Kitces & Carl Ep 132: What Drives Real Advisor Marketing Success: Vanity Metrics Vs Engaged Prospects

***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and Stitcher.

Show Notes

• Kitces & Carl Ep 131: What’s The Real Purpose Of (New Year’s) Goals And Finding The Next Best Action To Move Forward
• Seth Godin's Blog
• The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness By Morgan Housel
• Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones By James Clear

Kitces & Carl Podcast Transcript

Carl: Michael Kitces, how are you?

Michael: I'm doing well. I'm doing well. How are you, Carl?

Carl: It's good. Actually, when you asked me that when we first started our call, I told you it's hard for me to describe how good I feel because we just returned from a really awesome trip and time with the family and outside and in the water, all those things are great. So things are really...I think I got to be in 2024 before most of you because I was in New Zealand. And it's a really cool year, turns out it's a really cool year.

Michael: Oh, yeah, because the whole time zone thing. You really got 2024 almost a full day before the rest of us.

Carl: I think 22 hours or whatever. Yeah, it was amazing. So super good, which brings me to this. We talked recently, I believe it might have even been in the last episode, about goals.

Michael: Yeah. Setting goals, figuring out your next activity, step to move forward.

Carl: Yeah, I got outed as somebody who actually cares about goals despite saying they don't, the whole thing.

Michael: I don't have any goals. Let me tell you about my goals and daily activities to achieve them. Yeah, I caught that.

Building An Audience On Shaky "Success Porn" Numbers [01:10]

Carl: Yeah, that was nice. Nice work. But there's a thing that's really been bothering me. It's bothered me for years. It's probably caused me more trouble than almost any other single activity. And it has to do with audience building and the numbers, right? The numbers. I actually have a term for it now. I call it "success porn". People like running around throwing these fake numbers around. And so I wanted to talk about this because it seems like a really... it's a good goal, actually. "I want to make a bigger impact in the world. I want to serve more clients. I want my work...I think I have something valuable to say that will change people's lives. I want more people to hear it." That's kind of the language I hear financial advisors use all the time. And I think it's absolutely true. The real financial advisors, the people who listen to this, we're such a small, small, small sliver of the world's population, and then, broadly, the industry's population. And I'm convinced that if people knew what most of the people that listen to this, if people knew what they actually did, there would be a line outside their door. It's just so confusing for people to sort it out. And so having the goal of like getting my voice out in the world, really valuable.

Michael: All right. So this isn't necessarily audience per se. This is marketing. It's just like, how do we get the word out as advisors about what we do to whoever it is we're trying to reach to do business with them?

Carl: Yeah, so if that's the general idea, you start to break this down and you're like, "Okay, well, how do I do that?" Well, I do that by...well, everybody knows because if you've been to a conference, there's been somebody on stage telling you this, "Oh, you've got to build an audience or a platform." Right? And then you lead to like, "Okay, well, where do I do that?" Okay, well, I need... Maybe let's just narrow it down. There could be a million ways to do it, but you've got all the socials like TickSnap or SnappySnack or the Toot Machine used to be called Twitter, now called X. You got Instagram. You got all that stuff. You got your email newsletter. You got LinkedIn. You could write for your local paper. You could do a bunch of things. But in the end, let's just pretend like I have a goal that I want to build a bigger audience. And somebody pushes you on it and says, "Okay, well, how are you going to know if you built a bigger audience?" And let's just say you settle...this isn't the argument here, but let's just say you settle on newsletter subscribers or...

Michael: Okay, build my email list.

Carl: Yeah, email list or followers on Twitter. Either way. Let's just go with email list because we don't want to build our audience on MySpace. Oh, that's right. That's not a thing anymore. So email list and you're going to have a number.

Michael: Yeah.

Carl: Right? And so as soon as you... Here's the thing that's caused me all this trouble is I see people running around talking about these numbers and how many subscribers. In fact, on some landing pages...and there's nothing wrong with this, by the way. On some landing pages where you'd sign up for a newsletter, it says, "Join 16,132 people who get my weekly newsletter."

Michael: Precision matters. It's authentic. Yep. Not approximately 16,000, 16,132.

Carl: Which is actually the whole point of what I want to talk about. And then recently on Twitter or X or whatever it's called now, they...

Michael: I'm still going with Twitter. And I'm still going with Mr. Ross, but I'm not using a different name.

Carl: And I'm going with the toot machine, so it's fine.

Michael: Toot machine.

