Yes they will, unless smaller RIAs are willing to commit part of their budget to Inbound Marketing!
The marketing of financial advice and services is changing rapidly. In the past just about every financial advisory firm used Outbound Marketing tactics to initiate contact with investors: telemarketing, direct mail, seminars.
Outbound Marketing tactics produced a reasonably level playing field. Anyone could make marketing calls or send out direct mail so the size of the firm mattered less and individual sales skills mattered more.
However, Outbound is increasingly obsolete because who wants to spend time and money on marketing tactics that have rejection rates approaching 100%. Most investors do not want to be contacted.
New Playing Field
It should not be a big surprise that old marketing methods are being disrupted by the Internet, software, online tools, and quantitative measurements.
The Internet is a major game-changer because it opened the door to Inbound Marketing that is more efficient than Outbound Marketing. It enabled advisors and firms to use the Internet to make it easy for investors to initiate contact with them.
Three key elements produce a successful Inbound Marketing experience. Advisors need:
- Substantial visibility on the Internet so they are easy to find
- Visibility that produces a steady flow of traffic to websites
- Websites that convert traffic into qualified leads
The bottom-line: The playing field is no longer level. The big firms can afford to spend substantially more money on Inbound Marketing than smaller firms. They will use this marketing muscle to build a big presence on the Internet that will reach large volumes of investors.
The Internet gives investors unprecedented access to public information about advisors. This includes advisors they know and advisors they don’t know.
They no longer have to talk to advisors to learn more about them.
Sales skills will be less important. What investors see on the Internet will be more important.
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In the past, marketing was more sales skills than science. The most successful advisors usually had the best selling skills.
Today, the Internet and an Inbound Marketing sales funnel make success a function of numbers that can be monitored by advanced analytic systems. The challenge is creating numbers that produce revenue.
They are the numbers of investors who:
- Find advisors on the Internet
- Visit advisor websites
- Submit contact information
- Meet with advisors (face-to-face or virtual)
- Hire advisors
You already know that the key to a successful Inbound Marketing strategy is convincing investors to initiate contact with you.
Step one is they have to find you on the Internet. There are a number of ways they can do that.
Search Engine Marketing (SEM; Advertising)
You have seen the advertisements that appear on page one of Google. The advertisements are dominated by brand name firms with deep pockets such as: Morgan Stanley, Vanguard, and Fidelity.
Smaller RIAs cannot afford to pay $30 per click for 14 clicks to produce one qualified prospect for their firms. This is a $420 per lead cost with no guarantee they will even meet with you.
Search Engine Optimization (SEO; Organic)
If you don’t like the SEM numbers you will not like the SEO numbers much better. Every financial advisory firm would like to be represented on page one of Google for key words that investors use when they are seeking financial advisors or information about financial advisors.
Page one is critical. Google says, 91.5% of users view page one and do not scroll to page two.
This means thousands of firms are vying for the same limited space. Why is the space so limited? Google gives preference to the .org’s and .edu’s because they are informational and not trying to sell anything.
From a Google perspective, if you want to sell a service on page one, you should be an advertiser (SEM).
The single most popular way to raise your visibility on the Internet is writing articles that are published on your blog site. But, even this is not as simple as it sounds. Google is continuing to raise the bar:
- It prefers longer articles – 1,000 words plus
- The articles have to be keyword rich
- People must open and read the articles to have value
- The more frequent the articles the better
How many smaller RIAs have the staff to right relevant, original, 1,000 word articles that have a high probability of being read by large numbers of investors?
What About Advisor Websites?
Websites are advisors’ single most powerful marketing tool. It has one all -important purpose. It has to be good enough to convert website visitors into qualified leads.
Template-based websites using generic content and stock photos will not produce results. Not when the big RIAs are spending hundreds of thousands of dollars to create custom websites that are optimized for the Internet.
Traditional, Virtual, & Robo Advisors
The increasing popularity of virtual and Robo advisors will also be dominated by the Big RIAs – Schwab, Vanguard, Fidelity. Betterment may be a serious contender if it can convince enough smaller RIAs to use its platform and market its services.
Every wirehouse will have a Robo capability by the end of 2017.
The traditional (brick & mortar) advisors who meet with clients face-to-face will still dominate the market for the foreseeable future. But, it is only a matter of time before virtual and robo advisors become more acceptable alternatives. From a communication perspective, technology will replace cars, conference rooms, and face-to-face meetings for a large percentage of investors.
Small RIA Strategies
What is one consistent characteristic that impacts smaller RIAs? They do not have marketing budgets or dedicated marketing staff with digital marketing skills. Firm principals are the marketing professionals and it is a part-time job because they also produce financial plans and invest assets for their clients.
Are these smaller RIAs up the proverbial creek without a paddle? Not necessarily, but they have to make very smart decisions when they develop digital marketing strategies that compete with major RIAs that have much bigger marketing budgets.
A smaller RIA’s best bet is to focus some of their marketing dollars on Local SEO. This is by far the most economical way to increase your Internet visibility. And, Local SEO produces leads in the market that matters the most – a 50 mile radius of RIA offices.
Local SEO works for the following reasons (source: Flag.io):
- It is Inbound Marketing – investors initiate the contact
- 40% of all searches are related to location
- Advisors make their firms easy to find for local search queries
- Advisors reach potential clients when they are looking for help
- Local directory marketing has higher conversion rates than traditional advertising options
- Local search is second only to word-of-mouth referrals for adding new clients