When you look into your client book you know which ones are your best clients. Shouldn’t your roster be full of people you love to work with—and who love receiving your advisory expertise? Golden leads of highly-qualified prospects who will respond to your financial guidance are out there, but what can you do to find them?
Reese Harper’s guest on this episode of the Elementality podcast is Paul Thompson, founder of Advisor Accelerator. A digital marketing master, Paul says most advisors are stuck in the 1980’s when it comes to prospecting. He shares his ideas on how you can bring your marketing strategies into the 21st century which will improve the quality of your leads. Learn how you can build a book of clients who you love and who respond to your advisory expertise.
Show Notes
https://adviseraccelerator.com/
Podcast Transcript
Paul Thompson:
Well, to be honest with you, the people who are grabbing the bull by the horns in the industry are very clear about who they serve, if you understand what I mean. And the ones who are ebbing and flowing with the tide, a bit of feast and famine, can’t really get my lead generation working, trying six different channels, figuring out how to put a chatbot on their website or something like that. Those guys, they need a little bit more clarity.
Abby Morton:
Welcome to Elementality. I am Abby Morton, CFP and producer of our podcast here at elements. I love being a financial planner. But I know it’s a challenging profession as well. That’s why the number one goal of our show is to help you prosper as an advisor as you better connect with your clients. We know your time is very valuable, plan on a good return when you spend it here with us.
Reese Harper:
Welcome to another episode of Elementality everybody, I’m your host, Reese Harper, and excited today to join a new guest to the podcast, we’ve never had Paul Thompson of Adviser Accelerator. Paul, welcome to the show.
Paul Thompson:
Hi Reese, thanks for having me.
Reese Harper:
Paul, I’ve had a few people who I trust tell me, “Paul really would be a great guest for your show.” Travis Perry, I think introduced us first and I really was intrigued at both your experience as a consultant to financial advisors and the advisor accelerator program where you’re really focused on marketing and lead gen and helping advisors understand how to grow their practices. So, really a perfect guest for the type of topics that we’d like to cover here. How about you start by telling us just a little bit of your background and how you got into working with financial advisors?
Paul Thompson:
Sure. People always ask me, the first question is generally, “Are you a financial advisor?” Is often their first question. My answer is always no, I’m not a qualified financial advisor. My background is actually in marketing and direct sales, I’ve been involved in scaling a number of different companies over the last 20 years in both Australia and here in Ireland, where I’m physically based. So it’s always been, I suppose, around marketing, attracting the top quality clients and so on.
Paul Thompson:
I suppose I cut my teeth in online marketing, and scaling a number of online businesses, particularly in the golf sector, but I launched a digital agency in 2015. At that time, we were probably working relatively broadly, we weren’t specialized in a particular niche, we were working in a couple of different areas and helping different businesses to scale using online marketing. We started working with a number of different advisors. It was interesting. While I enjoyed working with advisors, I always find it interesting that they were so highly qualified in relation to financial advice and how to do it. And obviously, it’s a regulated industry, but that didn’t get a lot of training around marketing and lead generation actually, running a business.
Paul Thompson:
I could never understand that, it just seemed odd to me, because a lot of advisors are self employed and responsible for generating their own leads and building their own books, but they don’t seem to get a lot of support. In fact, a lot of the bigger networks and the bigger broker dealers seem to give them some fairly basic advice, like, “Go and talk to your friends and family, maybe do a little bit of cold calling, maybe try networking with your current network.” Which is fine, but it’s very basic marketing advice to help someone get started. So I could never understand why the industry was relying on what I would call 1980s marketing tactics when there was a better way to do it.
Paul Thompson:
So we started working with a number of advisors and helping them to scale their practice. And we very quickly got some great results for them. Then we started to scale that and lean into that little bit more. To the point, 12 months later, we were exclusively working with advisors, planners, and wealth managers based all around the world. So, now we will only work with advisors, planners, and wealth managers. So we really understand what it means to be a regulated business, and we understand the subtlety of keeping the compliance department happy and all of that while still attracting the right type of leads that you can actually on board with good ROI into your practice, which is obviously what you’re really looking for.
