Marketing - Financial Advisors

A tutorial on creating a ‘raving’ marketing plan


Successful marketing programs don’t exist in a vacuum

Ultimately, ultrasupportive clients result from firms that are committed to service. Customer communications is part of service, of course, but improving communications makes sense only once you have made a commitment to serve your clients in other ways, and once you understand who they are and what they want.


“We can handle the clients’ being unhappy with performance from time to time but not with the service. Getting back to a client promptly is something we control,” Mr. Perkins, a trustee said.

“Our focus is on retention, because when you are at a steady state, you can control expenses, staffing is stable, and we can really deliver on customer service,” he said.

One of the keys to excellent customer service is matching the goals and style of the firm with that of prospective clients. This is an area where even experienced firms can run into trouble.


How can an adviser communicate emphasis on service?

The most obvious first step is to state — in a company vision statement, for example — that client interests come first.

Second, the adviser needs a thorough understanding of all clients and their value. This means not just knowledge of the level of assets under management but also the return on assets, possible future assets, potential as a referral source, as well as their attitudes and needs.

The latter two attributes are important, because the adviser will want to focus research on client segments that are most important to current and future success, and those that best match the style of the firm.

Third, the adviser must find out how his clients feel about their client experience, and what they would like to see enhanced or changed. If possible, the adviser should use a third party to elicit client views; most clients simply aren’t candid unless they are speaking to an outsider.

Outside help need not be costly. If an adviser provides the materials, hiring an individual or a small research firm to mail out a survey and receive the returns can be inexpensive.

There also are online survey companies such as SurveyMonkey and Zoomerang that are very affordable. One-on-one interviews conducted by a researcher are a more costly, but informative, option.

Focus groups probably are the most expensive choice, and they can be useful when brainstorming or introducing a product.

Fourth, with the resulting information, the adviser can build an effective communications plan and tailor their client contacts, events, office support and portfolio reviews to create a superior customer experience. Marketing programs certainly can help build an adviser’s “fan” base, but before fans start to rave, it takes commitment to client service and to understanding their needs.

Libby Dubick is president of Dubick & Associates Ltd., a New York firm that helps advisers and financial services firms identify and develop distribution and marketing opportunities. She may be reached at libby@dubickconsulting.com.




How can an adviser continue to market while managing his growing business?
Libby Dubick

Here are some suggestions:

Get help. Once advisers know what they want to do, execution assistance may be all they need. A responsible college student or a stay-at-home spouse may be able to mail articles of interest to prospects, call local community groups to arrange speaking engagements or handle seminar arrangements. Candidates for the job may be found through local schools, newspapers or the Internet.

Get more help. Sometimes an assistant isn’t enough; a marketing professional may be needed to raise your current efforts to the next level. Ask other professionals or contact your local chamber of commerce for referrals.

Using a marketing or advertising agency will be more expensive than retaining a solo practitioner, but a larger organization may offer more resources.

If you want help articulating an investment strategy or building distribution, someone with industry expertise is required, but if lead generation is the primary task, it is more important that the person know how to find and market to your target audience.

Clearing firms and home offices of independent broker-dealers may be able to help you find marketing consultants who have worked successfully with advisers. They also may have packaged marketing programs and materials you can use.

Repeat yourself. Try to add new elements to your marketing program, but don’t feel pressured to come up with something just for the sake of novelty.

If your last two seminars were successful, it’s reasonable to expect the same results. Your best “new” idea might be an encore performance: Hold another seminar at the same place, serve the same food and give the same presentation.

Block schedule. When you do your quarterly review of marketing activities, carve out a block of time to schedule and arrange as many of these activities as far into the future as possible. This is an efficient and focused way of maximizing your efforts.

Find a partner. Many upscale retailers — jewelers, luxury-auto dealers and expensive clothing shops — hold events that attract affluent customers and may be looking for partners. You can help by augmenting their guest list or serving as a speaker. Networking is a good way to uncover these opportunities and expand your professional associations.

Become a collector. Hang a note by the phone to remember to ask for clients’ e-mail addresses, dates of family birthdays and similar information. Enter this into your client database, and you’ll have the information you need to create future marketing programs such as online newsletters.


Marketing efforts to affluent taking on a personal touch


Mellon Financial Corp. of Pittsburgh sponsored a February concert by Mr. Hancock, a jazz pianist, at Kimmel Center in Philadelphia, and the firm invited its private-wealth-management clients to meet the recording artist at a reception after the concert.

The target market of affluent individuals - those with $1 million to $2 million or more in investible assets - is "not as responsive to advertising" as less affluent clients, said Peter Hayes, director of Mellon's corporate-marketing department. But they are "very responsive to events. It's a very effective way to reach them."

Increased visibility

Mr. Giuliani was a featured speaker, as were Colin Powell and Tommy Franks at U.S. Trust Corp.'s "Conversations with Greatness" speaker series, launched last fall.
Allowing clients of the firm to listen to and meet such luminaries as the former New York City mayor, the former U.S. secretary of state and the commander of U.S. troops in Iraq, respectively, "positions U.S. Trust as an intellectual-thought leader and raises the firm's visibility with its key audiences," according to Allison Kellogg, head of corporate communications for the New York-based unit of San Francisco-based Charles Schwab Corp.

