#FA Success Ep 326: Finding Marketing Success By Building Spreadsheets To Track That Advisor Data, With Erica Pauly

Resources Featured In This Episode:

• Erica Pauly
• Track That Advisor
• Track That Seminar
• How Do Financial Advisors Actually Spend Their Time And The Limitations Of Productivity?
• Tracking Your Trek: Looking Backward to Determine Your Forward by Erica Pauly
• Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones by James Clear

Looking for sample client service calendars, marketing plans, and more? Check out our FAS resource page!

Are you a successful financial advisor, or do you know of one that would be a great fit for the Financial Advisor Success podcast? Fill out this form to be considered!

Full Transcript:

Michael: Welcome, Erica Pauly, to the "Financial Advisor Success" podcast.

Erica: Thank you, Michael. I'm so excited to be here.

Michael: I'm really excited about today's episode and getting to talk about, dare I say, nerd out for a bit, on marketing data. Not just marketing strategies, but marketing data.

Erica: Yeah!

Michael: It's a funny thing. So, we've done this research study on advisor marketing through Kitces platform, we've been through 2 cycles of it, we'll be doing our third version of it next spring, where we go to advisors, and we ask for just some fairly straightforward information. Like how many clients did you get and how much revenue did it generate, and what marketing channels were you engaged in to generate these clients, which clients came from which channels, and to me, just fairly straightforward data. So, they can say, "I did this event and I got this many clients, and I did this website thing and I got this many clients." And what we find every time we do the study is it is really hard for most advisors to answer what candidly I don't feel like are terribly challenging questions around how many clients did you get and where did you get them from, because most of us have no tracking for...it's not even we don't have any data. We don't have any tracking for it. We don't have any systems to keep track of where are clients coming from and where is new business coming from, so that nerds like me can then do marketing studies to report out what's working and even just for us internally so we can figure out what's working, so we know here's the thing to double down on and here's the thing to dial back on. So, I know you have spent many years now literally building out tools and a platform for advisors to track data about what's going on with their marketing. And so, frankly, I'm just really excited to talk nerdy talk about marketing data and all the opportunities that come when you actually start keeping track of what's actually working or not as you're trying to grow your advisory business.

Erica: Mm-hmm. And I'm excited too. I was telling my husband, I'm like, "No one knows what I do." And I'm so excited that you get excited about these same things, because people never remember what I do. They're always like, "Oh, how's your work?" I'm like, "It's fantastic, but I'm not going to go into it because it's real complex." But it's so fun being with a fellow data person. So yeah, let's start the conversation.

How Erica Helps Advisors Track Marketing Data [06:15]

Michael: Well, let's start right there. So, for an advisor audience that hopefully gets it a little bit more than our general social circles, what do you do?

Erica: I know. I feel like it is my job to kind of rewrite the narrative of data analytics, data storytelling for financial advisors. So, I own a company called Track That Advisor. And what we're doing there is yes, we have a platform. We build trackers for advisors to track all their marketing stats. So, where is the lead coming from? What are we spending on it? What's happening in the sales cycle? The business that we write from it? So, they have a place for it. Then we're providing dashboards and pretty charts and reports. But then, I'm also analyzing it for them. So, it's kind of a 3-part system. We create the area to track it. We give them their reports. And then, I'm coming in on the backside and saying, "All right. This is what they mean." And if you don't have 1 of those 3 steps, it's really, really hard to hit goals and it's really hard to even know what your goals should be. And that is what we do at Track That Advisor, is really equipping them with the tools to track it, helping them see it visually, and then explaining it to them so that they can pivot and move and shift and make sure they're hitting goals or getting permission to change them.

Michael: So, help us then get a little bit more granular of really, what are you measuring? What are you tracking? How does this work?

Erica: We are tracking from the moment a lead sets an appointment. We are getting the high-level numbers. Let's say you do a dinner seminar, and we say, "Great. How many mailers did you send? What is the number of people that registered or show up?" At that level, I just want numbers. Once they set an appointment and they get on your calendar, we're actually following that lead and looking at historical data, what they do from day 1. When is the appointment? Did they keep it? Did they set a second appointment or were they qualified? Looking at if they're qualified or not, and that depends on the office. Some don't do that. Moving to a second. Moving to a third. Did they become a client? And then, once they say yes and we do the apps, we're following the entire application process. So, how long is it taking from the day that they said yes to actually submitting it? And that's on the insurance side, but also looking at managed money. How long is that taking? And then, how long does the entire process, from commitment of yes through getting it issued, paid, delivered, and then what happens thereafter. So, really looking at the marketing side of things. We don't dive too much into product-specific stuff, but looking at from day 1, they say they're interested and what happened with them. And then, all the reporting is looking at it by a marketing funnel. If you're a multiple advisor office, we're looking at it by advisor. What is the percentage of production this advisor's bringing in? What's their stick rate, their close rate? What are your ROIs? So, we can dive really, really granular into all of that stuff once the tracking itself is coherent, basically.

Michael: I'm struck as you're describing that, just even the...I don't mean this as a negative way for advisors that are struggling with tracking even at this level. But even the most basic data, how many people contacted you last year? Of those, how many were actually qualified prospects, so we can get down to how many people did you talk to that really might have been a good fit? And of the people you talked to that were qualified prospects, how many of them actually became clients? Even when I talk to a lot of advisors about what's your close rate, I hear a lot of, "It's pretty good. It's above 50%." I'm like, "Well, cool. Above 50% can be 55% or 75% or 95%. What does it actually come out to be when you do the math?" They're like, "I've never done math. I don't have that data." I just know, I feel like more than half the people I talk to become clients. At some level, that's cool. But, I think as you highlight well, when you start trying to go...well, A, just sometimes when we actually look at the data, we realize, "Oh, maybe my close rate's actually not as good as I thought, or ironically, maybe my close rate's actually so high that I'm probably underpriced and need to raise my fees," because you actually...if you close 95% of your prospects, you're doing something wrong. No joke. If you're closing 95% of your prospects, you are not priced high enough. There should be some price tension. Some people should decide you're not worth it. If everybody thinks you're worth it, you're underpriced. So, sometimes you can learn something from that data.

But when you go 1 step deeper, hey, you've got 3 advisors in your office. Do they all close similarly? Does 1 of them do better than others? Does 1 have a better follow-through on prospects actually going to a second meeting in the first place? Do you know? And a lot of the time, we don't. And so, when you get down to, okay, how consistently is this happening across your firm, across your different advisors, or how consistent is it across your marketing channels? Because often it's not or just some channels produce more volume of leads, but they might be lower quality leads. But maybe you get some really good ones, but you got to sort through more of the chaff to get to the wheat. If you don't keep some data on it, just getting to those core questions, like how many leads, how many were qualified, and how many turned into clients, and ideally how much revenue did you actually get from them? Is really hard for most advisors to actually bring together.

Erica: Mm-hmm. Well, and that's why we exist. And people are like, "I didn't know this was a thing." And I'm so sad for the financial advisory world. I'm so sad that they don't have this. As advisors, they need this to grow their practices, and not necessarily grow them in regards to new business and new money, but more of just hitting goals, whether it's spending more time with family or whatever it is, just to become more efficient. But you're right. Most people have never heard of this and that's what makes me sad, but that's why we're here. That's why I want to put the message out to the world that it's doable and you can do it.

