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When confronted with a marketing decision, the first thing most advisors ask how much it will cost. But that’s the wrong question.
Marketing does not have to ruin your budget, but it does take money to effectively market your business. As a marketer, I will be the first to tell you that there are no guarantees with marketing. You could execute the exact same campaign that brought another financial advisor 20 new clients and not get one lead from it. There isn’t a universal approach, because there are too many variables at play.
This leaves many advisors wondering whether marketing is worth the cost.
But marketingisworth the cost. Here’s why an investment in marketing is a smart one and the real question financial advisors should be asking.
Without marketing, your firm won’t grow
Imagine that you decide to drop all your firm’s marketing efforts today – no more website, marketing brochures, social media or community sponsorships. Picture what your firm would look like 10 years from now.
My prediction: It would look the same as it does today.
It might even look worse.
If you’re lucky, you will have a little organic growth from a few client referrals, which will make up for any clients you lose. In a worst-case scenario, your firm will be doing a lot worse than today, since you wouldn’t have made any efforts to make up for the natural attrition of clients.
In today’s competitive environment, marketing is an essential component of a strong business plan. It’s the way that you let people know about you, your firm and the services you have to offer. Most advisory firms want to attract more clients, yet few firms can achieve the results they want unless they make a concerted effort to let people know about their business. Savvy firm owners realize that they cannot survive without marketing. Competition is fierce, and it is too easy for quiet voices to get lost in the noise.
The marketing question you should be asking
Once you accept that marketing is a mandatory activity, the most important question is not: “Is marketing worth the cost?” Instead, ask: “How should I be spending my firm’s marketing budget?”
Unfortunately, answering this question isn’t easy.
Marketing has changed dramatically in the past few years. Traditional forms of marketing – print and TV advertisements, events and public relations – are now joined by social media, digital advertising, online video and blogging. With so many marketing opportunities to choose from, how do you decide where to spend your money? What marketing strategies will give you the biggest bang for your buck?
I can’t tell you whether your firm should spend your money on producing a video for your website, hiring a public relations firm, hosting a client appreciation event or buying ads in local publications. The answer depends on what you hope to achieve. You must have a strategy behind your marketing efforts or else you will just be spending money aimlessly.
Before you decide how to allocate your marketing budget, develop a marketing plan with measurable objectives for the year. If you’re not sure how to go about creating a plan, take a look at my last article, in which I explain how to build a 2015 marketing plan.
Measuring the success of your marketing efforts
Once you create and implement a marketing plan, then you measure its cost effectiveness. Monitor your marketing efforts and measure your results to determine whether your individual marketing strategies are worth the money you’ve invested.
If you’re not seeing the return that you hoped for, think about adjusting your strategy. Measuring the value of marketing efforts can be challenging, however. If you’re not sure how to go about it, check out McKinsey & Company’s great article, “Measuring Marketing’s Worth.”
Without marketing, you cannot grow. Stop worrying if you should be spending money on marketing and ask a more strategic question: “How should we spend our firm’s marketing dollars?” Stay ahead of the game and think of marketing as an investment in the future of your company, not a supplemental expense.
Mandy Fisher is a marketing manager for clients of Wealth Management Marketing, Inc., a firm that provides outsourced marketing department services to registered investment advisors and fee-only financial planning firms. For more information, visit www.wealthmanagementmarketing.net.
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