How good is your marketing? Many advisers believe they are doing great marketing because they are consistently getting new clients. In many cases, though, they are actually poor marketers. What they are good at is selling.
What's the difference, as long as new clients keep coming on board? Relying on selling (and having a weak marketing plan) makes you work harder and exposes you to long-term risks that reduce the value of your business.
Here are a couple quick ways to tell whether you have this problem:
I knew one particularly gifted business development officer who worked for a financial advisory firm. If he got in front of someone there was a very good chance that person was going to become a client of the firm. But that was exactly the problem. It limited the firm in a couple significant ways.
Selling happens one-on-one. When this guy was on vacation, no new people were being introduced to the firm. He wasn't scalable.
Selling is persuasion. This business development officer had a real gift for connecting with people and getting them interested in what the firm had to offer. The problem was that he would tailor the message to whatever that client responded to. There was no overriding and consistent message. Ask five or 10 of the clients he brought in what was special about that company and you would get four or five different answers. It's really hard to build a brand when that's the case.
I see a lot of this in the advisor business. As long as revenue and profit goals are being met, most advisors never question the efficacy of their marketing. But there is very little marketing going on. I call it the Triumph of Selling.
There are even bigger implications on succession planning. I used to work at a firm where two of the founding partners were the rainmakers. That's pretty common. They sold the firm to a larger financial institution. The flow of new clients decreased to a trickle. A smart buyer would do some due diligence into where new clients come from. If they find out that every new client is the result of you going out and getting them, and your retirement would mean a serious decline in the rate of the firm's revenue growth, that's going to take a serious bite out of the value of your business.
Marketing and selling are both important to the health of a business. You cannot succeed without selling. Marketing sets the stage for selling. Marketing can build a brand and a reputation that gets people interested in having the selling conversation. Marketing is one to many. Marketing continues to work when you go away for the weekend. Effective marketing means that you can walk away from the business and the clients will continue to arrive.
Here are a few ways you can recognize a professional marketing effort:
How do clients find your firm? What steps do you have in your marketing plan to establish and project your brand? You have a marketing plan, right?
Make sure there is some marketing along with the selling in your client acquisition strategy. You will be able to work less, and your business will be worth more.