Carl: Because that's what...you don't tweet, you toot. It's fine. Don't, please. Just let it pass. Let it pass. That was good too. So you've seen all these posts on Twitter about 23 million...I had 23 million impressions last year. It's like that time of year. It's sort of like the Spotify wrapped thing, like everybody's... So all these numbers floating around. So I want to talk about these numbers and what they do to you, the authentic financial planner, trying to build, trying to change the world by building a little bit, trying to get their voice out, all these really good, noble goals. And then they bump into these numbers. And I want to talk about that a bit. So just I'll pause for a second. Where do you want to go? What are you thinking?

Michael: I'm just thinking about this in the context of what we're trying to do as advisors. Right? I'm just trying to get some more clients who will work with me and do business. It's a good dynamic. Most of us, I don't think, think of ourselves as in an audience-building frame. But we do ultimately have some version of all of this, we're mostly trying to build some kind of list of prospects. Maybe that's some names in your database of people you've had interactions with, maybe that's collecting business cards, maybe that's your newsletter or your email newsletter or your social media following. So, fair. We're all trying to build towards some way that we're generating a list of prospects who may do business with us at some point.

And I do get, I think, where you're going with this core point that, at least in a social media world in particular, wow, people throw out some crazy big numbers. Then when you actually think about it, your social media posts got 23 million impressions, what does that mean? Is that a really bored doom scrolling dude that just like hit refresh 23 million times all year? Is this because Twitter served by tweet in front of a whole bunch of people who couldn't care less about what I do, but that juices their numbers and then Twitter can say they're still a successful platform and that they shouldn't be written down by 70% because look at all the impressions they've got? What does it mean to me? And when I hear some numbers like that, I started thinking about it and I'm like, is that good? It sounds like a large number.

How many clients does that get you? That's my question. How many clients does that get you? Nobody really seems to have an answer on the ratio of Twitter impressions to actual people who do business with you and pay you money for services.

Carl: Yeah, for sure. And this is kind of what I want to talk about. We know, for instance, if we shift to email subscribers that are getting a regular relevant email in their inbox, that conversion rates go way up. But even there...what I really want to talk about is the success porn problem that I see. Because people listening to this podcast, their voices need to be heard. Right? If they want them to be heard, they need to be heard because I believe we have the power to change the world. And I'm not overstating that, we can change the way somebody feels about their money and shift it from misaligned to aligned. However, you define that, we literally are changing the world. That's how powerful I think the work that the audience that listens to this does. It needs to be out there.

So they're going to go start doing it. And then they're going to have, I would imagine... I've had this conversation so many times. I know we all feel it. You go do it and you get discouraged because you're like, "Well, gosh, it's my mom and my sister." And that was me, right? It was my mom and my sister. I found out my sister was lying, it was really just my mom opening my emails. But at the same time, I was seeing all these other people saying they've got 16,123 people. I was like, how did they get there? And then 23 million impressions. What does that even mean? And how does it...

So there's something important here because I don't want people to get discouraged at just doing the work. One time I found it and I've gone back to try and find it and I can't. I've spent hours trying to find it. It was a graph of Seth Godin's blog traffic, and this was at the point where he...and I don't know if he still is, but it was like the most visited personal website on the internet. And I found this graph somewhere. And it was like five or six years of like nothing happening, literally like nothing, a flat line. And it just reminds me of the compound interest curve. And so many people get confused because everybody else is pointing...either they're at the steep end of the curve or they're pretending, which I think is happening way more... When you see the actual numbers, if you sell more than...and I don't have them in front of me, so I want to be really careful here. But if you sell more than 5,000 copies of your book, it's something like 80% of business books sell less than 5,000 copies or something. There was some number like that. And then you see Morgan selling 5 million copies. And you hear a lot about that, but nobody posts, I sold...

Michael: Morgan Housel, "Psychology of Money".

Carl: Yeah. And you hear a lot about that or James Clear. You hear a lot about that. What you don't hear is, "Hey, my book sold 12 copies last year." And that's most people's podcasts, the download numbers you hear, it's crazy. The tail on podcasting, it's like 95% of podcasts, some crazy number. I can't remember what the number is. Most of them have almost nobody listening to them, but you hear about people who are getting, you know...

Michael: Now you're kind of depressing us to not want to pursue any of these things.

Carl: Well, no, but here's...this is the point, is if your goal is to change the lives of your 100 or 200 clients, right, why care about any of that stuff? In terms of comparison, that's the point. We got to somehow get ourselves out of comparing. And maybe I'm just talking to me. Maybe nobody listening to this has this problem. But I sometimes get caught in the trap of...and this just happened recently, which is why it's on my mind. I sometimes get caught in the trap of being like, "Wait, that person started 10 years after I did. How did they already get there?" And then I have to remind myself two things. Number one, it doesn't matter. And number two, I don't even know if it's real.