Michael: It's one of those, I guess the old saying in the business world, "If you're not measuring it, you can't manage it." So, if you're not gathering some kind of data around how your marketing sales process is working, you can't possibly make improvements or even just figure out what to stop doing that's not working, because you don't really have good perspective. And for multi-advisor firms, the moment you have multiple advisors, you really don't necessarily know what's happening because you're not there firsthand. But I find even for advisors that try to keep track of this mentally in their heads, try to be self-aware around it, I'm actually often very fascinated by what advisors think is going on and then what they find out when they actually sit down and look at some of the data. And you just realize your brain overweighs the big client successes and the big losses that are heartbreaking, and you lose most of the data in the middle that's actually the averaging of the volume. And so, I find a lot of advisors just misjudge their own numbers, because we get so fixated on that 1 client that we thought we were going to get that we don't get that we fail to realize, actually you have a really high close rate. You're just really bothered about that one. Or you got a couple of big clients. You're feeling really good. And then, you look back at the numbers, like, wow, you're barely closing 20% of the people you're sitting across from. It's great that you got some big clients. You might have really big numbers if you could make some adjustments to your sales process because these numbers actually aren't going that well.

Erica: Right. And it also gives them a sense of peace when they go to these events with other advisors and everyone's throwing out numbers. People throw out numbers all the time like t-shirts at a basketball game. This is my ROI and this is my close rate. And if you really know yours and you know why it is that way, there's such a sense of peace rather than that comparison game of, "Why isn't mine 50%?" But when you really start looking at it, you know why. Or you just have data to back up of that's really interesting that they're 50. Maybe we can be curious about that and ask about it and see if we're just looking at this number a different way. And it opens conversations too for these advisors who are competitive.

Michael: Not that anybody in our industry is competitive about their numbers or anything. Hypothetically, if you're competitive...

Erica: Yeah. Just saying if they were.

The Top 5 Metrics Erica Focuses On To Improve Advisory Firm Marketing Funnels [15:04]

Michael: ...it might be cool to be able to compare numbers with others. So then, take us a little bit further into the metrics, the metrics that matter. What do you actually measure and report on and dashboard out? Because frankly, you mentioned so many steps there of did they set the appointment? Did they keep the appointment? Were they qualified? Did they come to the second appointment? Did they come to the third appointment? Did they become a client? How long did it take to do the process and move the dollars? There's so many things there, I can easily see someone getting into, drowning in data overwhelm in the other direction. So, I'm sure you find in practice just some numbers and metrics matter more than others or become more of a focal point than others. So, what are the metrics that matter that you tend to focus on in this process?

Erica: Yeah, I have a top 5, because there are, and our dashboards give them probably, I don't know, 40 that they can look at. But, the top 5 that are at least the biggest drivers of change or understanding of what's happening would be your stick rate, which the definition for me always, the data definitions really matter. So, stick rate is of the people who get on your calendar, how many actually keep that first appointment. So, first appointment stick rate.

Michael: Okay. I'm just envisioning in practice, that probably varies a lot by what your marketing channel is. When I get stuff from referrals, usually pretty darn high by the time they schedule something with me, it's going through. If I work with some of the third-party lead gen services, it can be really low because they're shopping a whole bunch of advisors at once. If I'm doing seminar marketing, at least going back to my roots, doing seminar marketing in my early days, it's kind of in the middle. You ain't getting every appointment that gets set at the end of a dinner seminar, but you should get a certain percentage of them. And if more than half are peeling off your calendar, you got a problem in your follow-up process or your appointment setting process or something else. So, I get it. I feel like that's one that, for advisors where almost everything is inbound and referral based, they're probably not used to measuring that, because the stick rate's really, really high when it comes to a referral. But when you're doing more just proactive route by marketing in general, it is actually a normal thing that not every prospect follows through even to the first meeting. That becomes part of your process, and then a chance for process improvement of, hey, you're having a really high fall-off. Ever try doing a reminder email…

Erica: Exactly.

Michael: …and see if they stick? There's things you can do for that stick rate once you understand you have a stick rate problem.

Erica: Exactly.

Michael: So, what's the next one?

Erica: So, the benchmark there is 70%. And with benchmarking, there's a lot of ways we come up with it and I like to tell people, "It's a tool, not a rule." We don't tell you that you have to hit a 70%. There's a lot of reasons why you wouldn't. But, people do want a framework to work with and sometimes...

Michael: Yeah. The very next question that always comes after you give me a score is did I get a good score? Keep that a benchmark. I'm so glad you gave me a number to measure by now. Did I get a good number? Give me a benchmark.

Erica: And for referrals, it's going to be higher, in digital leads, it's going to be lower, in seminars, it's going to be right in the middle. So, you hit it spot on. Then next is going to be close rate. So, of the people who keep a first, what percentage close? And benchmark there is a 30[%] and everyone wants it to be 50, and everyone says it's 50 and I'm telling you, I look at a lot of data and it's not 50. So I like to tell people that, and again, that's that whole giving you permission or proof of feeling okay that if you're not hitting 50, that's okay. Maybe you do with referrals. Referrals are higher. Seminars tend to be a little bit lower.

Michael: Yeah, I'm thinking back to my old days of doing seminars and I'm fascinated because how well the numbers match. The thing we always talked about was 10-5-3-1. 10 people in the room, 5 of them set an appointment, 3 of them keep the appointment, which means you're keeping about 60%, 70% stick rate. 1 of the 3 who sets the meeting ends out actually becoming a client. Then, 1in 3 is 30%, so I'd always heard 10-5-3-1. Sometimes you just got 10-3-1. 10 butts in seats, 3 people who show up for an appointment, 1 of them who becomes a client. In the seminar marketing world, it's the exact numbers you're talking about.

Erica: And that's funny because our conversion benchmark's a 50%, which follows exactly what you just said, so the 10-5. And this is based off of tons of aggregate studies. But anyway...

Michael: But I do think it's an important thing that you highlight around even something like close rate. Again, a lot of advisors I find, the close rate's higher. It's like, "Well, I close half the people I'm in front of." And then we sit down, get some numbers and it kind of seems like it's lower. And it's like, "Well, yeah, but this one didn't count because they had a weird circumstance." No, that counts. That's part of the point.

Erica: Exactly.

Michael: This client wasn't a good fit because they had a weird circumstance. That's known as not a qualified prospect. You probably should have had a way to not meet with them in the first place. That's actually a signal of a problem in your process. For some advisors I find, their problem is not that they have a bad close rate because they're not good at selling. Their problem is they sit in front of a lot of people who are not a good fit. And so, there's no reasonable chance to close them and you might not even have wanted to close them in the first place. But if you keep true to the metrics and you find out, "Oh, I'm only closing 1 in 10 I sit in front of because half of them are a bad fit in the first place," well, cool. That means you're actually closing 1 in 5 who are a good fit, which is a little bit better of a close rate. But that means you need to fix your appointment process or your meeting process to screen out 5 bad prospects that you're seeing on an ongoing basis...

Erica: Exactly.

Michael: ...which you don't get to until you measure the data in a consistent way so you can go back and see, "Oh, I have a bad close rate. And it's not because I'm a bad closer. It's because I'm not sitting in front of the right people. I probably need to fix that."

Erica: Well, and that...so story time. We had an advisor and they had multiple advisors on their team. I'm doing a coaching call and we're looking and they're like, "Hey, this one guy just can't close. We're really struggling. I think we're going to give him the boot." And I'm like, "Let's look at the data before we make that call." And we looked at it and he did have a really low close rate, but it wasn't his close. He was actually, when we measured the close, which was at the second appointment for them, he was the strongest closer of the whole team. He was such an intense guy that he was losing everybody after first and he wasn't converting them to a second appointment. So, strongest closer of the team. It's simply just he wasn't building trust and he needed to ease up a little bit, and he needed a little bit of training for him to just build a relationship in the first meeting instead of being so gung-ho. And that speaks to your point, right? He was actually the strongest closer, but his close rate was low because of a problem way earlier on in the sales cycle.

Michael: Oh, interesting. So, 2-meeting process...for anybody that got to the second meeting where you're supposed to close them, he was the best at getting them closed. The problem is just he was so intense, not a lot of people wanted to go to the second meeting. So, if you measure the whole funnel, how many leads do we send him? How many did he get? The number was bad. But, it's not because he doesn't get the closed one when it's time to actually win the business. It's because he was so intense, he was freaking them out before they got to...

