If you're an adviser, don't ignore the elephant in the room that is digital marketing, or you might find yourself struggling to survive.
In our industry, clients leave for other firms, they take distributions and they pass away. In short, there's a constant outflow of manageable assets. With all that attrition, you need a steady stream of new clients just to break even.
So why is it that other than waiting for referrals, many advisers do very little to acquire new clients?
I believe it's because effective marketing approaches are difficult to identify and master. Even the ones that work well can eventually become obsolete.
(More: 5 pillars of marketing for advisers)
Case in point, I've co-hosted a call-in radio show for over 20 years. It's always been a highly reliable source for client acquisitions. But a few years back, it became clear that terrestrial radio was, among other things, being replaced by digital channels.
In response, a mere four years ago, we challenged our team to figure out how to show up on digital channels with the same regularity we'd enjoyed on the radio.
Enter digital marketing.
Digital marketing is how we leverage a variety of advertising platforms — think Google and Facebook — and techniques, such as search engine marketing, search engine optimization, social media and email, to introduce and promote our brand to people online, night or day, anywhere in the country.
How important is it? Seven years ago, my business partner and I wrote a book on our marketing processes. We literally gave away the store, but there was no mention of digital marketing. If I wrote that book today, it would likely be 70% about digital.
So just how effective is it?
Digital marketing has not only enabled us to grow our future client database from a few thousand people to many tens of thousands, it's been instrumental in our growth from a successful regional firm into a fast-growing national brand with offices in several states around the country.
How does it work?
It allows us to identify qualified leads, based on age, income and interests, across the country and then "drip" on them by emailing them marketing communications repeatedly over longer periods of time.
It enables us to measure which approaches — what messages, article topics, ad placement or imagery — get the best results, and why. And it gives us specific insights that allow us to woo folks using education, offers and live events (to name just a few), all in a format that is nonthreatening and even self-paced.
Digital marketing not only enables us to provide financial education to thousands of people — addressing whatever their specific needs are — but, just as importantly, it allows us to use these same weekly articles and educational materials to keep in touch with our existing clients.
And, as we know from our internal research, the No. 1 reason clients leave a firm is because their adviser never (or rarely) contacts them.
To be certain, digital marketing takes serious expertise and commitment, and it may take you a while to hit your stride. But if you find the right mix of personnel, when it comes to expanding your footprint, it's the best way to grow your brand outside of outright acquisitions.
Make no mistake, digital is marketing. Those advisers who refuse to embrace it will soon find themselves left in the dust by those that do.
Scott Hanson is co-founder of Allworth Financial, formerly Hanson McClain Advisors, a fee-based RIA with over $4 billion in AUM.