Michael: In a social media world in particular, I find that's often the bigger dynamic. Just, is it real? Is it really real? Sometimes it's literally not real, like bot followers and such in a social media world. Less now, but early days of social media, there were websites that you would go to to buy either 1,000, 10,000, or 100,000 followers. And literally, just, you paid the site a couple of bucks and a bot would create 10,000 accounts, and then they would follow you and you could say you had a big audience. And they were bots. There was no human involved, literally, no one to see what you tweeted, tooted, because they're all bots. It was just to validate this like vanity social proof metric. And maybe the hope that when someone sees you've got tens of thousands of followers, then they will actually follow you even though they were fooled because actually, the other 50,000 are fake. You're my first human being follower who is actually a human being. Even though it says you're 50,000 and first.

Carl: Yeah. And I think that's important for people to hear. And first of all, it doesn't matter. So we shouldn't even be needing to hear it. But it always matters because we're humans and we fall into it. But how many reviews you get, how many downloads you get, how many followers you have, what really, really matters is, one by one, doing the work. And I'm just pointing back to an email newsletter. If there's 97 people, if there's 64 people on that newsletter list and they open it, and it grows a little, and it grows a little, and it grows a little. Everybody I know who has sent a regular weekly email, everybody I know, which is almost no one because no one will do it, but everybody I know who's actually done it. That thing has grown slowly, but the impact has been outsized. It's really engaged. It's coming directly from them. They've got new clients. They're making an impact. But the only way they've continued is if they've sort of ignored and been really clear about the purpose and ignored everybody else.

Michael's Experience With Large Impressions And Low Conversions [14:47]

Michael: Yeah. This reminds me, many, many years ago in like early days of social media and email marketing, our advisory firm was doing this marketing event, like old fashioned seminar, retirement seminar to a list of prospects that we had built over the years. And we were working with this local CPA firm, like the young up-and-comer CPA firm that was big into social media and email space and had...I don't remember what it was, but like tens of thousands of followers when our company account had like 132 people on Twitter. So it was like, this was a big deal. Like, "He has tens of thousands of followers. Let's make sure that we have," This was the company conversation. Like, "Let's make sure we pick a space where if we need to double the room size, they can expand it for us." Because we were going to try to do the seminar for 100, but we're not sure if like 200 plus are going to show up because he has all these people on his list. And so we do the whole co-marketing thing. We go to our list and he goes to his list. And we got like 30-something people out from our list, which is pretty good for the kinds of seminars that we did. And he got 2.

2 people showed up. It was like, you have tens of thousands of people on your list. We made all these business growthy plans of this amazing opportunity because we were so enamored by the numbers, the outward-facing numbers. And I never actually found out what it was. I don't know if he bought them as like fake accounts or whatever or just pumped up the numbers or what. Nothing happened. He said he had all these prospects that were interested in his services and then when he said something, no one cared. No one noticed and no one cared. Well, two people cared, but out of the size of his list, basically, no one cared. And to me, what it reinforced very quickly to me early on...like this was very guiding and informative for me in how I ultimately then built my platform and built businesses. I stopped caring about how many people are on the list and completely stopped caring about social media accounts. I literally don't look at them. I have no idea who follows me on what platforms. What matters at the end of the day is, how many people care what you say. Because they actually like engage with it somehow. And do they take action when you say something?

It's like if I talk about the services that I provide, do they listen and engage? And if I say, "Hey, you know, we're offering an opportunity for you to come in and learn more about what we do," do they show up? So for our advisory firm, a month or 2 ago, we decided to do a webinar to the consumers on our list, sent an email to 2,000 people, and more than 200 of them registered for a webinar in 24 hours. I'm like, okay. They're listening. They're paying attention to what we're saying. And when we invite them to take action...we don't do this often. We rarely send emails like that to the list, but because we don't ask very often, when we do, they're often likely to take action.

And so from my end, I could send that email to 2000 people. I could send that email to 20,000 people. It doesn't matter how many people are on the list. It matters how many people are actually engaged and how many people take action. So I think if I sent a direct mail out, I would be lucky to get a 1% to 2% response rate. I sent an email and I got a 10% response rate.