Erica: Exactly.

Michael: ...that part of the process.

Erica: Exactly. And that speaks to your point. We have to back up and really look at the whole thing to tell us more information.

Michael: So, we have stick rate, close rate. So, what's the third big metric?

Erica: Average case size. That is so telling of a lot of things and they all link. So, average case size, if you got people who are writing a million [dollars] and above, their close rate's going to be a little bit lower because it just takes a long time, depending on how often we're looking at data, just from a time standpoint. But average case size is really telling. And then, we're going to have higher closer rates for people who are more transactional at that $100,000, $200,000 mark. So that's really important. It also tells you what advisors are good with working with certain subgroups of people. And looking at it by source. So do seminars drive a certain demographic, a certain net worth? Are our referrals dragging our average case size down when we thought it would bring it up. Looking at it by source is really important too for average case size.

Michael: And so, average case size in this context, just the average size of the check that I'm getting, like the average size of the advisory account if I'm the advisor and the...I'm thinking back to my early days of insurance of average case size was average target premium on a variable universal life policy. It's that kind of metric, the average size of the client that you're getting?

Erica: Yes. So, managed money and annuity put together.

Michael: And I'm just curious. Do you measure that in, I don't know that it matters, do you measure that in assets? Do you measure that in just pure revenue?

Erica: Yeah, good question. We have the team track it as assets and then on the backend, we're doing the revenue for the advisor. People get funny with money, so we try not to include too much revenue for the support team to see that.

Michael: Interesting. So, that just helps you, again, get really clear, because this is another one, I talk to a lot of advisors. My average client's over a million [dollars]. It's like, "Well, tell me about your practice." I have 200 clients and $140 million under management. I'm doing the math and the average is 700 [thousand dollars]. You're telling me your average clients sell for a million, but the math does not hold up. And granted, sometimes that's because my average new client really is over a million, but I've got some smaller ones from the early days in the business where it was smaller. But again, to me, this is one where we can fool ourselves sometimes, because I really remember the few big clients that I got, and I don't then add up how many smaller clients and concessions and accommodations and other folks that I take in that still take up seats on the bus and room in the practice, until you track all of it and then really sit down and look at the number and say, "Oh, my average new client is actually not quite as big as I thought it was. Maybe that's why I'm not growing as quickly as I thought I was, or maybe that's why I feel like I have no time because I'm adding a lot of clients that aren't actually a good fit."

Erica: Yep. And the other thing too is once you decide to go for higher average case size clients, you don't need as many leads. So you can use that mathematically as well for planning and not be freaked out and say, "Okay, we're going to spend less this year, but really get that avatar person," if you're looking for the higher net worth group. And you can use it to your advantage. So, there's just a lot you can do with knowing that number.

Michael: So, we've got stick rate, close rate, average case size, so what's the 4th?

Erica: Pending days.

Michael: Pending days.

Erica: Yes.

Michael: So, what is pending days?

Erica: So, book days is going to be days between appointments or the days it takes from something getting submitted to issues on the insurance side. So, days, basically.

Michael: And the idea here is basically days from when a client signs until money moves or revenue gets going? Is that the essence of it here?

Erica: That's one of them. The other ones are actually in the sales cycle. So, how many days between the day they reach out interested in an appointment until when you book the appointment, as in they call on a Monday. They want an appointment. If you can't get them in the calendar for 15 days, we got a problem.

Michael: Okay. So, how available is your calendar and how many days does it take to actually find a slot on your calendar. Because if it's too many, realistically you're going to start losing prospects who ironically might have been very excited to work with you before, but you lost them out of the gate. I would so love to work with you. Grab a time on my calendar in 3 weeks and we'll get going. It's like, "Yeah. I was kind of hoping to be through this in 3 weeks because I'm really terrified of getting a financial advisor and it's very stressful to me. And so, I was ready to do it today, not 3 weeks from now."

Erica: Yes. Exactly. And then, the rest of the sales cycle, so from the first appointment to the second appointment. And I think sometimes advisors feel great when their calendar is packed. And some of them have even been taught, which drives me nuts, to say, "My calendar’s really full. My first appointment isn't for 3 weeks." But that is such a disservice to these prospects who are excited and want to get in, and you've just built trust in a first meeting and they're ready. And for your scheduler to come back in and say, "Well, he's so full, we don't have something for a month," you lose so much momentum. You know?

Michael: Yeah. I feel like there's a thing that some of us get of, I'm supposed to be hard to get. It's an exclusivity thing. I guess I will deign to consider taking your money 3 weeks from now. And to be fair, I do know a handful of advisors that have built their practices and their brand to a certain level, I think they can legitimately get away from that. They can actually successfully play up, I really am that exclusive, and you're going to have to try to be my client. Most of us, I don't think, can actually get away with that though. If we try, they're just going to go to someone who's easier to schedule.

Erica: Yeah. And again, back to that average case size, the higher net worth people will wait. We have a guy who does an average case size of a million or above, and his average days between appointments is like, 25 days, which our benchmark, talking about benchmarks, for days between appointments is 10 to 15 days. And his is 25. It's way past what we recommend. But they're fine with it. And again, we've got the data, so we know that it's not affecting his prospect story and what they're doing. That doesn't necessarily work out for everybody, like you said.

Michael: So, it sounds like there are...do you end up with a slew of pending days measures? Because in theory, you can measure days literally between every single step of the process. Is there some rollup of these of the primary ones to look at or is the point really you want to look at every single step and layer?

Erica: No. Really what we do look at for the days is just between first and second, that's the biggest one, and then from when the app is submitted on the insurance side and getting issued. And that should be 30. So, those would be kind of the top 2 days. We do look at all of them because I'm a data person. But if you're going to try this scene out on your own and really start looking at those things, just look at between the first and the second, should be 10 to 15 days, and then between the app, sign date should be within 30.

Michael: Okay. I know our audience skews a little bit more towards planning fees and investment accounts But, I guess your equivalent is from close to money moves, money in account.

Erica: Mm-hmm.

Michael: How long does it take to get there. Or if you're planning only, days from when they say they want to be a client until you've actually delivered the plan and you're wrapping your process.

Erica: Mm-hmm. That's good. And again, once they get that number, let's say they have 2 or 3 that end up being a shorter timeframe, you can be curious about that and you can say, "Well, why were those shorter?" Once we start looking at the data and we have it, it's so cool because you can improve yourself. You don't need someone to tell you that. You can see it.

Michael: And then, what's the last measure that you like to look at as drivers for change?

Erica: So, the last measure is cost per client or cost per lead. I prefer cost per client.

Michael: Okay. So, that's essentially my acquisition cost. Rolling all of my marketing costs in. How much did I actually spend to get this client?

Erica: Yeah. And benchmark, again, they're a tool, not a rule. But really, what we say there should be over everything should be about $4,500 per client. It's going to be a lot less for digital. Barely anything for referrals. But you get into TV, radio, all of that, those were means and they're pretty high. We're talking $8 grand cost per client is not abnormal.

Michael: And just curious. Do you just measure that looking at the hard dollar spend of their marketing strategy, the seminar mailer and the dinner and such? Or are you trying to count some cost of their time and staff time and the time side of it?

Erica: That's such a good question. You actually came out with a report on this that I was looking at when we were looking at ROI. It was some ROI report that you had. It was talking about that. It talks about their time. So, we do not include their time on that. We're just looking at hard costs. But I did love reading through that. For you, by the way.

