Wake up and smell the marketing!
Posted August 14, 2007 10:30 by Hoard Client Systems CEO.
About Hoard Client Systems CEO
Hoard Client Systems CEO's affinity for investing and financial matters began more than 20 years ago when he began investing in the stock market through a class in high school. Now, in 2006, he is being looked to for his innovation in altering the efficiency in which financial professionals communicate with clients.
A recent survey showed that 70% of advisors plan to spend less than $1,000 a month on marketing. Even as 99% of advisors say they need to improve at least one of their marketing practices.
Another indicator of advisors’ troubles with marketing is expectations:
- 52% of advisors expect 20 new clients from marketing of $1,000 to $2,000
- Only 17% of advisors would consider an investment of $1,000 to $2,000 a success if it garnered less than 11 new clients
Excuse me as I begin my tirade…
ARE THEY FRIGGIN’ CRAZY!!!!!!!!!
What is the average commission on a new client? Geez! Even a $25,000 investment at 4% is $1,000. And I hope most of you aren’t accepting clients with less than $25,000 minimums or you have more problems than marketing.
If you brought in two crappy $25,000 accounts you’ve made $2,000. On a $1,000 marketing investment…now for you financial professionals out there…what kind of return is that on investment?
100%. How long did it take you to get it? A month (at most).
Again, you financial professionals out there…what is the annual compounded return on a 100% per month? That number is too high for me to calculate. Anybody able to give it to me?
How much would you invest in an investment with that kind of return? I’d mortgage my house! Heck, I'd mortgage my mother's house!
And yet, only 17% of advisors would think a $1,000 investment in marketing yielding 11 new clients is a success:
11 crappy $25,000 accounts at 4% commission = $11,000 in commission
$1,000 marketing investment returns AT A MINIMUM $11,000 in commission and only 17% of advisors would think that is a successful marketing campaign.
With the math and investment skills of the remaining 83% that didn’t think that was successful…it would be safe to say, I would choose one of those 17% as my financial advisor.
Guys and gals, you do the math on your clients' investment accounts. Why not do it on your own investment…MARKETING!
If you invest $100 and you make back $140 in a month, what should you do? Take the $140 and reinvest and make $196...then $274...then $383...then $537...$751 just 6 months later. Take something that is working and keep investing more in it!
Marketing only costs you money when you make less than you spent. Otherwise, invest...invest..invest!
Discuss
Comments
462 days ago Charles Griffin wrote:
Bob, While I appreciate your spirit and your "math" I think that it is a bit demeaning with respect to two issues. One, some people are new to your method of marketing and have been scorched in the past. Two, there's nothing wrong with trying to help someone who might not yet have $25,000 to invest. The principles of good stewardship are as applicable for them as for anyone else. Thanks for the opportunity to have input. Regards, Chas
463 days ago Joe Interrante wrote:
If it were that easy everyone would spend the money. Our firm did a mailer of over 13,000 invites to three seminars and got less than 25 people to attend. We lost a lot of money and we do a pretty good workshop. Financial advisors including me are very sceptical
462 days ago Chris Everett wrote:
Mike you are absolutely right! It's a shame I wasn't told that when I first started in the business. It definitely takes money to make money. That's my "peice of the pie"! :o)
457 days ago Hoard Client Systems CEO wrote:
Thanks Chris! Joe, you are right, don't spend a dime on ineffective marketing. As I've talked about before, test, test and test again. Then once you've found marketing that works spend a lot more than $1,000 a month on it. Spend until it costs you more than you make but only then should you stop. I've seen two advisors do workshops on the same day within the same hotel...one had 95 people show up...the other 14 people. Doing a good workshop doesn't help if you can't get the people there. So what did the guy do that got 95 people to the workshop? If you want to know, post a comment and tell me so!