Editor's Note: This post was originally published in June 2016 and has been completely revamped and updated for accuracy and comprehensiveness.
Two primary financial advisor marketing methods can be used to reach investors: Inbound and Outbound Marketing. The key difference between the two is who initiates the contact - investors or advisors.
It is also important to note there are a couple of other strategies that are used by advisors. One is asking clients, family, and friends for referrals. Another is networking with Centers of Influence (CPAs, attorneys, etc.). However, our focus in this article is on traditional Inbound and Outbound marketing tactics, realities, and results.
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In case you are not familiar with the terms, financial advisors have used outbound marketing tactics for decades. Its most common form is cold calling. Advisors purchased lists of names and telephone numbers and started dialing for dollars. This has been called an invasive marketing process for decades because financial advisors were calling investors who did not want the calls.
Paladin Tip: Salespeople are the primary users of outbound marketing tactics. Higher-quality advisors have stopped it due to its invasive nature. Even some wirehouses have discontinued the business practice.
On the other hand, inbound marketing is made possible by the Internet - just like the telephone made cold calling possible in the past (everyone had one). Investors use the Internet’s search engines to find, research, and contact financial advisors. The key for inbound marketing is that investors initiate contact with advisors and not the other way around.
Investors use the Internet to find advisors, information about advisors, and information about particular financial topics or concerns. Regardless of their reasons for using the Internet it still represents an opportunity for advisors to be in contact with investors.
This article will review key differences between outbound and inbound marketing for financial advisors.
The Numbers Game and Financial Advisor Marketing
Marketing is always a big numbers game when financial advisors rely on cold calling and direct mail to generate leads. For example, 100 telephone calls will generate one or maybe two “qualified” leads. Or 1,000 pieces of direct mail with an invitation to a free workshop might generate a few acknowledged attendees that may or may not attend.
This makes outbound marketing extremely expensive and inefficient, but it has two unique features that differentiate it from inbound marketing. When advisors use outbound they control the marketing process.
They determine how many calls per day they are going to make or how many pieces of mail they are going to send each month. When advisors use inbound marketing this power shifts to investors. They decide who they want to talk to. And they are anonymous until they make this decision.
It is a Digital World
The digital world gives investors access to unprecedented amounts of information about financial advisors. Paladin data show that 82% of investors will visit financial advisor websites to learn more about them. And, 64% will Google search the financial advisors’ names to gather even more information.
What they see on the Internet determines who they contact for introductory calls. Or, who they contact for financial information. The latter is a definite marketing opportunity because investors may collect information before interviewing financial advisors.
Paladin Tip: Do not underestimate the power of the Internet. It's time to embrace digital marketing for financial advisors.
Why is Outbound Marketing Obsolete?
Back in the day, cold calling worked because everyone had telephones. It made this form of contact feasible. Today, everyone with significant assets has Internet access which makes digital communications possible.
Today’s investors are more empowered than ever to find the types of financial information they are seeking on the Internet. For example, they can view website content, reviews, ratings, testimonials, and compliance information about firms and the professionals who work there. Social media is another disrupter for financial advisors because investors can "share and compare" information.
On the other hand, outbound marketing is already obsolete due to Caller ID and other types of filters. Investors rarely take calls from people they don’t know. And, other types of filters, make this method of contact even more difficult.
Firms Versus Professionals
As noted, outbound marketing can be implemented by professionals whereas Inbound Marketing is more applicable to firms.
It is the advisor professional who picks up the telephone and starts dialing investors or sending out batches of direct mail. Firms may advertise their services, but it is the professionals who are making the calls.
How tough is the outbound marketing process? It is the #1 reason for professionals leaving the industry. After they have worked friends and family that have to start contacting strangers. Rejection rates approach 100%, which gradually wears down the professionals.
Firms can make use of inbound marketing because they own the brands and websites. They can build their visibility on the Internet and produce traffic for their websites. Their websites can be designed to convert visitors into qualified leads.
Paladin Tip: For the past 25 years, financial professionals have been able to buy leads from third parties (WiserAdvisor, SmartAsset). The third parties use digital marketing to produce the leads.
Inbound Marketing Strategies
Inbound marketing (also known as Search Engine Optimization, SEO, Search Engine Marketing, SEM, or paid advertising campaigns) for financial advisors is based on reaching the ideal type(s) of investors for financial advisors and getting them to the advisors’ websites. Visibility and traffic are two of the primary metrics for measuring digital marketing results.
Financial advisor firms have several tactics for building online visibility and producing website traffic. Some of the methods include:
- Optimizing your RIA website so it's easier for potential clients to find you on the Internet
- Identify keywords that ideal types of clients use when they search for financial advisors on the Internet
- Develop quality content, using those keywords, for your blog regularly that targets the types of clients you want to work with
- Create a sustainable social media strategy which can serve as an inexpensive way to target your prospects
- Build local visibility on the Internet
- Generate compelling free offers on your website that engage with your visitors
- Develop an Email nurturing strategy that turns leads into active prospects
Suppose you have a large drip list, and you send them a high-quality communication each month. Over time you can build your credibility as an expert and trust so you have a competitive advantage when the investors are ready to start interviewing financial advisors.
Paladin Tip: What if you put your message in front of the right targeted audience with thoughtful, educational content that helps them make informed decisions about everyday concerns that impact them?
By aligning your content with your customer's interests, you naturally attract the right type of "inbound" traffic to your website. Once visitors are on your website you have the opportunity to engage them with additional content, free offers, and Calls To Action that convert visitors into qualified leads.
The Importance of Financial Advisor Websites
A high-quality financial advisor website is a critical part of the digital marketing process for advisors. That’s because it has the critical role of converting visitors into qualified leads. And, the higher the financial advisors’ minimum asset requirements the more important the role.
More than 80% of the investors, who are seeking financial advisors on the Internet, will visit websites to learn more about the:
- Backgrounds of the firms
- Qualifications of the professionals who work at the firms
- The firms’ service offerings
- The types of clients served by the firms
- Top 5 reasons for selecting a firm
A high percentage of financial advisor websites function like online sales brochures. The ideal website will leverage the right keywords for maximum Search Engine Optimization (SEO) ranks. They display most of the information that investors are seeking. Where they tend to fail is giving investors reasons to initiate contact - so they don’t.
There can be three potential problems if your current website is not producing leads:
- Your firm’s current marketing strategy is flawed
- Your online marketing efforts are not producing enough traffic
- Your website is not designed to convert visitors into qualified leads
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About Paladin
Paladin is a team of digital marketing professionals with more than 100 years of collective financial industry experience marketing our clients' services to individuals, institutions, and financial advisors. Paladin is a boutique agency that was founded in 2003 to provide game-changing digital marketing services to a limited number of firms and professionals in the financial service industry. Our services range from designing and developing custom websites to providing SEO, SEM, and Fractional CMO services. Want more information about our digital marketing services? Email your request to Paladin’s CMO: Jack@PaladinDigitalMarketing.com.