And next month, Northern Trust Corp. of Chicago will be the lead national sponsor of the King Tut exhibit tour.

"Northern Trust is at its core a relationship company," said Rebecca Hayne, vice president of corporate communications. "Events and sponsorships are embedded in any marketing to wealthy individuals and families."

"This kind of marketing has become more important than ever," said Anne Doss, the Winston-Salem, N.C.-based managing executive of Wachovia Wealth Management Services, a division of Charlotte, N.C.-based Wachovia Corp.

"It allows us to have a relaxed conversation with clients and potential clients. We get a chance to tell our story in the kind of environment that engenders that level of discussion," she said.

As an example, Ms. Doss cited the Philadelphia Wine Festival, which Wachovia sponsored earlier this month. Wachovia hosted nearly 100 clients and prospects for dinner and a wine tasting at Le Bec-Fin, the city's most famous and exclusive French restaurant.

"Wine collecting is a lifestyle event of the affluent audience whom we want to serve," Ms. Doss said. "It's a shared passion that we want to be part of."

Wachovia is also taking aim at its target audience by a sponsorship agreement for a "branding opportunity" with the Sarasota (Fla.) Polo Club, which included signs, banners, branded jerseys, clubhouse functions and program advertising. In September, the company will sponsor the Wachovia Cup Charity Regatta at the American Yacht Club in Rye, N.Y.

Marketing experts say wealth management firms will continue to raise the bar for creative involvement with exclusive and personalized events and sponsorships.

"The higher you go up the food chain, the more important one-on-one sessions are," according to Beth Allan, formerly president of Cambridge Brand Analytics of Natick, Mass., and now the Natick-based president of the advertising and brand analytics division of Phoenix Marketing International in Rhinebeck, N.Y., which specializes in market research for the high-net-worth marketplace. "There's an exclusivity there that resonates with the target audience."

Indeed, Zurich, Switzerland-based UBS AG, which began a global-brand advertising campaign two years ago, views sponsorship as an "important brand-building instrument," according to Beni Eggli, managing director and head of global-brand management.

The biggest challenge in reaching affluent customers, he said, has been "cutting through the clutter and getting our message heard. There is a lot of communication [directed] at that target audience."

This spring, UBS donated and lent works of art to the Museum of Modern Art in New York for its "Contemporary Voices: Works from the UBS Collection" show. The company also recently signed an agreement to become a long-term sponsor of The Players Championship of professional golf.

Practice Management-Mistakes to avoid when building a marketing plan

* Trying to do too much. We all know that more is not always better, and there are times when our lives become so overloaded that the addition of one more chore, responsibility or "to do" item can cause things to fall apart. Just as this holds true for your personal life, it's true for your practice. Unfortunately, many a broker's idea of marketing is promoting themselves whenever and wherever possible. Instead, learn how to focus on a few things. Successful brokers build their books by having just three or four strategies and doing them well. Successful marketing means executing with excellence - not taking part in a firm's "campaign of the month."

* Not knowing your numbers. Within the numbers of your business lie the secrets to improving your marketing. In order to understand what you're doing wrong, however, you need know your baseline/benchmark numbers. For example, what is your closing ratio for prospects? With how many prospects do you actually get a face-to-face meeting? What percentage of those prospects become clients? Don't say it's around 50% or 75%; figure out the exact percentage. You need to measure your activities. If you're doing seminars, what percentage of attendees schedule appointments with you? If you're getting referrals from other professionals, how many do you receive compared with the number you give out? You have to know your numbers because if you don't, you'll have no way of knowing what's working and what's not.

* Not staying with your strengths. Ever heard the adage "Stick with what you know"? Well, it applies to marketing, too. Before you venture into new territory such as sending direct mail to a niche of people with whom you've never dealt, make sure you've already maximized your core strengths. For example, if your strength is giving great seminars, why not do an extra two or three a year instead of a direct-mail campaign?

* Having unrealistic expectations. We all should strive for the brass ring, but don't set yourself up for failure or disappointment. I've seen a lot of brokers work hard to improve their marketing only to become frustrated because they had unrealistic expectations. In fact, the best example of this is how often brokers expect a high response rate from a direct-mail campaign or seminar invitations.

Avoid this disappointment by knowing your minimum break-even point. For example, if it costs you $5,000 to conduct a seminar, how much in new assets do you need in order for the seminar to be a success? Also, in order to have a true measurement of any marketing vehicle, you need to look at it over a period of time rather than just once. This means you need at least three attempts with any marketing strategy before you can determine its level of success.

* Abandoning strategies that work. How many times have you done something that worked, but stopped because it got boring or you had a better idea? Everyone thinks the grass is greener on the other side, but don't ditch a successful marketing strategy just because it's easy or you're bored.

If your current marketing efforts aren't cutting it, create a marketing calendar for the next four months and develop four strategies that will help you. Use one strategy per month and allow yourself time to plan and implement each one. The key is that you're looking to find marketing strategies that work for you or to tweak your existing strategies so they're more effective. These four strategies will become your "marketing legs." If you can't come up with four, use the following list to get you started: Referrals from existing clients, up-selling or upgrading current clients, seminars, cold calling/telemarketing, networking, direct mail, alliances with certified public accountants, client round tables and advertising.

