Journal of Financial Planning: December 2013
For many of you, this time of year is the end of your fiscal year. Soon you’ll begin to review your year-end financial statements and determine how you measured up against your goals. Did you achieve your assets under management or revenue goal, or did you fall short?
If you easily meet or exceed your revenue goals this year because of market performance, you might start thinking that revenue will grow at the same pace year after year. When the stock market is bullish, AUM and revenue grow easily and organically, and this can lull some advisers into a false sense of security that revenue will continue to increase even if no effort is made to market their business. As we learned in 2008, this is a dangerous assumption.
If you do not meet your goals, you might analyze what went wrong and how you can make changes next year. Did you fail to market consistently? Did you not get in front of enough of the right types of people? Unless you make changes to your marketing strategy, you can expect the same results next year.
Now is the time to develop your sales and marketing strategy to achieve your goals for 2014. By following these five steps, you’ll be able to compose a comprehensive marketing plan before we ring in the new year.
Step 1: Establish Goals and Objectives
Start your marketing plan with your end goal in mind. Choose the three goals and objectives that will be most impactful on your business. Refrain from choosing too many objectives as you will either dilute your efforts or set yourself up for failure.
Ultimately, marketing should support revenue growth. For most firms, the primary goal will be a revenue, AUM, or client goal. Beyond a financial goal, your other two objectives will most likely fall under one of these 10 general areas:
- Branding and messaging. Developing a brand and message that attracts your ideal client and differentiates you from your competition.
- Awareness. Executing strategies that will get the word out about your company.
- Lead generation. Implementing campaigns to generate new prospects.
- Client referrals. Establishing processes and communication strategies to encourage referrals from clients.
- Center of influence (COI) referrals. Developing a method for meeting COIs and encouraging them to refer clients.
- Cross-marketing programs. Creating a program to market additional services to your existing clients.
- Niche marketing. Implementing strategies to reach a niche market or demographic.
- Lead nurturing. Developing systems and campaigns to stay top-of-mind with prospects.
- Transition marketing. Developing a strategy to communicate major changes in your firm such as a merger, acquisition, succession, or other transition.
- Recruiting. Establishing a strategy for attracting new books of business.
Step 2: Identify Strategies and Tactics
After you have identified your objectives, the next step is to identify the strategies or plan of action designed to achieve your goal. Just as with your objectives, you will want to focus on a few strategies that you can execute well and that will be most impactful to your business. You should develop one to five strategies to support each of the goals or objectives you originally identified.
Example strategy: Develop marketing communication materials that communicate our value and expertise in the niche market of self-employed attorneys.
After you define your plan of action, detail the individual tactics you will use to execute your strategy. You also should include who on your team is responsible for ensuring each tactic is implemented successfully and on time.
Example tactic 1: Create a new website that speaks directly to how we work with self-employed attorneys and differentiates our firm from other fee-only registered investment advisers. Responsible: John C.
Example tactic 2: Develop a digital pitch book that can be used on an iPad by all of our advisers that communicates who we are, how we are different, our process, our investment philosophy, and the solutions we provide our clients. Responsible: Dana F.
Step 3: Set a Budget
Next, set the budget required to fully implement your marketing plan.
Depending on your quality requirements and your resourcefulness, you can spend anywhere from zero dollars to hundreds of thousands of dollars. How much you should spend on marketing also varies depending on the size and stage of your business, and this number can range from 0 percent to 10 percent of annual revenue, depending on who you ask.
Consulting and research firm, Angie Herbers Inc., has studied the marketing expenditure of several hundred financial advisory firms and has determined the average marketing budget for an advisory firm to be between 1.2 percent and 5.3 percent of annual revenue. Use the table above to help estimate how much you should be spending.
For firms with more than $5 million in revenue, a good rule of thumb is to spend 2.5 percent of annual revenue on marketing. Whatever budget you set, make sure that your budget is in line with your revenue goals so you will see an overall positive return on investment at the end of the year.
Step 4: Create a Schedule
With a plan of action created, the next step is to establish a timeline for accomplishing each tactic. This can be done on a spreadsheet or on a calendar. Allow for realistic timelines. It is common to be overly optimistic and try to accomplish every tactic in the first quarter. This can rarely be accomplished and will be counterproductive to your overall marketing success.
Step 5: Measure Results
The final step in the marketing plan process is to measure your results and make adjustments throughout the year. Ideally, you should track the source of all new leads, prospects, and clients in your CRM and build the dashboards and reports that allow you to see the results of your marketing efforts in real time. If this is not an option for you, you need to be tracking this same information on a spreadsheet (see “Measuring Marketing ROI,” in the February 2013 issue of the Journal).
At the end of each quarter, review where the majority of new leads, prospects, and clients are coming from. You may find that the source for each of these types of contacts is not the same. For example, the majority of your new leads might come from your website, the majority of actual prospects who come in for an appointment might come from referrals from a center of influence, and the majority of new clients might come as a result of client referrals. Knowing this information will help you identify where to spend your time and money most effectively. Just be sure to give each campaign at least six months to a year before you determine its effectiveness.
The Clock Is Ticking for 2014
Assess your marketing efforts from this year and determine what you are going to do differently next year to achieve success. Whether you achieved your goals or not, January 1 provides a fresh start with new goals and new opportunities to be able to achieve them.
Kristen Luke is president and CEO of Wealth Management Marketing Inc. (www.wealthmanagement
marketing.net), a firm specializing in outsourced marketing services to RIAs, and co-founder of The Mercato (www.themercato.net), an online marketplace featuring do-it-yourself tools, templates, and training for advisers.