Carl's Internal Email List And Just Doing The Work [19:23]

Carl: It's so important. It's just so important. I had a very similar experience. It was an email list that claimed to have the best email list in our whole industry, 250,000 people. We worked really hard on this big, long thing and one person bought it. One person. I was like, "That can't be true." Okay, fine, maybe it was three. I don't know. But it was so insignificant, it didn't matter. And we had an email list one-tenth, yeah, one-tenth the size, and when we did something, hundreds and hundreds of people. And so I would sum that all up by saying like, one personally earned follower...I don't know what to call them. A raving fan is not the right word, but like somebody who engaged directly with you and raised their hand and said, "I want to learn more. I'm going to give you permission to show up in my inbox in whatever way you just promised. So I'm going to say like once a week, I'm going to give you permission to show up in my inbox. And I put my name in that email because of something I read," that is worth 10 times, maybe even more, maybe 25 times or 100 times some promise of something from somebody else. And it's just so common. This is a regular thing for me. "Hey, can we do a co-marketing thing?" And what they really mean is, can we get access to your list? "We've got all these people and we'll give you exposure." And it's just...I wish I could remember all the time. It's just not worth the time. Just do the work for your people. You know what I mean?

Michael: But the piece of it to me that matters in the advisor context, particularly in this world where social media throws around these just ginormously comically large numbers, it doesn't take a lot of actually meaningfully engaged prospects to make like an entire client base, right? Even just in the traditional advisor marketing world, the old rule of thumb was 10-3-1. For every 10 people that you get to tell what you do, they're actually interested in learning what you do and you tell them what you do, 3 of them end out becoming prospects. They actually say, "Tell me more," and they engage with a prospect process, and 1 of those 3 becomes a client, right? 10-3-1. So 10 people you get to tell about what you do, a third of them become interested prospects, and a third of those becomes a client. Which means if I want to build a base of 100 clients, I need a thousand people on my list, whatever it is, 1,000 email subscribers, 1,000 Twitter followers, 1,000 connections on LinkedIn, whatever it is. And that's not all at once, that's like lifetime cumulative ever.

And if you 10-3-1 them, you get to an outcome of a great client base. And if you want to grow more clients than just yourself, then keep going. But if you're trying to fill your personal client base, that pretty much gets you there. And I see a world where there's so much effort of like getting to these big numbers or even sort of the vanity numbers kinds of effects that we've talked about. I'm like, why would you try to get 10,000 followers? You only need 1,000 people who care about what you say to get 100 clients. Sounds like a bunch of extra work to get the other 9,000 who apparently either don't care what you say or you couldn't handle the volume even if they said yes. But realistically, they're probably not that engaged. And so to me, just resetting, what does it take to get 1000 people who care about what you say? So they're engaging with your tweets. They're actually opening and clicking on your emails when you send out content. When you get to 1000 of those and you periodically tell them what you do and ask them for an opportunity to work with them, you will have a client base. You can fill your client base from that.

Carl: Yeah. I almost just want to say amen. And I think the only thing I would add is, yeah, what's the goal? Is the goal to become Twitter famous or is the goal to build a business? Because those are vastly... When I get asked from advisors, "Should I participate in social media?" I'm almost like, well, look, let me give you another example of social media, right? Host a monthly breakfast in your hometown and shake people's hands and talk. So you've got social and you've got media. That's social media.

Michael: Wait, wait, what's the media? I get your point, but what's the media in this analogy?

Carl: Talking. You talk, you talk, you're a content creator.

Michael: That's a medium. I don't know if it's media, but talking is a medium.

Carl: Oh, I'm creating content at my monthly breakfast. I talk. I give people valuable information. That is media. So it's social media. All I'm saying is, look, I'm not even sure. If I wanted to build a local business of 100 people or 250 people, I'm not even sure, does Twitter serve any purpose? I don't know. Could it? Sure. We all have examples. Sure. All I'm saying is keep in mind, what's the goal? Do you want to become Twitter famous or do you want to build a business? And those two are not necessarily...

Michael: I would extend that to say you build a business by getting people who are actually engaged with what you have to say and take action when you say something. And that's what you want to be measuring and focusing on. In practice, email open rates, click rates, social media engagement rates. There's a couple of KPIs you can set around that if you're trying to figure out how to measure it. But it's not the metric at the top. It's how many people are actually engaged with what you say. Because it turns out it doesn't take very many who are actually engaged with what you say. And frankly, it's easier to build a list of 1000 people who actually care about what you say than 50,000 who don't.

Carl: Yeah. Yeah. Yeah. And just remember the stories that Michael and I both told about the promise. We could both probably tell stories for days about the promise, it's not worth it. It's not worth it if your goal is to build a business, right? Cheers, Michael. That was super fun.

Michael: Yeah. Awesome. Thank you, Carl.

Carl: Okay. Bye.