That is the question. You may not need a marketing department at all if your business is cruising along at a good pace and you’re happy with your success. Even if you are trying to grow, you can still choose to outsource rather than hire. The question is, which direction is right for you?
This is an important question. So I’m going to answer it in two posts, starting here with Part I, and following with Part II next week.
Why internal marketing departments fail.
To begin with, I want to address why it’s so important for advisors to stop and think before hiring their first marketing person—because we’ve all seen what happens when they don’t. Some advisors simply put a warm body in a marketing role, then assume all their problems are solved. Twelve months later, of course, the new marketing hire doesn’t work out because “she didn’t deliver.” Of course she didn’t deliver. That’s because she was expected to develop strategy, write, animate, design, use Adobe® Creative Suite, do PR, lay out slides, edit podcasts, create infographics, organize events and shoot video. Maybe writing a jingle was in there somewhere. Marketing doesn’t work that way. No single person performs all of those jobs. Unless the advisor can come up with a better definition of the role, no one will last in that position.
There’s a secret to doing it right—and you already know it.
Many marketing hires are doomed from the start, because they didn’t start in the right place. As I said in my post on marketing interns, remember what you tell your clients every day about their financial plan: The first thing you need to do is define your goals clearly. Only then can you develop a strategy to reach them.
The same is true when you hire marketing professionals. If you want them to succeed, you have to clearly define the problem you want them to solve. For example, imagine you have terrible client retention. That problem calls for a re-engagement or recapture strategy, focused on identifying at-risk clients, measuring satisfaction, boosting engagement, and so on. On the other hand, say your retention is high, but you’ve hit a ceiling with client acquisition. That calls for a different strategy—and a completely different role for a marketing professional. Define your needs first, then find someone to address them.
A little help to get you started
If you’re about to hire a marketing team, here’s a short homework assignment to help you define their roles better. Start by addressing some basic questions about your business:
- Why are you thinking about marketing?
- Who is your target market? What are their demographics?
- What are their pain points?
- What are your specific goals for lead generation, asset acquisition, retention, etc.?
- What’s your budget?
- What is your history of success or failure in reaching your target?
- What resources are available?
The answers will help you in so many ways. You’ll be better able to understand what you’re looking for, choose between in-house and outsourced support, and define a marketing role in a way that sets realistic expectations for both sides. Now, I’m going to offer a few specific staffing suggestions.
Why a warm body isn’t enough
Let’s start by clearing up a common misperception. Adding headcount shouldn’t be a marketing budget buster. Salaries represent only a portion of your marketing spend. You can spend $60K a year on a marketing coordinator, $100K+ on a marketing director, or even more for a chief marketing officer (CMO). While those figures represent a lot of money, they cover only human capital—just a single line item in your overall marketing budget. If that’s all you have to spend, your new hire will show up on her first day and discover she doesn’t have any of the resources she needs to do her job—not even simple things like CRM, a marketing library, email marketing vendor, or access to a great copywriter. Her chances for success are slim. She needs help!
Think of marketing like technology
The notion that one marketing person can “do it all” is very ingrained in advisor culture. To explain why it’s wrong, an analogy might help. Think about IT. Advisors understand they need IT support to stay in business, and they realize it can be very expensive. Yet no one tries to hire one computer guy to set up the printer and develop an order management system from scratch. You rely on outside vendors to provide most of the tools you need, and let your internal staff coordinate everything. That’s how marketing works, too.
Signs that it’s time to start hiring
Now, on to my suggestions. Please remember, these are just illustrations. To provide you with actionable advice, I would have to understand your business plan, see your growth strategy for the next 3 to 5 years, and learn a great deal about your business. But in general:
- Below $500 million AUM: You don’t need dedicated marketing staff. Outsource to an agency or freelancers with specialized expertise in serving advisors.
- Multi-billion AUM: Start laying the groundwork for future growth and a more robust marketing function. Hire a great marketing administrator—a hard-charging go-getter willing to learn your business and become indoctrinated into your culture. Then hire an outside agency to handle execution while your internal person coordinates all the spinning wheels. Please remember, when you hire an administrator, you’re not getting a CMO. Look to your outside agency experts to provide strategic direction while they also help your administrator grow into a more strategic role over time.
- $5+ billion AUM: You’re ready to hire director-level marketing support—someone who can deeply understand your target market and develop a strategy to reach it. A marketing director also needs the freedom, flexibility and especially the budget to execute on a marketing plan, as well as the ability to hire additional internal staff and outsourcing providers.
Of course, these are just general guidelines. Each advisor business is unique. Let your goals dictate your strategy, and let your strategy determine the kind of people you hire.