Should Financial Advisors Ignore Digital Marketing During the Pandemic?
The obvious answer is no. We have all seen how the Internet has had a profound impact on the marketing practices of numerous companies in several major B2C industries.
We believe the impact on the financial industry is about to increase due to the Coronavirus and its impact on the interactions between people.
A lot of the financial service industry’s past practices for marketing its products to investors were based on face-to-face contact. This created maximum impact for the personalities and sales skills of the 650,000 advisors who sell investment advice, services, and products in the U.S.
The Internet was just beginning to have a significant impact on the marketing practices of firms in the financial service industry. For example, financial advisors are abandoning obsolete outbound marketing tactics (advisors contact investors) and adopting inbound marketing practices (investors contact advisors).
All of this will change when investors choose to minimize unnecessary contact with financial advisors. In the future, a much higher percentage of interactions will occur on the Internet.
The Digital Revolution
The financial service industry will have to adapt, but the primary beneficiaries of the digital marketing revolution will be investors who use the services of financial advisors.
That’s because the revolution shifts power from financial advisors to the investors who rely on them. Consider the following, in the past investors had to talk to advisors to learn more about them. This meant advisors controlled all of the information that investors used to select them. And, a lot of the information was verbal, so this increased the impact of the advisors’ sales skills.
Today, investors can visit financial advisor websites and Google search their names. They may even visit third party websites (FINRA, SEC, States) to learn more.
Financial advisors no longer control all of the information that investors use to select them.
Advisors & Information
The Internet is a convenient way for investors to find financial advisors in their communities. All it takes is a few geo-specific keywords in Google and they have pages and pages of choices.
Finding advisors is an important application, but it is not the only one. There are several other web-based applications.
They can visit websites and Google search names to learn more about particular financial advisory firms.
They can use the Internet to obtain general information about advisors. This is a popular application for investors who want to know more about financial advisors before they start interviewing them.
A major application is searching for financial information on the Internet. This creates a marketing opportunity for the advisors who can provide this information on their blog sites.
A major feature of the Internet is investors can maintain their anonymity while they find financial advisors, research advisors, and learn more about them. This is a source of power for investors who determine when they provide their contact information to advisors.
Competitive, Complex, Simple
Digital marketing is competitive, complicated, and simple all at the same time.
It is intensely competitive. Large numbers of firms seek visibility for the same keywords in the major search engines.
It is complex because investors have to find advisors on the Internet, be motivated to visit their websites, and be convinced to give-up their anonymity and submit their contact information.
It is simple because three primary metrics drive the success of digital marketing strategies:
- Financial advisor visibility on the Internet
- Number of visitors on financial advisor websites
- Websites conversion rates
Can Advisors Ignore Digital Marketing?
The longer advisors ignore digital marketing the more difficult it will be to create Internet visibility and website traffic. Competitors who made an earlier commitment to digital marketing will dominate the space and it will be difficult to dislodge them.
A financial advisor’s marketing budget may determine what they can afford to spend on digital marketing. It still stands to reason the sooner firms start digital marketing the easier it will be down the road to increase visibility and website traffic.
Building a presence on the Internet is a marathon and not a sprint. So even a token effort gets the ball rolling until firms can commit more resources to their digital marketing efforts.
Doing nothing is the equivalent of being left out. It is the equivalent of being invisible on the Internet. Perhaps this explains who so many financial advisors complain about their lack of digital marketing results.
The competitive, complex part of digital marketing means financial advisors who do not have digital marketing expertise inhouse will have to outsource the work to experts who know how to market financial advice to investors on the Internet.