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Exponential (Adjective): rising or expanding at a steady, rapid rate.
From my perspective, there are four primary ways financial advisors can create exponential client growth.
1. Acquire another advisor’s practice..
This is often an expensive and risky endeavor. The cost of acquiring these new clients is high and there’s no guarantee they will transfer. When advisors make a big change in their practice and/or clients are moved to another firm, many previously complacent clients take this opportunity to move to another advisor.
2. Put in place an extensive digital marketing campaign.
Some advisors have cracked the code to this strategy – though their cost per opportunity can often be quite high. Other advisors have thrown good money after bad trying to make this work for them.
3. Employ a continuous flow of seminars and educational events.
I’ve interviewed and coached some advisors who have done well with seminars. With that said, I distinctly remember an advisor who decided to attend one of my boot camps because he took a close look at his practice and discovered that while his seminars produced a decent flow of clients, almost all of those clients were B-level clients. Almost every one of his A-level clients came from a referral from an existing client or center of influence. He was attending the boot camp so he could remove the high cost of client acquisition through seminars and focus on meeting A-level clients through referrals.
4. Multiply your best clients through relationship marketing.
The cost per opportunity is very low with relationship marketing and, if used properly, will yield only Right-Fit Clients™ for your practice.
For 3 of these strategies, the cost per opportunity can get quite high. For one of them, the cost per opportunity approaches zero dollars. Guess which one that is?
The Race to Digitize
There is no question that the digitization of client acquisition is playing an increasing role in how advisors find new clients. The research that I’ve seen points to the fact that while online / social media activity can play a role in helping clients find and determine the right advisor for them, word of mouth, recommendations, referrals, and introductions are still important factors in the process.
May I suggest that at a time when many advisors are racing to digitize their client acquisition efforts – with mixed results – one could make the case that the best approach is to humanize your efforts to acquire more ideal clients.
Let’s take LinkedIn, for example. While there are a few exceptions, the people making the most money with LinkedIn are the folks trying to sell you their system for making money with LinkedIn.
The bottom line is this… study after study after study consistently finds that the majority of clients that successful advisors want to attract – prefer to meet their advisor through a recommendation from someone they already trust, who has a relevant and compelling way to communicate his/her value and has built a solid reputation for themselves.
Doesn’t it make sense for you to grow your business – meet your ideal clients – in the way that they want to meet you?
The 3 Rs of Relationship Marketing
Integrating Radical Relevance, Reputation, and Referrals for Financial Advisors
I believe that effective client acquisition uses a blend of attraction marketing and proactive prospecting. And the better you get at attracting just the right prospects to you, the less actual prospecting you’ll have to do.
The synergy between Radical Relevance, Reputation Marketing, and leveraging Referrals to multiply your best clients presents a powerful dynamic for financial advisors to reach and resonate with their ideal clientele. This report delves into how these strategies interconnect, reinforce each other, and collectively contribute to the overarching goal of client acquisition, specifically targeting the acquisition of more ideal clients for your financial practice.
Radical Relevance: The Foundation
Radical Relevance is about crafting and communicating a value proposition that is directly aligned with the specific needs, concerns, and aspirations of your target market. For financial advisors, this means:
- Identifying a Clear Target Market: Narrowing your focus to a specific demographic or niche (e.g., retirees, high-net-worth individuals, professionals in transition) enables advisors to tailor their messaging and services to the unique needs of that group.
- Communicating Value: Developing messaging that speaks directly to the pain points, desires, and financial goals of your target market. This relevance in communication ensures that potential clients see the advisor’s services as not only beneficial, but essential
Reputation Marketing: Building Trust and Credibility
Establishing a reputation within a well-defined target market amplifies the effectiveness of Radical Relevance. By establishing oneself as a trusted authority in a specific niche, financial advisors can:
- Enhance Visibility and Recognition: Being recognized as an expert in a particular field or demographic increases the likelihood of being sought out by potential clients within that niche.
- Facilitate Stronger Relationships: Trust and credibility lead to deeper, more meaningful client relationships, which are critical for understanding clients’ evolving needs and for providing personalized advice.
- You Bring More Tangible Value: Because you know their world better than a generalist, you bring both more perceived and tangible value. This creates stronger loyalty, and you become super referable.
- Referrals Are Easier to Obtain: When your clients see that you are focusing on others like them, they get clear on who you’d like to meet, and you begin to get more unsolicited recommendations and referrals.
Referrals: The Compounding Effect
Referrals are the natural outcome of creating highly engaged relationships with your clients. They appreciate the value you continue to bring them, and they appreciate the personal connection they’ve made with you. Satisfied clients are loyal. Engaged clients provide referrals and introductions to their friends, family, and colleagues.
Consider the following statistics:
- Clients from referrals have 3 to 5 times higher conversion rates. (Source: McKinsey)
- Firms with referral programs experience an 86% higher revenue growth rate. (Source: Harvard Business Review
- Referral marketing can lead to a 37% higher client retention rate. (Source: Deloitte)
- 92% of clients trust recommendations from friends and family over any other form of promotion. (Source: Nielsen)
This strategy of Relationship Marketing is bolstered by:
- Leveraging Advocacy: Encouraging satisfied clients to share their positive experiences with others naturally extends the advisor’s reach into the target market. This is a service you provide to your clients. You are “never too busy to see if you can be a resource for others.” You are giving your clients a chance to “pay your value forward” because you truly believe in your value.
- Creating a Referral Culture: Encouraging introductions, asking for introductions in the right way, and receiving them properly work to create a culture of recommendations and introductions. While this is mostly about bringing your value to others, many clients will also want to contribute to your success. Tapping into your clients’ desire to bring your value to others and contribute to your success at the same time is a powerful dynamic.
Synergy: How These Strategies Interconnect
- Target Market Clarity Enhances Relevance and Referrals: By focusing on a specific target market, advisors can craft more relevant and compelling messages. This clarity not only attracts the right clients but also makes it easier for existing clients to identify potential referrals within their networks who would benefit from the advisor’s expertise.
- Reputation Strengthens Relevance and Referral Quality: A strong reputation in a niche market reinforces the advisor’s value proposition, making their services more appealing to potential clients. Additionally, a reputable advisor is more likely to receive high-quality referrals from clients and centers of influence within the target market.
- Referrals Validate Reputation and Relevance: Successful referrals act as a testament to the advisor’s relevance and reputation. Each referral serves as a proof point that the advisor’s services are valuable, effective, and appreciated by clients, thereby attracting more ideal clients.
Benefits of Integrating These Strategies
- Accelerated Client Acquisition: The combined effect of these strategies is a more efficient and effective client acquisition process, attracting clients who are a perfect fit for the advisor’s services.
- Enhanced Client Satisfaction & Engagement: By focusing on clients within a specific niche, advisors can provide more personalized, relevant advice, leading to higher client satisfaction and loyalty.
- Increased Business Growth: A strong reputation and a steady stream of high-quality referrals contribute to sustainable business growth, allowing advisors to focus on serving their clients rather than constantly seeking new ones.
Conclusion
For financial advisors facing challenges in client acquisition, integrating The 3 R’s of Relationship marketing into their playbook offers a comprehensive approach to not only overcome these challenges, but to thrive.
By focusing on a specific target market, establishing a strong reputation within that niche, and leveraging engaged clients for referrals, advisors can significantly enhance their client acquisition efforts, ensuring a steady influx of ideal clients and sustainable business growth – without increasing the marketing budget.