There is no question the highest quality leads are referrals from current clients, friends, family, and Centers of Influence. The referrals already have a positive predisposition that is based on what they were told by the referral sources. If they trust the referral source, there is a good chance they will trust the referral.
The problem with referrals is there just aren’t enough of them. They are hit and miss and a lot of financial advisors are reluctant to solicit referrals from current clients. So, just about every financial advisor gets a few referrals per year. They also lose a few clients per year. They are lucky if the referrals that they win offset their various forms of attrition. Consequently, for most advisors, referrals are just not a reliable marketing strategy for promoting growth.
Then there are old-school paid advertising strategies that could be print, radio, or TV. This is a way to buy visibility that can produce leads for financial advisors. The problem is the quality of the leads produced by advertising may not be very good. After all, anyone can respond to an ad, qualified or not.
Another alternative is buying leads from third parties. This may be the easiest way to acquire leads. But, the third parties sell their leads to multiple financial advisors and the quality is suspect because a percentage of their leads are not seeking financial advisors. They are seeking information.
This article will make a few more points about Outbound Marketing, then provide some proven tips about Inbound Marketing:
- How did Outbound Marketing work for financial advisors before the Internet?
- Why did Outbound Marketing Work for certain financial advisors?
- Why is Outbound Marketing widely considered to be obsolete?
- How did the Internet create Inbound Marketing?
- Why does Inbound Marketing produce high-quality leads?
- How do financial advisors make the Internet their best source for new clients?
- Why are more investors using the Internet to find, research, and contact financial advisors?
- What are the biggest challenges when financial advisors want to produce leads using digital marketing?
How did Outbound Marketing work for financial advisors before the Internet?
Back in the day, if investors wanted to learn more about financial advisors they had to talk to advisors. This opened the door for financial advisors to use their relationship and sales skills to approach investors and convert them into clients. This made these skills more important.
Sales skills are still important, but the Internet gave investors more control earlier in the sales funnel.
Why did Outbound Marketing work for certain financial advisors?
Let’s assume that financial advisors (professionals) work for financial advisors (firms). The firms make it the professionals’ responsibility to produce their own leads, prospects, and clients.
They can solicit referrals from people they know, but eventually, those sources are used up, and/or the lead flow is greatly diminished.
Then they are forced to initiate contact with people they didn’t know (Outbound Marketing). The most frequent strategy was to buy a list of names and telephone numbers and start dialing for dollars.
Or, they may start sending direct mail to the names on the list. In more recent times, they may use email marketing to initiate contact with strangers.
Why is Outbound Marketing widely considered to be obsolete?
Outbound marketing was used for decades because financial advisors had to initiate their contact with people they did not know. This worked a small percentage of the time because investors had to talk to financial advisors to learn more.
Outbound Marketing was never an ideal solution. It was a massive numbers game that was based on a disruptive sales process when financial advisors contacted people who did not want to be contacted.
Financial advisors calling people they did not know, at their offices or homes, was always a contradictory form of marketing - that was, financial experts, using boiler room sales tactics to reach investors.
The rejection rates for this type of marketing were extraordinarily high (99%). Hundreds of telephone solicitation calls to talk to a few people who may not buy what the financial advisors were selling.
In fact, thousands of advisors would leave the industry every year because they were burnt out dealing with all of the rejection. The turnover rate for new advisors was in excess of 50% at the biggest firms that used Outbound Marketing tactics. Many of those tactics have been abandoned.
It was also a very time-consuming and expensive process. Advisors had to spend hours per day marketing services to people who did not want to talk to them.
You can see why so many advisors were happy to jump off of the Outbound Marketing bandwagon.
How did the Internet create Inbound Marketing?
The Internet gave investors access to vast amounts of information about financial advisors and the firms that they work for.
Investors began using the Internet to find financial advisors when they entered geo-specific keywords in Google - for example: “find financial advisors in Dallas”.
Then investors started using the Internet to learn more about financial advisors (firms and professionals). According to our surveys, 82% visit advisor websites, and 64% Google search financial advisor names. Then they would schedule interviews with the ones they like best.
Investors will give up their anonymity and contact advisors when they are convinced they have found the right firms and professionals.
This Inbound Marketing process, based on investors contacting financial advisors, created several new marketing opportunities for financial advisors.
Meanwhile, it gave the investors more control over the process that they used to screen, contact, and select financial advisors.
Why does Inbound Marketing produce high-quality leads?
In a nutshell, financial advisor Inbound Marketing works because it fits the way people make all types of buying and selection decisions - starting on Amazon.
First, people have to find what they are looking for. In this case, financial advisors who provide planning and investment services. Or, financial advisors who specialize in working with pre-retirees.
Second, they have to do their homework or in this case, screen advisors to identify the best ones based on credentials, ethics, services, and business practices.
Third, they initiate contact when they are ready to interview financial advisors.
Investors prefer this process because they are in control of all three stages.
How do financial advisors make the Internet their best source for new clients?
If you are a financial advisor, you have a choice. You do not have to sit around waiting for the telephone to ring. Instead, you can use Inbound Marketing tactics to get investors to contact you using the Internet.
There are three key elements of an effective Inbound Marketing strategy:
- You need Internet visibility so investors can find you
- You need meaningful traffic to your website
- You need a website that converts traffic into prospects
Why are more investors using the Internet to find, research, and contact financial advisors?
We believe the Internet is just beginning to impact the financial services industry the same way it has other industries. The top application is the Increasing number of investors who are using the Internet to find, screen, and contact financial advisors. For example, they may:
- View online research reports and profiles
- Visit advisor websites
- Google search names
- Read your blog posts
- Visit the sites of regulatory agencies
- Follow you on social media
All with complete anonymity until they are ready to be contacted. In the past, they have never had this amount of control.
What are the biggest challenges when financial advisors want to produce leads using digital marketing?
If you are like most advisors, you have a website and you are familiar with the concept of Inbound Marketing. You may even be writing a blog post or two each month. But, your activities are not producing the results you want and you aren’t sure why this is happening.
There is a good chance your current digital marketing strategy is flawed for a number of different reasons.
Effective digital marketing starts with a team of specialized experts due to the extraordinary number of skills it takes to produce meaningful marketing results:
- How do you increase your Internet visibility for the right keywords?
- How do you bring the right traffic to your website?
- Does your website convert visitors into prospects?
- Are you competitive with other financial advisor websites?
These are daunting challenges, but if they are mastered, the Internet will be your best source for high-quality prospects.
Editors note: This post was originally published in 2016 and has been completely revamped and updated for accuracy and comprehensiveness.