Once you begin trying out your four strategies, see how well things are going by referring to your baseline/benchmark numbers. If you're not happy with your results, don't be afraid to make changes. If you do, make sure you change only one aspect of your marketing at a time and continue to measure it. Then, after a few more times, check your numbers again. By changing only one aspect, you'll be able to tell how much of an impact that particular change had on your success. Always look for ways to improve what you're doing.

Also, make sure that your marketing is not all strategic or all tactical. Strategic marketing is network oriented, such as building relationships with other professionals, getting referrals, etc. It's great for the long term, but it takes time to see the fruits of your labor. Because of this, you need to include tactical, or short-term, marketing as well. So make sure your marketing legs are a mix of both strategic and tactical marketing because you'll need balance in order for things to take off.

Many brokers forget there is a huge difference between marketing and sales. Marketing is everything you do to get prospects in the door or to get clients to ask about a new product. Selling means closing the deal, completing the transaction. A lot of brokers don't understand that someone's marketing is only as good as their ability to sell. Make sure your sales skills are just as strong as your marketing efforts. Otherwise, you're just wasting your time.

Also, realize that money does not equal marketing success. You cannot solve a problem simply by throwing money at it. For example, if you're looking to build your client base and begin running newspaper ads with your photo and a quote, nothing is likely to change. Visibility means nothing in our business unless there's an incentive to act attached to it. After all, most people find a financial adviser through word of mouth or referrals.


Increasing the odds of financial-product success

A major reason good financial-product ideas go bad is that the product development process does not include sufficient input from sales and marketing — the areas of the firm closest to the customer. Sales and marketing executives, who have the experience to adapt a product to market needs, generally are not given an opportunity to decide on essential product features. Instead, product developers, who are too often isolated from the market, may fall in love with intriguing bells and whistles, and ignore the core needs of the end user. The result: products that are not consumer friendly.

Let’s look at some real-life examples.

One major brokerage firm came up with a variable annuity product so complicated that it could not be explained clearly enough to the sales force for them to present it to clients.

In another case, investment managers at a niche asset management firm developed a bond mutual fund without consulting sales or marketing. After an expensive launch, the fund failed to gain traction. Why? Its fees were too high, it lacked an international component the market wanted, and it was uncompetitive with a portfolio of bonds that the adviser could put together on a separately managed basis — all flaws that marketers could have pointed out had they been included in product development.

Unfortunately, the marketing function, particularly product and channel marketing, all too often play a secondary role at financial firms. Typically, it is viewed largely as a communications or sales support function. Rarely are marketers invited to sit at the executive table, help formulate corporate strategy, or take profit-and-loss responsibility for a product.

Measurable results

This isn’t the case in other industries. In consumer products, for example, chief marketing officers are expected to produce measurable results and to justify the return on their marketing investments.

And marketers do add to the bottom line. By being close to the customer, they come up with innovations that consumers really want. The recently introduced 100-calorie cookie or snack pack is a good example. This is a product innovation with no change to the underlying product; it is simply an astute observation on the part of marketers that consumers are trying to limit their calories. The profit margins on small packages are some 20% higher than on larger packages — and they’ve been flying off the shelves.

This kind of market-oriented thinking takes place all too infrequently at asset managers, insurers and other financial-product creators. My firm conducted a study that analyzed new-product development at asset management firms: It found that key functions associated with product management most often resided in the distribution area.

About 70% of the time, these functions reported to the global head of funds distribution and ultimately to the chief investment officer. In about 20% of cases, product development reported to the chief operating officer, and in just 10% of cases, the person responsible was the global head of marketing.

In most cases, marketing played only a minor role in the upfront, strategic development of the product or service. Instead, marketing was brought into the process during the execution phase, primarily for the development of communications and the rollout program.

Ironically, many of the core responsibilities of the product development function are marketing related:

• Identifying market opportunities.

• Market intelligence.

• Data and performance analytics.

• Competitive analysis.

• Pricing.

• Product rationalization.

• Positioning/differentiation.

• Determining value proposition and brand value.

According to a benchmarking study from McKinsey & Co. of New York, the use of a formalized product development/management function is central to profitability at asset management firms.

Not surprisingly, more and more asset managers are instituting consistent and disciplined processes and procedures, and their leaders are demanding accountability for dollars spent. And in today’s tough regulatory environment, internal auditors have begun stipulating that product development processes be documented and accountable.

With such an emphasis on process, accountability and success, why not draw on the analytic expertise and customer knowledge that already exists within the organization in its marketing group?

To become the high-level resource asset management firms need — and to overcome their second-class status — marketers must assume responsibility for growth and provide their product development colleagues with informed and sophisticated marketing data, analysis, targeting and segmentation.

They are up to the challenge. And if logical, well-designed products are the result, their firms — and their firms’ clients — will thank them for their efforts.

Read Evelyn Ehrlich, “The Financial Services Marketing Handbook” (Bloomberg Press, 2004),