Measuring Marketing ROI

Journal of Financial Planning: February 2013


The question, “How do I measure the return on investment of my marketing dollars?” is a difficult one to answer, because most financial advisers acquire new clients as a result of a combination of coordinated activities, not just a single campaign. Despite its complexity, measuring marketing ROI can be done. This article presents a guide for getting started.

To demonstrate the complexity of measuring which marketing campaigns are effective and which ones are not, consider this example:

You host a radio show each Saturday that reaches an audience of 15,000 people per week. One audience member is a potential prospect, John, who has been listening to the show live or through podcasts for the last two years. By listening to your radio show, John learns about your upcoming workshop and registers for the event.

After attending the event, he receives your automated, follow-up “drip” emails that promote your “second-opinion” service, through which you review a prospect’s current situation free of charge. After the fourth drip email, John clicks the link and schedules a second-opinion appointment.

You meet with him and determine that because his current net worth is tied up in his home and his company’s 401(k) plan, and his focus is on recovering financially from a divorce, paying off debt, and saving for his children’s college education, he doesn’t require the type of service you provide. Although he doesn’t meet your ideal client profile, you add him to your monthly email newsletter list. In addition, because you both are avid cyclists, you connect on LinkedIn to stay in touch about upcoming cycling events.

Eighteen months later John’s remaining parent dies and he inherits $1.8 million. He’s not sure how to handle the financial, tax, and estate planning implications. Because you’ve stayed top of mind through email and LinkedIn, you are the first person he thinks of to help him with his new situation. He reaches out to you, comes in for a meeting, and decides you are the right adviser for him.

The question is, which campaign should get credit for this client? Is it the radio show, the podcasts, the workshop, automated emails, second-opinion campaign, email newsletter, or LinkedIn? The answer is “yes,” and therein lies the challenge of measuring the effectiveness of your marketing efforts.

So, how do you even begin to evaluate what is working and what is not? Numerous systems of measurement exist, and you can choose from varying levels of complexity and cost, ranging from a simple spreadsheet to advanced marketing software integrated into your CRM system. If you are like many advisers, marketing is not your forte and you would like something simple to maintain that provides you with the information you need to make sound marketing decisions.

Consider this a beginner’s guide to measuring marketing ROI. It outlines the steps needed to create a marketing measurement program that will provide the information you need today and positions you for more sophisticated marketing measurement programs in the future.

Choose a Methodology

Before beginning any measurement program, decide how you are going to measure your marketing efforts. Perhaps the simplest way to measure is to attribute success to the initial marketing campaign in which you added a prospect or future client to your database. This is often referred to as “tracking the lead source.”

Almost all CRM systems have a “lead source” field you can use to track this information. Each time you enter a new name into your contact database, include the source for that contact. If you cannot track this information in your CRM, or need to record more detail, a simple spreadsheet will work.

Create a spreadsheet with the following columns:

  • Name
  • Initial contact date (the date you first added the prospect to the database)
  • Lead source (how the prospect learned about your company)
  • Qualified (whether or not they are a qualified prospect)
  • Stage (examples include prospect, initial call, scheduled an appointment, completed an appointment, client, closed-lost)
  • AUM (estimated assets that will be transferred
  • Close date (the date the prospect became a client, was determined to be unqualified, or said he/she was not going to work with you)
  • Notes (any additional information you want to include)

Every time you learn the name of a new prospect, add him or her to the spreadsheet and fill out as much information as possible. A prospect should be defined as any name you acquire as a result of your marketing efforts, including referrals and personal networking. It is better to add more people than fewer, because a robust list will help you identify the most successful marketing channels, which may be efforts you don’t even consider marketing, such as attending your child’s school’s PTA meetings.

Continue to update the spreadsheet as you learn more about each prospect. Some prospects may stay on your list for several years, and that’s completely normal. Don’t label a prospect as “closed-lost” unless he or she is unqualified or specifically says they aren’t going to work with you. Otherwise, keep them on the active prospect list indefinitely; you never know when they may become a client.

The advantage of the “tracking the lead source” methodology is that it is a simple and easy way to track your efforts and it clearly illustrates which of your lead-generating campaigns are working and which are not. The disadvantage is that it unfairly minimizes the effectiveness of marketing campaigns focused on nurturing the prospect relationship, instead of generating leads, such as email marketing and social media. While tracking by lead source won’t provide a complete picture of your marketing efforts, it is a good foundation to build upon as you become a more sophisticated marketer.