Michael: We've looked at it and measured in both ways as well. Because again, I find it varies a little bit by, frankly, the advisors and the channel, because there are strategies that are really time intensive. Biggest, classic is COI referrals, all the networking meetings and the lunches and the social, the things that we do to build up where I see advisors come out and it's like, "Yeah, we're having great growth and I spent 1% on marketing. It's almost nothing." Cool. Tell me about your marketing process. And they start going into all the COI activities they do. And it's like, "Yeah, my budget's a couple hundred dollars a month to take these people out to lunch and do my stuff. It's a really low-cost strategy." How do you value your time? Because I'm adding up all the things you're describing. You're spending hours and hours every week with all these different networking meetings and things that you're going to, which means over the span of the year, you might be spending 200, 300, 400 hours on this. And I know what you bill. So, that's like $100,000 of marketing expenses. You're just doing with your time and pretending your time is worthless, even though it's not.

But then, on the other end, I see the advisors that have much more spending oriented, I'm paying to make things show up and the extreme, people that just literally pay for third-party lead gen. And the leads just show up and you just respond to them, where their time is really minimal. The dollar expense is a lot higher, but it's just because they're trading their time for dollars. And it averages out remarkably similarly, because when we measure that in the studies that we look at, we get these acquisition costs of, at the low end, $2,000 or $3,000 per client. And just by the time you get to an experienced advisor who either has more valuable time or is spending more money on marketing to make up for their time, I think the last version of the study that we did, the average client acquisition cost for an established advisor was $4,000 to $5,000. Exact same number that you're at. Which is powerful when you get to what's your average case size, what's your average client size. That's great math with million dollar clients. It's pretty good math with half million dollar clients and this is why most of us end up creating minimums with $200,000, $250,000 at some point, because any lower than that, it takes more than 2 years on an advisory account to generate enough revenue to just make back the marketing costs, never mind the actual cost to service and all the work we do in the first year.

Erica: Mm-hmm. And for the most part, and I think most advisors will speak to this, again, I'm not an advisor so I don't know, but I see it in the data, those non-qualified leads or the ones that you let slip by because you liked them and they weren't really qualified or they were the referral that came in from your A client, they're the most work. And it's interesting just to see that it doesn't pan out from a longevity standpoint with those leads and knowing that all goes back to the close rate, the qualified and all of that. So, it all kind of does this dance.

Michael: Interesting. And so, stick rate, when you're setting meetings, do they actually show up, just a good basic level of client quality. Close rate. if they actually came to a meeting, do they close? Average client size. So, assets or revenue fees, however you measure it. How much revenue do you generate from each client that you work with? Pending days. How much time does it take to get through each step of your marketing and sale process? And then, cost per client. When you add up all the marketing costs you had and divide it by how many clients you actually got, what does that come out to? And I guess, obviously then you can go back and refer back really quickly. If your average cost per client is higher than your average revenue per client, this is probably not going to work well. You want revenue to be higher than cost. Read it in a business book somewhere. To be fair, when we run recurring revenue models, you do get some room of, I can have a client that doesn't generate all the revenue back in the first year. But if my average client stays 10, 20 plus years because I've got a higher retention rate, a recurring revenue model, you can make it back in the long run, sometimes very profitably, for the recurring revenue models. But if your cost to get a client adds up to more than your revenue for each client, you probably have a growth problem.

Erica: Yes.

How Track That Advisor Tracks That Advisor Data [38:48]

Michael: So then, how does all this actually get tracked? How do you generate all this data to be able to track all this stuff? Where does it come from? Where does the data all come from?

Erica: These are from my...I had a client that was on with you and he called up Excel sheets and he's like, "Erica is going to be so mad that I called them Excel sheets," but they are. They come from my incredibly smart team has helped me bring us into the 21st century, because my old sheets were real ugly. But they made them a little bit prettier now and it's Google Sheet-based. And there's reasons for that. It's not because I'm lazy or cheap. We can go into those reasons later. But they really are just a very simple system. These advisory support staff don't want a complex, really hard software platform, whatever it is, to relearn because they've already had to do that multiple times. So, it's a very simple sheet and we are doing a ton of work on the backend. So, all they do is take a line, you fill out the lead's name and you track them through the process. What's their name? What's their marketing funnel? What is the date of the appointment? Did they keep it? Did they set another one? And then, did they become a client? It's that simple.

Michael: So, I'm just trying to literally envision spreadsheet form. A whole bunch of rows. Each row is one client or one lead, hopefully becomes a client. Each row is one lead. And then, just a whole bunch of columns of were they qualified? When was the first meeting? When was the second meeting? Did they become a client? How much did they bring over? All these different data points on one big old row. And then, you can calculate all the metrics on the backend about all the key ratios that you were talking about.

Erica: Yeah. And we keep marketing and new business separate. So, in bigger offices, you've got someone doing the marketing and they're helping set appointments and chase the lead. Once they become a client, it's off their plate and they don't care. And so, they pass the baton. Then we have a separate tracker for new business. And that is where it is stored and where it is tracked. And then, we are auditing the data and we're scrubbing it. And that's truthfully the key piece that most people miss. Most people are trying to track it or they have these Excel sheets or they've got 700 Excel sheets, but there's no third eye on it to make sure it's right, or that it's getting done, or it's Debbie over in the corner and she's the only one that knows how to do it.

Michael: So, help me understand more of just what you're doing that? What does it mean of, we're scrubbing the cleaning the data?

Erica: The Wizard on our team. His name is Christopher. His title is “The Wizard.” He's awesome. And he was able to kind of automate...we used to do this by hand, and we used to do it one-on-one, literally go into every client's sheets and look and make sure they're filling out each place. And I said, "There's got to be a better way. We have to automate this." So, it's automated and there's these scrub tabs that say, "Look, this isn't filled out." The sheets are smart. We have a product called the Tracker Genie in there. It turns green if you didn't fill it out. So, an example would be Sally Smith, she set an appointment for February 16th. We log into the sheet and today is February 17th and you didn't tell our sheet if she kept the appointment or not. So, that cell is now green, and your auditing sheets now have her name populated that says, "Hey, something's not right. This didn't get filled out and therefore, your stick rate is off." And it tells them exactly who it is, what line it is and how to fix it.

Michael: Okay. So then, I guess in that vein, this is still...it is a manual process of just track each data point of the step. Someone's still got to mark each, he did the meeting on this date. Okay, we did the meeting on this date. Okay, they said yes. Okay, here's how much they brought over. That still all has to get manually punched in one lead at a time, one stage at a time?

Erica: For 75% of our clients, yes. And this is where it's sad to me, because those same 75%, nearly all of them have a CRM. They have Redtail...

Michael: Kind of what I was wondering.

Erica: ...they have Wealthbox. They have Sales...they have these incredibly huge, robust systems and they cannot extrapolate data. They can't get it out. They don't know where it lives. There's no process. It's not getting put in right. So we tell people, we have integrations for all of them. And we're smart enough, we've done this long enough that we can absolutely automatically pull data out of your system. But is it right? And all of those people say no. And that's what breaks my heart is they're doing all this work and they're putting all this stuff in, and they don't know how to pull it out and they know it's not accurate in there. And so, it's not even worth pulling it out. And so, they are willing to do the work a second time to get it correct.

Michael: So basically…So, you could automate all this in CRM or extracting it from CRM, if only the advisors just entered the data properly and consistently in their CRM. But advisors are not only not entering it well in the CRM, they would actually rather do it in your sheet than the CRM, which I guess essentially says, "Hey, good news. At least your sheets are a lot easier to maintain than all the clicks you have to do to do this in the CRMs." I guess they’re just concluding, if I'm going to track this, it's easier to actually reenter the leads in your spreadsheet than it is to figure out how to use my CRM properly.

Erica: Right.

Michael: Sort of sad statement on CRM, but I feel like that's what I'm hearing here.

