I get the question over and over. “What is the most important thing to do to build a successful practice?” I’ve been saying the same thing over and over, great marketing. But most people go, “Oh.”
They want a more exciting answer. So I went out to the proverbial studies to see if they backed me up, and here is what I found.
Most advisors became advisors due to their love of finances, not due to their love of marketing. Unfortunately, as in many things in life, there is a catch-22. You won’t be an advisor for long if you don’t know how to market. The road to a successful financial planning practice is littered with very bright financial plannners that never figured out how to market.
What do I mean by “how to market?” There have been several studies by Financial Advisor Magazine, Tiburon of Strategic Advisors, CEG Worldwide, Moss Adams and many others in the last few years looking at successful advisor practices and what makes them successful.
It ends up (big surprise) that marketing spending and growth of assets under management go hand in hand, regardless of the size of the practice. Small firms that spent 30% of their revenues on marketing grew their assets at a whopping 50% on average. Was there a difference for large firms managing $100 to $500 million? Nope, same thing. More marketing means more money.
It appears more and more advisors get this as a recent S&P Corp. study found that advisors spent more in 2006 than in 2005 on marketing.
OK, marketing is good we get it, right? So where is the best place to spend your marketing dollar? On branding? On radio? On seminars? Nope, it ends up all studies point at just one thing. And the good news is it’s the cheapest kind of marketing!
Contact. What? Contact! What like a phone call, email, newsletter or handwritten note?
Yep, and often! It turns out that the really successful advisors contact their clients or their prospects between 24.1 and 28 times a year (depending on which study you look at.)
They also found that while any type of contact is good, there is a type of contact that works better than all the rest. Many advisors I talk to guess it is email. When I ask why they tell me because it is fast, easy, cheap and convenient.
Hmmmm. That stuff all sounds good doesn’t it?……for the advisor. Advisors love fast, easy cheap and convenient contact because they can email their whole client and prospect data base in 1 second. That is the very reason that while email is an excellent way to communicate information to your clients, it is the weakest link in either building loyalty in your current client data base or wooing new clients.
Your clients and prospects know that it takes you very little time and effort to email them. Yes they appreciate your prompt delivery of information to them but they view your effort as minimal.
So what is the best ways to contact them? Phone call, personal meeting or handwritten note.
Hmmm. What do all of these have in common? They require time and effort. Interesting, the things that require time and effort are the very things that are linked to the most successful practices. They are willing to do the things other advisors are not willing to do.
Want to be successful in any type of business? Do the things your competitors refuse to do.
