Kansas City, Kansas. Her firm works with advisors to identify their strengths, weaknesses and goals. By spending some time on those themes and following up with a formal marketing plan, it’s easier for firms to execute more consistently, she says.
1. Understand your business and clients
There’s too much sameness in the financial advisory business, Sofia explains. Too many advisors copy successful firms’ strategies and tactics with the hope of replicating their success. A better approach is for an advisory firm to consider its own motivations and competitive advantages. It’s an in-depth process that can benefit from third-party coaching, he says, but it’s worth it “because most advisors, if you ask them what makes them different, will tell you something that every other advisor will tell you.”
That same review process can help identify better prospects and clients. Swift cautions that trying to adapt to every client and match their philosophies will backfire because the prospect or client will sense the lack of genuine identification. She encourages advisors to instead develop mission and vision statements and then identify their ideal client. Profiling desired clients clearly “will keep you to the plan of courting those particular people instead of the universe of people in your community or neighborhood,” she says.
Reviewing existing clients can reveal valuable patterns, says Sofia. The advisor might learn that a good percentage of his clients are C-level executives, widows or some other identifiable group. That information can reveal an unrecognized market expertise and advantage, which in turn provides a foundation for building a prospecting strategy.
That’s the approach New York City-based Lenox Advisors Inc. took several years ago. The firm’s partners developed a scoring system that would help them rank clients and prospects, says partner Tom Henske. The process led to the realization the firm “wanted clients that were young, making a good amount of money, laser-focused on their work and didn’t have a lot of free time to do their own planning — all the things that make us, as financial advisors, relevant,” he explains. Wall Street executives fitted the profile perfectly and that cohort became the core of the firm’s clientele.
Other advisors use different characteristics to define their target markets. Randy Scritchfield, CFP in Damascus, Maryland says his clients are usually age 55 or older and planning for retirement or already retired. He doesn’t use income or investable assets as the most important features in client selection; his segmentation is more subjective. He divides prospects into three categories: do-it-yourselfers, collaborators and delegators. He won’t work with the first category, will consider the second and prefers the third. Delegators, he adds, are the “ideal client.”
2. Plan your messages
Identifying your target market is a critical first step, but how do you connect with them? Swift advocates what she calls the three M’s: market, message and media. The message must resonate with the market and reach them in a way that will attract their attention. She uses the example of a funnel. At the top of the funnel prospects become aware of your possible role as a resource and start to consider your services. Ongoing communication — drip marketing — can help move these prospects down the funnel, even if they’re not ready to commit to working with you yet. “And, as they come down that funnel, they’re finally going to end up in, ideally, this bucket called decision-making,” she says. “(Here) they’re doing their due diligence about their decision, checking you out online, talking to friends and family, other people that you may refer them to, checking with their other professional advisors.”