Erica: I know and it's terrible. And we have all these integrations. We do. We integrate with all of them. We have, like I said, 25% of our clients have it together and organized enough to pull the data out so that we can scrub it and then I can do coaching on it. But again, that's the sad fact in our industry and sometimes hopefully, it's freeing for any advisor who's listening to where they feel like everyone else has it figured out, kind of like that iceberg thing that we've talked about in the past or that you talk about often, is they think that everyone has it together and everyone's Salesforce system works. And it doesn't. It doesn't. I work with 100 advisor practices and only, maybe even less, maybe 10 to 15 of them are pulling it out. So, there's your freedom song, people.

Michael: So, I guess worth noting on the other end, as I think I had heard you say, the other reason you keep it in a spreadsheet in the first place is support staff don't want a big old complex system, because as noted, it's not getting entered into CRMs that may be a little too complex on this. But what that means on the flip side is, it's not necessarily the advisor punching in every data point. It may be a staff team member. It may be an administrative system or client service manager or CSA kind of role. It's not necessarily the advisor taking the time to do this.

Erica: Right. And we actually advise against it because they get restless, and they get impatient, and they think certain things are going on with leads when they're not. And we want the service team to take ownership of their role within the office and let them do their job. And so, for a lot of offices, we actually don't even give editing permissions to the advisor. They only get view access.

Michael: Interesting. Because…I guess help me understand…because if the advisors have access, they start tinkering and messing with it, or just because you're...

Erica: Yes, sir.

Michael: ...trying to push it to support teams so they've got ownership of, hey, the box is green because you haven't entered the data point, is the nice way to nudge them to say, "Hey, why is the pending day so high? Have you reached out to schedule the follow-up meeting?"

Erica: It's both. Yes.

Michael: I'm just really curious. What do the advisors do to break it?

Erica: They don't break it. They get in there and they'll see the lead and be like, "Oh, no, I closed them. I closed them." So, then, they'll change it to yes, but they don't realize that the baton shifting between marketing and new business is marketing doesn't put yes until the app has been submitted, or whatever understanding they have as a workflow. But the advisor gets in and messes the workflow...

Michael: If I'm in a mid to large-size firm that has specific workflow definitions about where clients are in a process, if you go and change the status of a client in the process when they didn't actually trigger that part of the workflow, you screw up the company's workflow. Spreadsheet's fine.

Erica: Exactly.

Michael: You screw up the company's workflow because your spreadsheet says they're in a different stage than they're actually in.

Erica: Yep.

Michael: Okay. So, if I'm a solo, I'm probably okay. But if I'm in a bigger firm and there are a lot of hands touching the sheet, please don't break company workflow.

Erica: Exactly. Yep. We're trying to have them stay in their own lane. Yeah.

Michael: So, you mentioned earlier, but now I am curious coming back. So why Google Sheets?

Erica: Yes. Okay. So, man, I have done this a really long time. I've been in this industry 15 years, so a long time. And it started with Excel sheets. And then, I started Track The Advisor and it was still in Excel sheets and that was crazy. And then, we went to Google Sheets, which I liked. Then I spent a ton of money to build a platform and I didn't like it. And it was because these offices need some sort of customization. We can standardize a certain amount of it, but we have to be able to customize a lot of it, because it's this moving, fluid...data analytics isn't static. It doesn't just stay the same. And I use this analogy a lot, stars versus constellations. But there's 10,000 data points we could look at for offices and certain ones matter at different times. And so, I built this database and it wasn't super fluid and we couldn't really change a lot, so I veered away from that. And now, we're back to Sheets. We have some pretty exciting things happening in 2023 for our clients. I don't want to spill the beans on them. But we're moving in a bit of a different direction this year, but we haven't really made that public. So, Sheets are the easiest. They are within Google...

Michael: Because it's a spreadsheet. At the end of the day, you want to rejigger it and calculate some new things and move a row or 2 around, it's a spreadsheet. The glory of Excel or Google Sheets spreadsheets, they are wonderfully valuable.

Erica: They are.

Michael: Spoken like a data nerd probably, but they're wonderfully valuable, spreadsheets are my happy place.

Erica: And people love them because they don't realize really what they can do until you get experts like my team that is on them and can do anything on them. And they look like a database. They look like an app.

What Track That Advisor Charges For Engagements [50:43]

Michael: So then, how do you ultimately work with advisors? What does it cost to get up and running and do this?

Erica: So, it's a subscription-based model and one, the advisor has to want to track and convince their team that they want to do this, and then we charge an onboarding fee. It's $1,500 for an onboard. So, what that is doing is we're creating all the trackers. We're creating all the sheets for you. We work with your team. Our CEO, Molly, is incredible and she gets it all built and ready to go, does a several hour onboard via Zoom, teaches the team how to do it, fills it in. And then, it's monthly. So, it's $600 a month and it's just a subscription-based model. They do sign an annual contract, but we found, after doing this a long time, sometimes it's just not a fit. And I don't want to be locked in for a year with somebody whose team isn't putting the data in and we're doing all this work. Or an advisor comes to us and says, "This isn't what I thought it was," or "My team doesn't have a capacity." So, we have a 90-day free look. So, after 90 days, we're all going to know if this is going to work or not. And so, that has been really helpful for everybody to make sure that it's a win. And we want it to be a win. Our whole job is to be a resource. We don't want to be a weight on people's shoulders.

Michael: So, I'm thinking practically, $600 a month is not a trivial expense for firms, even relative to what we spend for some of our other tech in our tech stack. As I think about and interpret that, just I got to be putting a pretty good amount of dollars towards marketing to be able to say, "If I spend $600 a month, I can make this more efficient and get back $7,200 a year of ROI, because my marketing's going to run better if I can just fix these problems in my marketing funnel that I will now be able to see because I'm tracking all of it, and I have my stick rate and my close rate and my client acquisition costs and all the rest." Is that a pricing per advisor, per firm? If I'm a firm with multiple advisors, do I have to pay multiple licenses to have multiple advisors? How does it work at that level?

Erica: Yeah, we get that question a lot. And no, it's just one simple...I believe in simplicity. I don't want to overcomplicate things. So, it is just one price point. We do have kind of a...

Michael: Which means that covers me for the firm?

Erica: Yes.

Michael: So, I might have 1 advisor or I have 5 advisors, I have 10 advisors. It's the same, just I pay my onboarding fee and it's $600 a month?

Erica: Yep. We've got offices who are doing [$]10 million and then we've got one last year that's close to [$]400 million for the year of new business. And they pay the same fee. Yeah.

Michael: Okay. So, I guess, practically speaking, if I'm a solo, this may feel a little bit expensive to me unless I'm doing a lot of marketing. If I'm a big firm with 5, 10, 20 plus advisors, this amortizes out really quickly.

Erica: Right. This is a no-brainer.

Michael: Spread across a couple of heads, that math gets really small per advisor. If any one advisor does anything slightly better, this math is going to be really easy for ROI for the firm.

Erica: Mm-hmm. Yep.

Michael: And so, is that what you find in practice? Is it more common this gets adopted with multi-advisor firms and platforms?

Erica: Yeah. And we started a company last year, sister company, myself and Molly, our CEO, called Track That Seminar. And that is for the smaller offices who are just moving from the referral existing client into dabbling into seminars, because that's typically the first step, once we start spending on marketing. And it only tracks seminars, which is great and it's a fantastic solution for them. And we knew we needed one, because we'd have these offices that are sole producer and they look at me like deer in the headlights saying, "There's no way I'm spending that." And so, Track That Seminar only tracks seminars. It's awesome though because that's really where we start seeing that you can't keep the leads in your head. And that's $250 a month. So, it's less than half the cost.