Reese Harper:
So I wanted to ask you, you said advisors, planners and wealth managers, were you using those words in just a way to identify the whole group or do you see those as different people in your marketing on your end?
Paul Thompson:
It’s a good question. I do and I don’t because the needs behind them in terms of I want a high value prospect with the right level of assets with particular financial needs. Yes, they do slightly different things, but their marketing and lead generation need is quite similar.
Reese Harper:
Similar, yeah. How would you think of their career paths differently? Were you even thinking of them differently when you threw those out there? I just thought that was interesting.
Paul Thompson:
Well, we weren’t thinking differently, bear in mind, we work all around the world, and these terms can mean different things [crosstalk 00:05:14]
Reese Harper:
Yeah, that sounds good to say like, if you’re in New Zealand, it’s going to be a different term than if you’re in the U.S. Right?
Paul Thompson:
Correct. So if you just use the word financial advisor, you lose a certain number of people, if you just use the word like … If you said, “Okay, somebody has to be a CFP.” Again, that’s fine. But again, there’s other subtleties to it as well. So, I suppose that allows us to deal with the broader need for financial advisory practices, if you want to call them that [crosstalk 00:05:42] leads and marketing.
Reese Harper:
Interesting. Okay. If you were to dive into … If I said, what do you think the most common thing advisors are doing right now to just get new clients, what is that thing that they’re doing, the most common thing?
Paul Thompson:
Well, I mean, the basics of … I mean, look, everybody wants to rely on referrals, right, so they want good quality clients, they already have to refer other good quality clients to grow their business. That’s fine. But that presupposes that you already have a good quality book, that you’ve already been quite discerning about the type of book that you’ve built. So if you’re in the earlier stages of your career building your book, that doesn’t really work. It doesn’t really work, if you’re at a particular point of building your book, and you’ve got some good momentum, fantastic.
Paul Thompson:
The other thing I see that happens a lot, though, is people build their book and fits and starts, they accept clients that they probably shouldn’t accept, that maybe don’t have the assets that they should or in the wrong sector or in the wrong industry, they don’t even necessarily like working with those types of clients, but maybe they need to drive or grow their revenue, and therefore, aren’t as discerning as they should be. That creates problems in your book, and it creates problems in your potential referrals, and it doesn’t allow you to grow the type of book that you actually want.
Reese Harper:
Because I see tons of consultants out there beating the referral based marketing drum, and I know it’s got some precedent that works, I don’t know a lot of advisors who are … When they say, I’m getting referrals, I usually see them getting like eight to 10 a year or something, it’s not like they’re growing 100 clients a year through referrals.
Paul Thompson:
Well, it’s the lack of predictability, which makes the growth of your book difficult. So if you don’t know how many referrals you’re saving in a month or in a year, it makes hard to predict, you can’t predict how much recruiting you need to do, you can’t predict where your revenue is going to be at, that’s a huge problem for most advisors, whether they like it or not. It’s lovely to be able to rely on referrals if you’ve got a good volume coming in, and you can be choosy about the referrals that you take on. That’s not what happens, depending on where you’re at in the growth of your book.
Paul Thompson:
For example, I see advisors, and they have an established relationship with the CPA or an accountant, and that’s fine. And you can refer them a certain volume of business. But sometimes the problem then becomes, they feel the need to have to take on the referred client that they get from the accountant to maintain the relationship with the accountant, even if the fit with that particular prospect isn’t that good with the book and what they’re actually trying to build. When I see that, that really grates on me, when I see that. It just seems counterintuitive and counterproductive.
Paul Thompson:
But what we absolutely see is the larger networks, the larger broker dealers, even with new advisors to this day in 2021, still saying to people coming into the industry, go and leverage your current network, your friends and family and get started that way, and equally cold calling is still valid. Now back when you started in 2003, in fairness, internet and social media wasn’t half as prevalent as it is these days. That’s pre-Facebook. A lot of the channels that existed, and they didn’t even exist back then. So I think it was probably a more realistic thing to ask you to do in 2003.
