Executive Summary
Over the years financial planners have had a love/hate relationship with marketing. In most of those years, though, it's more of a hate/hate relationship. The traditional methods of outbound marketing - from cold calling to traditional advertising - have had so little benefit for the overwhelming majority of planning firms, that most don't even have a budget for marketing in the first place. To the extent any business development occurs, it's strictly from referrals, and any "marketing" expenses don't extend much further than paying for social events with clients or centers of influence to cultivate more referrals.
But as the digital age reaches financial planning, an entirely new marketing opportunity emerges: inbound marketing. The basic principle: instead of blasting out solicitations hoping you happen to hit a prospective client like finding a needle in a haystack, create content that is useful, relevant, and interesting for your target clients, and let them find you.
Inbound Marketing For Financial Advisors
The inspiration for today's blog post is an extension of an article I wrote last week, entitled "3 Ways the Digital Age Will Change Financial Planning in the Next 10 Years", which began to explore how key aspects of financial planning practices will change in the coming years. In terms of marketing, the digital age creates a tremendous opportunity for planners to thrive in the digital age, as inbound marketing techniques can be especially effective for professional financial planning practices.
The key to success for inbound marketing is creating content that is useful, relevant, and interesting for your target clients. The content may take many forms, from blogs, e-books and white papers to videos, webinars and pinboards. Once created, the content is made public and available, so that your target market can find your materials when they search the web (the process of making your content more searchable is called "Search Engine Optimization"). These key elements are summarized in the graphic to the right from Hubspot, a popular platform used to support inbound marketing efforts.
The biggest challenge, however, is that inbound marketing only works if you have a clearly defined target market. As I've written in the past, I believe that eventually every financial planning professional should have a niche, as it's crucial for everything from effectively targeting the services your business delivers, to your referrability with your clients, to your marketing - especially your inbound marketing.
The Importance Of Having A Niche
For example, imagine your target niche is working with families that have young children. The content on your website might have tips for everything from the best 529 plans for babies to videos explaining how to figure out the right amount of life insurance to buy when your first baby arrives. In addition, your content might also includes a quick video about how to soothe a baby that's teething, or a guide you found with tips about how to childproof the house when the baby starts to crawl.
The point is just not to be pushing financial information; the point is to be a resource for your target clients with whom they can build trust and a relationship as you impart wisdom and sharing interesting content in any number of areas relevant to their world. At some point, when your readers have a question that is financial and you make it clear that you're available and ready to help, they'll contact you when it's right for them. In a meantime, they may even start sharing with their friends where they're finding all that great information... which means your base of prospective clients is growing. (For an example of a planner targeted at new parents, check out Kristin Harad at VitaVie Financial Planning; another example of inbound marketing techniques for a target clientele is Brittney Castro's Financially Wise Women.)
However, if you haven't defined your target market, you can't create content that's relevant for them. And no, people who can afford my services, or meet my asset requirements, or pay my minimum fees, is not a target market. Because you can't create relevant content that attracts new clients and prospects with a target that broad. In fact, a good tip is that if you can't think of what kind of non-financial content would be relevant for your target market, you probably haven't defined it well enough yet.
Remember, in the digital world of the future, where technology allows us to connect and communicate regardless of geography, people won't simply work with the best planner that's recommended in their area. They'll work with the best planner in the country who can solve their problems. Which means that by being unfocused in your target market, your clients will slowly be taken away by competitors from across the country who are each individually more relevant and expert in the needs of any particular one of your clients... until you have few left.
Inexpensive Content Marketing
Another upside of this approach is that in the digital world - where you can work with anyone, regardless of their geography - the techniques of inbound marketing are remarkably inexpensive. Creating a blog and a website costs almost nothing; most social media accounts are completely free. Creating content - not to mention sharing content you find that others have created but is relevant for your target market - is also free. At worst, you may spend a little bit of money having your website properly designed, especially to optimize it for web searches so your target market can actually find you when they search for information. But compared to outbound marketing techniques like traditional advertising, these kinds of "content marketing" strategies cost pennies on the dollar in cost, with a very high potential return on investment.
The bottom line is that as the digital age transforms financial planning, simply relying on referrals generated by relationships will become more and more challenging. Clients don't simply want to work with someone they're referred to; ideally, they want to work with the person who's the best at handling their particular needs and situation. In the past, clients have settled for working with someone nearby who was recommended to them, because the alternatives were limited. As technology and the digital age advances, the limitations and barriers to those alternatives are breaking down.
So what do you think? Do you work with any clients who are not in your immediate geographic area? How did they find you? Have you heard of inbound marketing before? Do you have a blog or use social media to attract "inbound marketing" prospects? Are you thinking about trying it in the future?
Michael
Good article, you have highlighted very clearly some of the benefits of moving with the times. One area that financial planners should be concerned is the quality of their website compared to those who move ahead with blog posts etc. Planners with static ‘brochure’ style websites, no matter how fancy, they will look dull and and lazy compared to the more progressive planners. And as we all know, you only have one chance to make a good first impression, these days, that first impression will normally be your website!
Good article but how do you handle the compliance that should be handcuffing you?
Not all compliance departments handcuff all forms of social media and inbound marketing. Many advisors are using social media tools effectively, in full compliance with their RIA or broker/dealer rules.
For instance, Financially Wise Women by Brittney Castro (noted in this blog post) is operated in compliance with LPL’s broker/dealer.
Michael of course I agree that going digital is the future for the industry. With today’s consumer discovery, research, and buying process combined with cost effective digital communications tools, there is just no stopping this force. The advisors who embrace and adopt are going to thrive. There is no doubt in my mind.
Certainly compliance can be an issue for many, especially for advisors associated with B/D’s, but many of the B/D’s are allowing blogs. (by the way Jeff Rose is now an independent RIA) Technically a blog is a website, but it’s driven by dynamic content that still must be pre-approved by B/Ds.
In my experience, many advisors still don’t get the value (because there is rarely ever a short-term gain), they don’t want to do the work of consistently creating content, or they don’t know how to even begin the process. I also think it’s a question of budgets. Some level of investment is going to be required to run a strategic and sustainable program, but the benefits aren’t immediate which makes it a tough sell.
I still believe that the majority of advisors don’t yet view blogging and social media as critical business communications tools for helping, selling and service. This especially became apparent to me at the last conference I attended. My eyes were opened 🙂
Your thoughts?
Michael, an alternative to your excellent suggestions about the need for financial advisors to market more aggressively and about the (relative) ease of creating content — a task that nonetheless will be a ‘barrier to entry’ to many financial pros who don’t write particularly well — is to hire someone to create content for them; that is, to engage a freelance financial writer. The cost of engaging a freelancer writer won’t necessarily ‘break the bank,’ particularly if the marketing push is successful, and it can be offset in a variety of ways. Where can your subscribers find freelancers who can write engagingly and succinctly about financial issues? I’m one of many financial writers who are part of a group called Indispensible Freelancers on LinkedIn. I’d suggest that your subscribers start there.
we are in conversation with implementing Hubspot’s software system but wanted to know if anyone has had any experience with other competitors and wanted to know if we should consider any other players other than Hubspot. Please advise.
HubSpot is a great homebase for inbound marketing. It puts all the tools you need under one roof. Everything is tied together which improves your analytics therefore improving your future decisions.