Michael: Okay. So, if that's what you're doing and you want to start tracking and measuring there, because as you know, it's a good place to measure ROI, I find, is...thinking back to my days starting on the seminar marketing end. It's a very repeatable process with very, very concrete steps of where people are through the stage. So, if you track the numbers consistently and you do the process repeatably, it's very conducive to process improvement. Our stick rate's low. We put another reminder putting in place. Our close rate's good, but our non-qualified rate's too high. Okay. Well, let's adjust the mailer a little bit to try to put different butts in seats that are a better fit. I get it. That's a really marketing funnel that's really conducive to let's get some really good concrete consistent numbers in here and we'll find really quickly what levers to move to make the process work better.

Erica: Yep. It's very machine-like, totally.

How Erica Started A Career In The Financial Services Industry [56:04]

Michael: Okay. So then, what is your journey that you come to the world of making Track That Advisor, making spreadsheets to measure marketing data?

Erica: Yeah, it's a crazy one. I'm not the entrepreneur spirit at all and it's funny that I'm in the role that I am in. So, I'm an English major from school and I studied rhetoric and composition. So, persuasion...

Michael: Fantastic.

Erica: ...with story. I know. It's crazy how it all tied together here in the end. But it was just...

Michael: My liberal arts degree is just smiling.

Erica: Oh, look at us. Man. Yes, I know.

Michael: Fantastic.

Erica: English turned data nerd. But it's worked out so well because I can communicate about the data. So, I went to college, studied English, and worked for an advisor, did the marketing for them. And they were wanting...

Michael: So, you landed in an advisory firm like straight out of English major college?

Erica: I dabbled at a publication for a while and realized really quickly that I did not want to be in that. And I sat there saying, "Oh, my gosh. I just went to college, and I don't think this is what I want to do."

Michael: Well, now we're really into the liberal arts education.

Erica: Yes. Yes. So that was pretty scary. And someone had told me, "Hey, I know this advisor. They're looking for a marketing person. You do English. Maybe that'll be a fit." And I said, "Let me try it. I'll write copy all day."

Michael: I was going to say, they need marketing words and you're good at words, so clearly this is a fit.

Erica: And then, I entered into the financial world, and I said, "Wow, I am not writing copy. There is so much other stuff that's happening." And it was great, and I did love it. And the advisors had gone to an event and wanted to maybe take some of the marketing a different direction and I didn't think it was a good idea and I had zero data to back it up. And it was this lightbulb moment for me saying...and they didn't make me feel that way. It was more of me saying, "I don't know how to prove this to them." They're the owners and they're asking me, "Should we do this? Should we not?" You're a marketing person. And I had zero response and I felt like I was failing. But I was also doing their company books and I said, "I know I've got all the pieces to figure this out and give them an answer." And so, behind closed doors, I started tracking everything. I was like the mad scientist in my office. And lo and behold, sat down, 6 months later showed them what was going on. And at that time, I didn't understand the data storytelling or the analytics. I just was able to present it to them and show them visually what was happening from an ROI standpoint. And that felt really good, and I loved it. And they loved it, and no one was doing this in the industry. And so, I did it for quite a while. And my husband and I moved out of state, and I was devastated. I thought I would be at their practice my entire life and did not foresee this coming.

Michael: So, you were still doing this and just building it up in their advisory firm?

Erica: Yes.

Michael: How long were you doing it and what was the nature of their advisory firm?

Erica: They were insurance only when I started with them, and then they moved into the managed money towards the end of my time there. And so, I was there 5 years maybe. Yeah. I was there probably 5 years, maybe 6. And we would meet. So, I started doing this maybe my second year with them. So, I did it for 4 or 5 years just for them. And we'd meet every 6 months, and I would put...this is so embarrassing. But I would print out on 20 Excel sheets and tape them all together and put it on their boardroom table. And you know advisors, right? They looked at it and they were like, "What are you presenting to us? This is so ugly."

 

 

 

And then, I moved and I was so sad.

Michael: So, moving was just life, family circumstances, spouse job change, that kind of thing?

Erica: Yup. Yup. My husband…I was pregnant with our son and my husband's company closed and it was a big surprise. And so, he ended up finding a job in a different state. And so, we moved, and I obviously wanted to honor him in that and support him in that. And I was pregnant, so I didn't know what I was going to be doing with work. And so, it was just weird. We kind of just closed that chapter. We moved out to Arizona, and I had our son.

Michael: Where were you previously?

Erica: I was in Colorado. I was in northern Colorado in the Loveland area. Born and raised in Fort Collins, and then moved out to Gilbert, Arizona. And we were here, had my son, wasn't working, didn't really know what I would be doing. And they called me. I was probably, I don't know, 6 to 8 weeks maybe after I had my son and they said, "Look, no one does the tracking. This is not a thing. We don't know how to do it. The new person doesn't get it. Can you just do that aspect for us?"

Michael: So, this was the old firm calling you back.

Erica: Mm-hmm.

Michael: How long had it been at that point that you're gone?

Erica: 3 months maybe. Not long.

Michael: So, just long enough to…you left, they got a new person in. The new person's doing it and doesn't get it.

Erica: Yes. And they don't get it. It's the blind leading the blind. They were trying to help them, but they knew kind of what they needed. And lightbulb went on and I said, "Man, I should start something. I should start a company." And it was like an eyeroll. Again, it's not my dream to own something and I'm very introverted. I'm not salesy and I'm just sitting here like, "Ugh." But it's a solution and it's a problem solver.

Michael: So, I'm struck though. It's not like they came back and asked you to help it and you just said, "Hey, okay. I'll work with you on a consulting basis to help you with this from afar, from Arizona." It was they want some help with this and your first thought was, "If I'm going to make it for you, I'm going to make it for a bunch of people and sell it to everyone."

Erica: I guess.

Michael: Is that how this played out?

Erica: I guess. I think you're calling me out on it. It is. I don't know why my brain went there, but it did, and it just was like...

Michael: You might be underselling your entrepreneurness...

Erica: I know. That's what everyone says.

Michael: ...a little bit there. You're like, "Well, if I'm going to build it, I'm going to sell it to more people than just you." That's great.

Erica: I'm going to sell it to everybody. But I think it comes from the heart of wanting to help and I saw how lost they were without it just 3 months. And it was, again, such a reminder of there's got to be a ton of people who are floating around blind, and I hate that. I hate that for them. So, yes. So then, Track That Advisor was formed. They became my first clients, which is super cool. And we've had such a great relationship from there on and they've really helped birth a lot of this too. But it's been referral only. I didn't want to come out swinging. Again, I just had a kid. I just had my first kid. We moved across the country.

Michael: When was this? Just what year are we in at this point?

Erica: This was '14, '15. So, I started the idea, started noodling on it, put a ton of thought into it for an entire year before I really did anything. And then, in '15, it actually was launched and became an actual company. And I knew I didn't want to grow fast, primarily because I was just terrified of being a business owner. And the advisory...

Michael: I was going to say, what was the fear of fast? So, what was terrifying about being a business owner?

Erica: Truthfully, probably my clientele. They're advisors and they don't hold back their opinion. And they will poke the bear of data. And my personality type is a yes person and the people pleaser. And so, there was a lot I personally just had to overcome saying, "When I come at it with data, it's very black and white and I have to be able to have some hard conversations and do that with grace." But data can be hard, and you have to tell people things they don't want to hear sometimes. So, I had to wrestle with that.

Michael: You just felt like you needed to build your own courage or confidence of, "I'm going to do this a few times with a few people and if it goes well, then maybe I'll do it with a few more?"

Erica: Yes. Yes. Yeah. And I didn't want...yeah. I'm just kind of a slow and steady type of person and it fit. And we were growing our family too, and family is really important to me, and I didn't want to get lost in that. So, it's been referral-based and relatively slow growth all the way until 2021. And that was when we decided Molly...Molly's our CEO and she's guns a-blazin', man. She's like the front stage person. I'm a backstage data English major and Molly really helped change the game with that and she was like, "Erica, we need to be known. This is such an incredible asset for these advisors." And she was very much the one who really spoke into me and just said, "We've got to just go for it." So, 2021 is really when we started putting ourselves out there.

