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Why Digital Marketing is Your Best Bet for Scaling Your RIA in 2021

What is a new client worth to your RIA? You could look at one year’s worth of asset-based revenue or you could look at the potential revenue that is derived for the life of the client relationship.

Based on a crude calculation, if your current client retention rate is 90% over a seven-year time period and your average revenue per client is $6000 per year then the value of a new client relationship is approximately $37,800. Of course, this number does not account for market appreciation, reinvested income, or new money from current clients. Let’s say this boosts the lifetime revenue potential to $60,000. 

How much expense would you be willing to incur to produce $60,000 of revenue?

The goal of this article is not to produce one client that produces $60,000 of revenue over a seven-year time period. The goal of this article is to describe a financial advisor digital marketing strategy that will produce a steady flow of new clients that produce an average of $60,000 of revenue over this time period.


Lead Generation

Assuming you are an RIA or IAR that owns your brand and website you have two options for producing leads. You can buy them from a third party or you can produce your own leads. This article is going to make a case for producing your own leads because they are of higher quality than the leads that are produced by some of the third parties.

On the other hand, if you are a financial professional or you do not own your brand and website, then your best option may be to buy leads.

Why is producing your own leads, using digital marketing, a superior solution? Because the investors have visited your website and Google searched your name before they decided to initiate contact. What they see on the Internet has a major impact on who they contact. This is no different than any other purchase that is based on homework.


Two Marketing Tactics

If you decide to produce your own financial advisor leads, then your biggest challenge will be scalability - that is the production of a steady flow of new leads that meet your asset requirements and other criteria.

What is your best choice for the production of this steady flow of high-quality leads?

There are the obsolete Outbound Marketing tactics that financial advisors have used for decades - for example, cold calling and direct mail marketing. However, very few advisors, in particular higher quality advisors, use Outbound tactics to produce new clients. Not when rejection rates approach 100%. It is just not an effective use of their time and money.

The alternative, if you own your brand and website, is to use Inbound Marketing to produce a steady flow of new leads for your firm. In this case, investors initiate contact with financial advisors. This eliminates the high rejection rate when investors contact you, but what investors see on the Internet becomes increasingly important. You might even say what they see is critical.

So how do you make this happen?


Inbound Marketing is Your Scalable Marketing Strategy

One of the biggest trends for financial advisors is the use of Digital Marketing to scale their businesses with a steady source of new clients for their firms. And one new client per month, using the above math, could be worth $600,000 of revenue per year over the lives of the average client relationships.

This is a no-brainer if financial advisors can develop a marketing strategy that produces a steady stream of new prospects and they convert a healthy percentage of the leads into clients.

To eliminate any potential confusion: Inbound Marketing is the Digital Marketing tactic that financial advisors use to produce Internet visibility and traffic for their websites. Digital marketing is a more all-encompassing set of terms that include what happens when investors visit financial advisor websites.

Financial advisors have to master two principle strategies that produce the scalable digital marketing results they are seeking. If advisors do not have the time or inclination to master this type of marketing then their best solution is to outsource the work to a digital marketing agency that specializes in their industry. This type of agency should be responsible for the financial advisors’  Internet visibility, website traffic, and the conversion rates of their websites.

Investors must be able to find financial advisors on the Internet before they can visit their websites. Therefore, you need Internet visibility that produces the right types of traffic to build a scalable business. There are several tactics you can use to produce this type of traffic: Content marketing (blog articles), social media, pillar pages, local SEO, and drip email marketing systems. You can also increase your visibility with the use of video.

Let’s assume you have a steady stream of high-quality visitors on your website each month. The next step is a website that is designed to convert visitors into qualified leads and contacts. Leads are investors who are seeking financial advisors - they have an immediate need. Contacts are investors who are seeking information - they are added to your drip list until they are ready to talk.


The Secret Sauce

A scalable business requires increasing online visibility, a steady flow of visitors to your website, and a custom website that is designed to convert visitors into qualified leads.

So why are some advisors more scalable and successful than others?

They realize increasing numbers of investors are using the Internet to find financial advisors. But, an even bigger number is using the Internet to research advisors. What they see on the Internet impacts who they contact for appointments and information.

To build scalable online businesses that are based on Digital Marketing principles, financial advisors must develop a significant presence on the Internet in ways that build their credibility. Then they need websites that reinforce that messaging and deliver the information that investors are seeking when they use the Internet to find and research advisors.

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