Paul Thompson:
But in 2021, I’m thinking, “Come on, there are better ways to reach people.” This is just about reaching people, you just need to put your message in front of them. For example, there’s some markets and we obviously work all over the world, like in the UK, cold calling is bad, you cannot cold call in relation to pensions and so on in the UK, it’s bad. Whereas in the U.S. it’s a little bit more open. In my mind, it’s not the best way to go about growing your practice. As an advisor, and particularly a new advisor, involves a lot of manual labor like shoe leather here, this can make it very disparaging and you can almost lose your momentum and your motivation in the first six to 12 months before you can get started.
Reese Harper:
So talk to me about … like if you were going to sit down and analyze the health of an overall marketing strategy, where would you be starting with a financial advisor? Give me some questions that you’d ask, and kind of the things you’re looking for to establish.
Paul Thompson:
Well, for me, there’s a few key things about any marketing, regardless of the channel that you actually go after, and my favorite channel is LinkedIn. We can talk more about that in a few minutes. But for me, it’s about what is the message that you’re actually putting out to the market? What is your positioning? The problem we see a lot is 95% of advisors, their marketing message or marketing strategy is, if you have a pulse on some form of a financial need, I will deal with you. That’s their strategy. 95% of cases, regardless of whether they’re very experienced or not, that’s their approach.
Paul Thompson:
And whether that’s because they haven’t really been trained how to do it better, or whether because that’s the default, and just what they’ve gone with. It’s hard to tell. But that’s what we see a lot. So the first step for me is going to be, “All right, well, who is your ideal client? Who have you had good success with in the past?” If you look at your current book, let’s say you have 50 or 100 clients, do you have any clusters of people within that, one have been profitable for you, two that you like dealing with, and three that have some commonalities? So if you’ve had great success with say dentist, for example, like 10 dentists with a great success, you really like working with dentists. Well, then you should start leaning into dentists, for example.
Paul Thompson:
Or could it be a particular industry, senior pharmaceutical executives. There’s many number of ways to cut the cloth, but we need to narrow down who you’re trying to speak to. When we can narrow down who you’re trying to speak to, then we can start putting the message together, that would actually resonate with that audience. So rather than a vague message, “Hello, I’m a financial advisor, if you have a financial need, come and talk to me.” That’s super vague, much better would be, “Hello, I’m a financial advisor, I work with dentists in the Florida area, if you’re a dentist with financial needs come and talk to me.” That’s already a better message.
Reese Harper:
Yeah.
Paul Thompson:
Just by being more specific and tailoring the message to the audience you’re trying to speak to.
Reese Harper:
So the first thing to do is just really clarify who your audience is, and don’t be so vague about that. That’s probably akin to this direction of like, pick a niche, define your target. A lot of advisors, I think, understand that, where they need to go, but they struggle, I think, to really pick that and own that and define that. When I started this software startup, we get these intake forms from every demo, that books and we ask, “Who’s your customer focus?” And probably like 90% of the people that are submitting demo requests, say, “I don’t have on target market, or I don’t have a niche focus, I’m a general practice.”
Reese Harper:
Why do you think that exists, if everyone knows the economics or resoundingly clear that a target audience is going to serve you better, marketing is significantly easier, referral-based marketing is easier, your planning efficiencies are easier, all of the things about running an efficient financial advisory firm are better when you pick an audience, why do people like not do that? And still to this day, 90% of advisors are still generalists. I’m surprised how many people wait so long and never really define their audience. Why do you think that’s the case?