Michael: So, how big is the team at this point?

Erica: There are 5 of us, a couple of other contractors that do other stuff, but 5 on staff. And I keep it very small and very automated and very efficient. I don't want a huge staff. And so, my team is all A+ players. People know if you come to work here, it's going to be excellence and we require A+. I don't require perfection, but I do require excellence. So, Molly, Christopher, Colton and Jennifer are A players.

Michael: So, I am intrigued that just you said Molly is your CEO. So, for a lot of founders, we name ourselves as the CEO. We make the firm as founders. So, tell me about how that role came about.

Erica: Yeah. She was the first hire of the company, and I also am a believer, anyone that we hire starts at the same place. So, I had always done the data scrubbing and the building of the sheets and all of that, so when I hired her, I'm like, "That's what you're doing first." So, anyone that comes in our team, that's actually where you begin. And mainly because I want them to feel the pain of it, and later when they're making requests to people, they've been in their shoes. But anyway, that's kind of a sidebar. But yeah, we started growing a lot more and I really realized that my gifts and my strengths are in the data and the teaching and the coaching side and not front and center stage. So, I'm still the face of the company and I'm still the founder and I'm still the owner, but she's a mover and she's a shaker. And she has these big dreams and I tend to be a little bit scared of change and scared of the what-ifs. And she just kept pushing me and I'm like, "You know what? You really are that role." We're very much a yin and yang. And she's the one who just kind of keeps the fire going and is like, "What about this and let's try this and can we do this?" And I'm always like, "Okay. Let's try it. I don't know." So that's how her role became and she brought this energy that I don't...I bring a different energy. I need time and I need space and I need quiet. And so, she very much filled the shoes of all the other stuff that is required for us to keep this train moving.

Michael: And so, what was that like just naming someone else the CEO of the baby you made, the other baby because you have babies at home too.

Erica: I know, right? Honestly, it was really freeing. I was under such a weight and I didn't like it. Like I say, I don't love the entrepreneur...parts of it I do. Parts of it I do and I'm learning to love them, but I had to realize exactly how I'm created and what I love to do. And what I love to do is not the CEO stuff. So, for me, it was so freeing. She'd been with me long enough. I know her well enough. I trust her. And I'm also free to disagree, right? We have conversations. It's very much a partnership. But I also knew we would not get to the levels I actually do want to get to with me being in that chair. And we're doing it, so she's doing something right.

Michael: So, what's changed since she took on the role?

Erica: Our growth. We've just exploded in a great way. And I love the backstage part of operations and efficiency and automation. And so, I kind of see her out there with this megaphone of, "This is Track That Advisor. We are Track That Advisor." And I'm kind of sitting in the back, "Sweet, let's make this work from backstage." And the teaching and the coaching, she doesn't love looking at the data and she rolls her eyes at me. I'm like, "But what about this stat? And did you guys know this about our clients?" And she's like, "Cool, Erica. You go sit in your hole and do the stuff you're good at and what you like." And I love it. I'm free to do it.

Michael: We prefer data cave, not data hole.

Erica: Oh, I like data cave. Okay, I'll take it.

Michael: Data cave feels better. Hole feels bad. Cave is just like, it's a place that you retreat to for safety.

Erica: Yes. There you go. A cave. So, Molly lets me be in a cave. She's out and about in the world. And it was freeing, yeah, to answer your question. It felt really good, and I feel like I'm in my sweet spot and she's in hers. And she picks up other stuff a lot of times if we need it, and that's so telling of just her work ethic. But she is very much a leader and I appreciate that because I wanted to lead in a different way.

The Surprises And Low Points Erica Encountered On Her Journey [1:12:21]

Michael: So, what surprised you the most as you've built this business into serving the advisor community?

Erica: Probably how much I care about them and their success and them hitting their goals. It's kind of like the advisors who care about their clients. And I had actually heard one of your podcasts, I forgot who it was, but he was talking about how initially you do it to do it, but then you end up genuinely caring about these people. And that's the same. It's the same for me. I watch these advisors who are, most of them are very different personality than me, and I watch them get so excited about new goals. And then, we track it and it works. Or they pivot because something didn't work and they astonish me. The advisor breed is fascinating to watch and they're so inspirational and that surprised me. It has surprised me how much I look up to our clients. And I'm just so proud of them. One, they're doing it and they're having their teams track this data, which can be hard, and it can feel overwhelming. But then, they see the fruit of it and then they make these changes, and then they have new goals. And then, we're checking in on it and I'm this cheerleader and I didn't see those relationships coming. So yeah, that's been surprising for me.

Michael: So, what was the low point for you?

Erica: Oh, man. Of owning the whole company, this whole journey?

Michael: This whole advisor building, data tracking journey.

Erica: Yeah. There's been a lot of them. But I think the 2 that come to mind were 1, kind of where we had the idea for Molly to become the CEO was the weight, the weight of expectation and getting these advisors excellent reporting, how we were doing it, how we had the business structured. There was a point where...and I had an 8-week-old daughter at the time. And I just hit this point where I'm like, "I'm selling the company. I'm over it. I can't do this. I don't want it. Just take it." And I think a lot of entrepreneurs have been there. I just want to go be in a van down by the river. I don't want to do this. And a really good friend said, "What do you love about it? What do you love?" And I listed off the things I loved, and she said, "Then create that company and do that in the company." And I said, "You're totally right. I have the power to do that." And so, that's when this whole new awakening came for me. I do exactly what I love. I mean, there is stuff I don't like to do, but it's just part of it. But that was a low point was just the pressure I put on myself to be perfect for everybody and to give them exactly, all the things and to not let them down. And not that I felt like I was. It was just the constant pressure to do it and to keep performing at 100. So that was really, really hard.

And then, there have been other points throughout it where we feel you feel your capacity, like the balloon is just so, so, so tight and you're not sure it could hold that much air. But then it ebbs and flows, and our team is amazing and we all keep it in perspective. We all keep a good sense of humor. We all laugh. And when things are really busy and all of us feel like there's 500 things on our plate, every once in a while, we'll just be like, "Take tomorrow off." I understand that business is important and it's really stressful, but mental health and emotional health and wellness in your family, if that's broken, it's going to come into work. And so, when things get tight and when they get stressful, and they do inevitably, we're really, really good about creating space. I don't know if that answers the low point, but I think just any sort of when you feel like the balloon is about to pop is a hard spot to be in.

Michael: So, what was causing the balloon poppy feeling, just big growth spurt or big problem that hit or losing people? What got it out of whack?

Erica: Good question. It was kind of all the above. We had some big growth spurts. We were working on automations, but they weren't there yet. And so, there was still a lot of manual stuff going on. And we had...wow, I counted it out for them. I think we had 5 people, we had one long-term employee leave that was really hard, but we still have a great relationship with her. She just went somewhere else and kind of had some other stuff she had to do professionally that she felt called to. So, it was great, but it was so hard to have her leave. We hired someone, they didn't work out. We hired someone else for another position. They didn't work out. So training is hard when you hire staff. And they weren't A+. So here we are with a lot more clients in the middle of creating automations and all of us are trying to train new people and they're like C players and not playing. We had someone quiet quit on us and it was really, really hard. And we'd all show up to meetings just tired and just saying, "Okay. Just get done what you got to get done today. This will end. This will end." And it did and we're coming out of it. And you learn a lot and you grow a lot closer as a team too when you have people who are in it with you.

Michael: So, are there things you do differently now in the hiring training process to get better A player fits that get up to speed and don't quiet quit on you?

Erica: Yeah. I went in and created a ton of workflows and...my little internal brain created just a ton of workflows and processes that because our team in the past had worked together so long, it was kind of one of those, we all understand it, but it's not documented anywhere. And so, I did. I spent the last quarter of last year, it's all I did was just processes and honing in our CRM, and truthfully, swallowing some of the pills that I tell people to do. And it's always that, always a bridesmaid, never a bride, or I don't know what the saying. I'm blanking on the saying.

