Pandemic has put online marketing in focus, but lead generation and conversion remain challenging
Given the continuing challenges to in-person interaction, advisors have become more keenly aware of how digital technology can support different areas of their practice, including marketing. But awareness is a far cry from effective strategy and execution, and the vast majority are struggling to bridge the gap.
In its second annual financial advisor marketing survey, Broadridge Financial Solutions found that 77% of advisors have no defined marketing strategy. Simply developing a digital marketing strategy was reportedly a challenge for 91%; almost the same number reported challenges in execution, whether it’s from lack of time (86%) or selecting the appropriate marketing technology tools (86%).
“Advisers have all the obligations of running a small business and complying with regulations while keeping typically several hundred clients happy,” said Kevin Darlington, general manager, Broadridge Advisor Solutions at Broadridge. “Combine regulatory complexity and rapid evolution in the digital marketing sphere, and it sets up a challenging backdrop for advisors to create a thoughtful strategy.”
More dollars going to digital
The conundrum for advisors, according to Darlington, is that the sheer volume of distractions they face tempts them to look for quick hits and silver bullets. They don’t have the time and develop the ability to pursue a thoughtful, holistic digital marketing strategy, which sets them up for disappointment down the road. The upshot, he said, is that marketing campaigns can end up being penny wise and pound foolish.
“What the research shows is taking the time to create the strategy has a profound effect,” he said. “Even against all those challenges, the advisors who were finding a way through all that to create and execute on a strategy are seeing disproportionate rewards.”
The survey found that advisors with defined marketing strategies have acquired 24 new clients in the past 12 months on average, compared to just 14 new clients for those without a strategy. Seventy-five per cent of advisors with defined strategies expressed confidence that they’ll meet the growth goals for their practice over the next 12 months, compared to just 41% of advisors without a strategy. Having a strategy was also associated with advisors’ increased satisfaction with their marketing ROI.
The economic impact of the pandemic has caused a sharp compression in advisors’ marketing spend, going from an average of $19,194 in 2019 to $12,939 this year. Overall, 23% of financial advisors surveyed dialled down their marketing spend during the pandemic, while 22% maintained their marketing budget but reallocated their spend. Overall, there was overwhelming agreement on the importance of digital marketing, with 91% saying it has become more vital because of COVID-19.
Among advisors Broadridge surveyed, 55% said they’re currently putting marketing dollars in social media, making it second only to websites which 76% said they’re investing in. But more than two thirds said they will accelerate their investments in social media, compared to just 39% who said they’ll step up their investments on websites.
Digital assets are also set to figure prominently in advisors’ marketing efforts. Based on the poll, the top areas where advisors plan to increase their marketing spending were video content creation (80%), advertising in digital media (79%), audio content creation (77%), webinars (77%), and search engine marketing (76%).
Advisors would be wise to temper their expectations with respect to lead generation, however. According to the study, just 37% of advisors have obtained a lead that became a client through social media; within that group, 68% said they obtained a lead through LinkedIn, followed by 58% who gained clients from Facebook.
“We would say that social media is an important part of a broader digital presence,” Darlington said. “For advisors to have a fairly vibrant digital footprint, they need to be at some level invested in a presence through some social media channels.”
Driving marketing efforts with data
Social media channels tend to accumulate very different types of audiences: LinkedIn is ideal for advisors targeting young professionals or corporate executives, for example, while Facebook tends to be more casual. Platform rules can also shift quickly: Facebook used to allow small-business owners to gain sizeable organic reach two or three years ago, but today they’ll have to pay to ensure their commercial communications are reaching their intended audience.
“When you ask advisors to define their target client base, they’ll give you something like ‘I want someone whose net worth is between $1 million and $5 million.’ That’s a good start, but it’s a horrible place to stop,” Darlington said. “The less specific your ideal client persona is, the more watered-down your messaging gets, and you’ll become everything to no one.”
While advisors need to be specific with respect to client segmentation, they’re gaining more room to be adventurous in terms of geography. According to Darlington, 88% of advisors believe prospects are receptive to working with a non-local advisor, and three out of 10 are already making plans to do more nonlocal prospecting. The grand social experiment set off by COVID-19 has made people realize that it’s possible to have an effective and fruitful relationship through virtual interactions, which has opened up a host of possible advisor-client dynamics in the wealth management industry.
A prospect may not engage with a social media posting and convert right away, he said, but it can serve as a valuable stepping stone in a winding consumer journey across different channels. While referred leads that came from an existing client can sign on relatively quickly, he said a marketing-driven lead might take three or four months to convert on average.
The ability to track activity and effectiveness across the consumer journey is something Broadridge’s technology platform has been investing in heavily. “Our technology enables so much of the communication that advisors do in digital channels,” Darlington said, describing the framework of “pipes” through which Broadridge’s can personalize and optimize their content. “That lets us collect a tremendous amount of data and assemble a pretty high-fidelity picture of where their campaign is working and what isn’t working.”
Beyond data and analytics, Broadridge also takes a page from the advisor playbook by offering advisor coaching. The company has dozens of marketing specialists who, based on its proprietary digital scorecard, have regular check-in sessions with clients to see whether their strategic goals are being met, and what tactical tweaks might be required for them to do better.
“Being able to help and do that in a regulated industry is a little bit like threading a needle,” Darlington said. “But that's an area we lean into pretty heavily, and we're investing even more into it in the future.”