Paul Thompson:
For me it’s a fear thing. So the thing I hear and we talk to advisors and planners all over the world, the thing that I hear more often than not is, “Okay, so if I specialize in say, dentists, for example, doesn’t that mean I’m going to exclude a certain amount of people or a certain amount of inquiries that I receive and turn a certain amount of people away?” So they assume they’re going to write less business because they’ve got a clear message for a specific audience. Whereas actually, the opposite is true. When they niche down and they’re clear about their messaging, they write more business, because, yes, they turn a certain amount of people away, but the people that they do connect with their message resonates much more strongly, and therefore they get more conversion. But sometimes it’s difficult to get that message through to advisors to be honest with you [crosstalk 00:14:25]
Reese Harper:
There’s definitely a fear there. I think some of it for me when I was first picking is, I have my initial clientele of, who knows, 10, 20 clients, 30 clients, I’ve worked really hard to get, and I might only have one or two that are in this target audience, and the fear is also like I don’t want to alienate my current clients that are making up the bulk of my current revenue. If it was just like I was starting from scratch and I didn’t have any clients, I think it might be a little bit easier to pick a target market. But when you already have clients, I think advisors are also fearful that they’re going to alienate their current clientele, not just the new prospects. Do you see that?
Paul Thompson:
I do. And I see advisors saying that to me on a regular basis. My response to that is generally that, when you have a current client, for example, they don’t spend an enormous amount of time checking your LinkedIn profile, let me put it to you that way. Why would they need to? They’re already connected, because if they need some, they’re going to email you or call you. So, the subtlety of what your email profile says or the piece of content you put out last week, it doesn’t tend to make a huge amount of difference.
Paul Thompson:
In fact, I’ve seen people, for example, focus on niche number one, for example, for a six month period, and possibly even max out that niche, and then move on to niche number two, without missing a beat, and without alienating people either. So, it’s the fear that holds people back. If you actually get up and get on with it, you’ll find that it doesn’t actually have much impact day to day.
Reese Harper:
That’s interesting. I felt a lot of fear around that, but I think, to your point, when we rebranded from our generic brand, because when we first started, we weren’t dentist advisors, we were just a generic wealth management brand. And then when I became dentists advisor, I kept the old email address and the new email address and I was worried like, “I don’t want to email my non dentist with the dentist advisor’s email.” After a while I just stopped caring, and I just started emailing them with the dentist’s advisors email, even though they’re a lawyer or they’re a doctor, they’re not a dentist. I thought they would be offended. And after a while, the relationship was always with me the whole time. Right? It didn’t have anything to do with my branding.
Paul Thompson:
[crosstalk 00:17:07] Don’t care, don’t care. Obviously, everybody assumes they do. I actually put out a video yesterday, which was all about, should you run your practice the way other people expect you to, and that was exactly the point, it was like, “People don’t care, they don’t pay as much attention to you in what you’re doing as you think they do, they’re more worried about the six inches in front of their face.” Let’s be honest.
Reese Harper:
Everyone is, and we’re all worried about our own thing. I think if advisors can get that concept through, maybe I’m just highlighting that, because I do think advisors are worried who they’re going to turn away as part of this niching strategy, I do think that’s part of it. I think sometimes the bigger part is they just don’t want to offend their current clientele and have them leave them. I felt that for a while, I was like, they’re going to all leave me, they’re going to all leave me. Once I picked dentist, all my existing first 30 or 40 clients, which was whole base of revenue. Right? They’re going to get frustrated, and they’re going to leave. I found out very quickly that that fear was … it wasn’t valid.
Paul Thompson:
Didn’t happen. Let me give you the example, we worked with a female advisor and her particular speciality was working with divorcee women, and she was a divorcee woman herself. She understood the problems and challenges of divorcee women intimately. She would literally turn men away at the door, she had no interest in dealing with men. But if you’re divorcee woman within 30 or 40 miles of her location, then she was absolutely the advisor for you. So her message to the market was super clear. “If you’re divorcee woman and you’ve got some foreign financial challenges, I’m your advisor.” Right? That was her message to the market. Super clear.
Paul Thompson:
As you can imagine the divorcee women themselves, they loved her, they loved that she really understood their problems and challenges. They referred all their divorcee women friends to her, her whole practice was thriving off the clarity of this one line that she put out to the marketplace. I loved the clarity of it. And ironically, the marketplace and obviously people within that niche, loved it as well.