Michael: I always go with the cobbler's children have no shoes.

Erica: There you go. Much better. Yes. So that was my job. And that has helped a ton. And also, from the hiring process to not hire out of stress or fear. And being okay with getting rid of somebody if they're not a good fit. You know pretty quick in if it feels rocky and they're not good, to just say no and rip the Band-Aid off. And I know everyone wouldn't agree with me there, but from my experience, we can tell in the first 3 months if it's just not going to work. Just say no.

Michael: I find it similar. People can have varying degrees of bumpy first 30 days. They're just trying to get oriented and figure out how it flows. And some people pick things up a little bit faster than others. But by 2 months in, they should be starting to get the gist. And so, by 3 months in, either they're really getting it or clearly on the rise of getting it or they're not. And if they're really not getting it 3 months in, it really usually doesn't meaningfully correct itself later. It ends out being bumpy for a long time.

Erica: Mm-hmm. Yeah. I don't like having the hard conversations, so Molly has the hard conversations. So, she's helped. She's been one that's like, "How are they doing? Are we in or not?" And she has the hard...

Michael: It's a powerful thing when you have someone else on the team who can do the hard conversation if it needs to happen, since you can separate yourself of, I don't have to be the one that has to have the hard conversation. I just need to be the one who makes the right call for the business about whether this is the right person is really freeing if you're in the business owner position, you're not good at having those conversations. Just means you have to find someone who's good at those conversations, and then...

Erica: Right. And I'm fascinated that there are people that are. We're all unique and I'm so thankful that there are people that can, because I get really awkward and squirmy and it doesn't come out right. So, I'm so thankful for that too. Yeah.

The Advice Erica Would Give Her Former Self And Younger, Newer Advisors [1:22:04]

Michael: So, anything else that you know now that you wish you could go back and tell you from 5, 10 years ago as you were just starting into this advisor world and nerdy data journey?

Erica: I would go back and say, "Keep being curious and there really isn't a right way to do this." Because what I'm doing and what Track That Advisor is doing is so...we're on an island, man. No one is doing this in the industry. And I was so concerned about getting it right and getting it perfect. And I think I would have come to a lot of the realizations I did and really the bottom line is data and data storytelling and analytics, it's ever-changing anyway. It's not going to stay the same. And I wish I would have known that because I was so focused for a long time on just getting it perfect. It's not and these advisor practices keep changing and they keep getting bigger and they keep moving over to the managed money side and the teams grow. And then, the goals aren't to produce more business. It's to produce less and have more time home. There's all these things that just are ever-changing and I didn't quite capture that and I wasn't quite okay with that. But now I am. I think I've just...but some things just come with time, whether you tell somebody something a million times, you got to just wear their shoes for a while, I guess.

Michael: Mm-hmm. So, on the advisor end, what advice would you give younger, newer advisors coming into the industry today and wanting to get this right but not necessarily being ready to pay $600 a month for it. Where do they start if they're not quite at your level yet?

Erica: Honestly, just write down the leads that are coming in your office. Write their names down on an Excel sheet and put whatever notes you can on when did they set, did they keep it, are they coming back in and potentially their marketing funnel. I have a guy who heard me speak years ago and he's a sole practice. He's a smaller firm and we've talked several times. And he's like, "I still remember you teaching us to do that, and I have my Excel sheet and I write it down and I do all this stuff." And I love that for him. He's not at a point where it makes sense to spend the money and that's fine. But I wish for any advisor to just start somewhere, because they all feel like they don't know where to start or it's going to take too much time. And I promise you it doesn't. It takes 20 minutes a day, so start and don't let it get too big without knowing it.

Michael: I'm struck. Almost all the data points you talked about, just pretty manageable for us if you just start capturing it. How many leads did you get and how many had their first appointments? Cool. You can calculate a stick rate. Of the ones you met, how many closed? Great. You can calculate a close rate. Okay. Average client size is pretty straightforward. Cost per client, as long as you're somewhere capturing what time and dollars you're spending on marketing strategies, you can do it. I would think the pending days process probably takes a little...you got to get clear on your process and the exact steps of the process so you can measure from each incremental step of the process. I can envision that might be a little harder for some advisors to track if they're not necessarily as process-oriented in the first place. But just names, meetings, closes, money and you get the bulk of the statistics that you were talking about, particularly if it's just you tracking yourself.

Erica: Mm-hmm. Yeah. You can get all of them and it's so freeing. And sometimes they want to just do numbers in their head of, okay, I had 5 appointments last week and I think 3 of them kept. And I would advise against that. But put the actual names down because you forget. And that's circling back to what you were talking about earlier, is certain people stick out in our head. And the busier we get, we just forget those random one-off leads but that affects the data. So don't do it by just numbers. Put the names down the second they come into your office for a meeting and that will at least be a visual reminder too to figure out what happened or to call them. If they fell off the sales process and you're just looking at numbers, we're not going to remember to call Sally Smith.

Michael: So, what comes next?

Erica: Continued growth and we are really, our huge initiative this year is integrations and really helping people who have these big systems to get something that's automated. I hate that they have to fill things out twice. I hate it for their team and I always have. So that's honestly our biggest directive this year, is making it so they don't need to spend the time to double-enter data. And we've already got some really good plugins going, but we have a lot more coming. And that's exciting for my organized personality type part for them to get it a little bit nicer. But that's it. Continued growth. We want to be known. I want, again, my biggest goal is just to rewrite the narrative of data for these advisors, for them to understand that it's not hard to get. You don't need 5,000 data points to run a really good, efficient practice. And if you know benchmarks and you know the KPIs to look for, you're also not going to feel as inferior as Joe Schmoe who's at the event bragging about a 50% close rate. So, I guess next is just continuing to bring mental freedom to these advisors so they know what's going on in their practice, they can adjust and pivot if they need to, but also just feeling sound and secure in what they're doing.

What Success Means To Erica [1:28:22]

Michael: So, as we wrap up, this is a podcast about success and just one of the themes that always comes up is the word, success, means very different things to different people. And so, you're on this wonderful path of growing successful business, ironically focusing on marketing data for advisors to grow their successful businesses. So, business growth is going well. So how do you define success for yourself at this point?

Erica: For me, I deemed a while ago that the top things that I want to do every day would just be time with the Lord, running, time with my family and work. That's it. 4 things. I just very, very simplify my life. And if I can do all 4 of those things every day, that's success. And not have to worry about the chaos and the busy and meeting with a bunch of people. I like to live a quiet life and I do a lot of things and I'm achieving a ton of things, but that doesn't have to be loud. And it can leave a mark and it can be really powerful, but I want to live kind of this steady, room for quiet, room for laughter, time with my kids, enjoying my employees, loving my clients. Whether that Track That Advisor becomes well known around the world or not, that, to me, is success. And I'm living it right now, but I want to stay pretty honed in on that.

Michael: Very cool. Very cool. I hope we get you some good opportunities, but not too many, in folks that...

Erica: We'll figure it out. We'll automate, Michael.

Michael: ...hear the podcast. These are just more automation... Growth is really just one giant automation opportunity at the end of the day, right?

Erica: It is. It is. I read "Atomic Habits" by James Clear. Have you heard of this book?

Michael: Yeah.

Erica: Okay. He has a quote, and it says, "We do not rise to the level of our goals. We fall to the level of our systems." And I said, "Oh." So, yes. Hey, we get more clients, that allows me to make more systems. I love it.

Michael: I love it. I love it. Thank you so much, Erica, for joining us on the "Financial Advisor Success" podcast.

Erica: Thank you so much for asking me. It's been a pleasure being here.

Michael: Absolutely. Thank you.