How much do you spend on your marketing? How much should you be spending? Or perhaps I should ask how much should you be investing in marketing, as you should always view your marketing budget as an investment rather than a cost.
We have done quite a lot of research on this, and the general consensus is that an absolute bare minimum should be 5% to 7% of turnover. But that is only if you are not in a competitive market and do not wish to grow your business. Around 6% may be just enough for you to keep your head above water and hopefully not drown, but it is unlikely to be enough for your practice to grow.
To be honest, that 6% does not really apply in our profession. We are in a competitive business whether we like to think so or not – especially as more and more prospective clients wrongly believe they can get all the financial help they need by going online.
In a competitive market it is generally accepted that you need to invest at least 20% of your turnover in marketing. Again, that is just to keep your head above water. A few years ago I met financial advisers who spent less than this and were maintaining their income, but things are changing rapidly, and now many of these advisers are finding their practices are shrinking. Quite a few are no longer in business.
The recommended investment in marketing if you are trying to grow your business in a competitive market is 50% of turnover. That may seem a daunting figure, but you have to invest if you want to grow, and most of that investment should be in your marketing.
The next question is where should you focus your marketing investment?
Many small businesses use their entire marketing budget in advertising. But is that wise? I do not believe it is ever a good thing to rely 100% on just one method of marketing, and that is especially the case with advertising.
Marketing is not about advertising or direct mail even though both of these may be useful strands in a marketing strategy. It is about gaining and keeping clients. With advertising, you have no idea how many prospective clients will read the ad, let alone respond. Yes, the publication will tell you its circulation, but there is a big difference between the number of people reading a magazine and the number who read and respond to the ads in that magazine. How many ads did you read and respond to in the last magazine you read? Let me guess – probably none! It is entirely possible to pour a lot of money into advertising and not acquire a single new client from this investment.
Over the next few months we will be sharing with you some ideas about retaining good clients. But how do you gain them in the first place?
One very good way is to get someone to find potential clients for you – prospects who are willing to meet with you and find out what you have to offer them. This is exactly what Adviser Breakthrough Appointments can do for you. We trawl through all the company directors and business owners in your area, suffering all the rejection from the majority who are not interested in meeting a financial adviser, and find the ones who are open minded enough to agree to a meeting. These are the prospective clients you should be meeting.
A diary filled with new prospective clients. Sounds like a dream doesn’t it! And certainly a much better way of lining up new business than placing an advertisement and waiting (a very long time!) for prospective clients to call you. Invest in this method of marketing and you should be able to keep your marketing budget a lot lower than received wisdom says it should be, yet still grow your practice in this increasingly competitive market.
Call us now on 023 8089 2222 and ask for Sarah or Gilly, who will give you more information on how you can make this marketing method work for you. Or e-mail us at firstname.lastname@example.org.