Establish Goals

To begin measuring by the initial campaign method, you need to determine what you consider success so that you are accurately measuring against a goal. This starts with establishing your primary goal for the year—perhaps it is achieving a certain level of AUM—and working backward to determine secondary goals.

Secondary goals are usually client, appointment, and prospect goals that will most likely need to be met to achieve your primary AUM goal.

These simple calculations can be used to establish the secondary goals that support your primary goal:

AUM Goal ($)/Average AUM per Client ($) = Client Goal (#)

Client Goal (#)/Appointment Close Rate (%) = Appointment Goal (#)

Appointment Goal (#)/Prospect-to-Appointment Rate (%) = Prospect Goal (#)

If you aren’t sure what your appointment close rate or prospect-to-appointment rate is, make your best guess. You can tweak these numbers from year to year as you get a better understanding of what these rates really are for your business.

Define Performance Indictors

After your primary and secondary goals have been established, identify the performance indicators you will use to gauge progress toward—and the ultimate achievement of—your goals.
These performance indicators should be a mix between measuring actual results compared to the goals, measuring your progress toward each goal, and measuring which activities are most successful in helping you achieve your goals. The performance indicators you choose need to provide meaningful information to help you track success and make decisions regarding your marketing efforts.

Some indicators you may choose include:

  • Actual AUM vs. AUM goal (from new clients)
  • Actual clients vs. client goal
  • Actual prospects vs. prospect goal
  • Actual appointments vs. appointment goal
  • Prospects by lead source
  • Clients by lead source
  • Qualified prospects by lead source
  • AUM by lead source

Analyze Campaigns

On a quarterly basis, review which marketing campaigns are achieving the best results. It may be helpful to create a dashboard of charts that will let you easily examine and interpret the results of your marketing in one glance.

In the beginning, analyzing campaigns will be a difficult exercise, because although you will have exact numbers, the information will not necessarily illustrate an accurate picture of the situation. For example, the results may not be accurately showing which campaigns are most successful if the sales cycles differ in length, creating an inherent lag in the results. Workshops tend to have a short sales cycle while networking can have a long sales cycle. Because of this, the analytics would show workshops in a more favorable light in the beginning, but they actually may be less successful in the long run once enough time has passed to see the results from networking.

Another possible error in analyzing results is that some campaigns may seem more successful in that they generate more leads but result in fewer clients as a percentage (such as workshops), while others will generate fewer leads, but result in a higher percentage of clients (such as referrals). The longer you diligently track your data, the more accurate the analysis of the information will become.

Limitations of Measuring Your ROI

At the end of the year compare how much revenue resulted from each lead source to how much money was spent on each campaign and you will begin to be able to calculate the return on investment in hard dollars. But keep in mind that there are limitations to this methodology and it may not show a complete and accurate picture.

Not all marketing activities are directly correlated to performance. Therefore, some campaigns you spend time and money on will appear to have no value and no ROI. While many marketing activities may not directly result in generating a new client, they are vital pieces of the combination of “touches” that contribute to new client acquisition. The methodology described here only takes into account lead-generating activities.

Remember, because a sales cycle can be many months or even years, it is important to recognize that these marketing analytics have an inherent lag. Success should be measured not just in terms of AUM, but also in terms of how many qualified prospects are generated from marketing activities with the hopes of turning those prospects into AUM in the future. It will take several years to gain an accurate understanding of exactly where clients come from, so analyze your activities from a global perspective in the first few years.

Measuring marketing is an ongoing process of refinement and development. Getting started with the steps mentioned in this article will create a solid foundation. From there, plan to integrate your marketing metrics into your CRM so you can track all activities for a prospect (newsletters, events, etc.), and not just the lead source.

You also may want to track various analytics for each type of campaign (event registrations, open rates, number of Facebook “likes,” etc.). And if you become a really sophisticated marketer, you eventually will want to use marketing software that integrates all of your online and offline marketing campaigns into one platform to analyze the history and interdependence of all of your marketing campaigns and how they work together to ultimately result in acquiring a client.

But for now, start with the steps mentioned here to begin understanding which of your lead-generating marketing efforts are working and which are not. It will help you feel more in control of your marketing dollars.

Kristen Luke is president and CEO of Wealth Management Marketing Inc. (, a firm dedicated to providing marketing strategies and support for independent advisers. Download a free copy of Wealth Management Marketing’s Excel-based marketing dashboard at


Professional role
Marketing & Communications