Do You Really Have Enough Prospects to Sustain Your Business?
There’s a looming marketing crisis the industry isn’t acknowledging. I encourage you to pay attention to it so that you can maintain sustainable growth for years to come.
In February, I attended the 2017 T3 Advisor Conference. As you would expect, the floor was chockfull of vendors promoting the latest advisor technology tools. To be honest, I was blown away by some of the tool’s available today to help advisors engage with clients. The client video resources alone were amazing; I suggest you check out the vendor presentations and follow the T3 TechHub for highlights.
The question is, who is going to watch the videos, or interact with these cool new tools?
You can show all the videos and marketing resources to your clients, of course. And your current prospects, too. Then what? What happens after your current prospects have seen every video, read every email, used every calculator, perused every newsletter, and answered every phone call that you send their way? Who will watch your videos next?
At some point, your current prospect list will go stale. Everyone on it will either convert—that is, become your client—or fizzle out. If you don’t have any way to replace them, then your business is not sustainable. Eventually, you will hit a wall and realize that you need to be more focused on inorganic growth.
Let’s make sure that doesn’t happen. I want to introduce a critical marketing concept that’s rarely talked about in the advisor business: the sales funnel.
Picture all of your potential prospects as passing through a funnel. The top of the funnel—the widest part—holds the most leads. These leads aren’t terribly well qualified, other than meeting your general target profile. You don’t know them, and they don’t know you. Most will never become your clients. So why are they even there? Precisely because most will never become your clients. In other words, if only a small percentage of people eventually go on to sign with you, you need to start off with a much larger pool of potential prospects before they start dropping out.
The middle of the funnel is where you engage prospects, build a relationship and demonstrate your value. These are the folks watching all your videos. The bottom of the funnel is where prospects choose to convert to clients.
Here’s the problem in our industry. Almost every marketing dollar that advisors spend today—on new videos, snazzy engagement tools, marketing analysis, CRM—targets the middle of the funnel. Very little is spent filling the top of the tunnel. And that’s unsustainable.
How did we get here? In a traditional advisor practice, the sales process is managed by the firm’s rainmaker—typically the owner. The rainmaker goes out, attends community events, appears at speaking engagements, networks, shakes hands, and performs initial introductions to the firm. After that, it’s simply a matter of calling now and then to stay top of mind. It’s a very linear sales journey. And it’s how we ended up in a situation where it’s typical for 95% of a firm’s business to come from referrals.
Unfortunately, the rainmaker referral model is outdated. It’s too slow, too expensive, and ignores the changing way investors want to communicate with advisors. And it doesn’t scale up well, so it can’t compete against the growing number of firms that are automating the top and middle stages of their funnels.
In my next post, I’m going to share some ideas for automating the first two phases of your funnel. They’re just as cool as any video.