Reese Harper:
I just think financial advice is just really nascent, it’s really early stage where it’s just new. So we don’t have these specializations developed yet, but it will over time like the legal industry, the medical industry, and even marketing. I mean, a lot of industries have matured to the point where they only really focus on these narrow groups of advice. I just feel like that’s not really yet happening in wealth management. I mean, it is, but to a much smaller degree.
Paul Thompson:
Well, to be honest with you, the people who are grabbing the bull by the horns in the industry are very clear about who they serve, if you understand what I mean. And the ones who are ebbing and flowing with the tide, a bit of feast and famine, can’t really get my lead generation working, trying six different channels, figuring out how to put a chatbot on their website or something like that, those guys, they need a little bit more clarity. As you said to me at the beginning, what’s the first thing people should do with their marketing, have a clear message and put that clear message in front of a specific group of people. That’s marketing in a nutshell really.
Reese Harper:
So if we were to say, okay, that’s concept number one, let’s talk about what next steps are involved in rolling out a good marketing campaign. Once we establish our message, what other areas are we looking at?
Paul Thompson:
There’s already two things, establishing the message is one, but we need to make sure there’s a consistency of that message as well. Again, something that I see a lot with advisors is, their website says one thing, and their LinkedIn profile says another thing, and they put out a piece of content recently, which says a third thing. And when someone gets on the phone with them, they say something else. What that does is, as you know, provides a certain amount of confusion, essentially to the prospect around who you are, what you stand for, and what you could potentially do for them. In marketing terms, we call that friction.
Paul Thompson:
So anytime there’s a piece of friction within the process, you lose people. They start to go, “Hmm, it sounds good, don’t really like your prices, or I’m going to think about it for a little while.” Or, “Hmm, I’m going to talk to four more advisors et cetera.” In other words, you don’t really get that commitment because your message didn’t cut through the noise for them if you’d like. So what we want to see is, we want to see that your website says one thing and your LinkedIn profile says a similar thing, and your content that you’re putting out also says a similar thing, when they get on the phone, they hear the same thing again. That gives that nice flow to your message, nice reinforcement to it. And now you’re starting to position yourself as an expert.
Paul Thompson:
And that’s really the key, like it’s one thing to say yes, my messages, I go after dentist, but you need to actually show the dentist that you understand their problems and challenges. Okay? Now, a lot of advisors from a marketing point of view, they will lead with the products, though they’ll lead with I can do this with product[crosstalk 00:22:10]
Reese Harper:
[crosstalk 00:22:10]
Paul Thompson:
Yeah, whatever it is, they lead with the product, whereas your average prospect couldn’t care less about what products you bring to the table. In fact, most of the time, they don’t even understand the different products that you’re proposing anyway. Okay? All they really care about is does he understand me? Does he get my problems and challenges? So, I want your website, your profile, your content, and when they get in the phone, I want that to really demonstrate you understand the problems and challenges. What it’s going to do is allow you to essentially earn the right to talk about the solutions, products or whatever else that you actually bring to the table. But that’s not how most advisors speak. They lead with solutions and products and hope they can get a fit, whereas it should be the other way wrap.
Abby Morton:
I know one of your biggest challenges is delivering a consistent financial planning experience to your clients on an ongoing basis, you get off to a good start onboarding a client and then what? There just doesn’t seem to be a good process for nurturing the new relationship. The Elements Financial Planning System can help you easily organize and evaluate client financial data, then based on key indicators of their financial health, deliver timely insights to your clients. Using our system gives you the structure you need for ongoing planning. To learn more, schedule a time to talk to us today by going to getelements.com/meet.
Reese Harper:
So, once we have established our message, and we have consistency across all of the public facing campaigns that we’re running, whether it’s a phone call, or whether it’s our email, or LinkedIn or our social profiles, what kind of demand gen strategy do you think is … What’s the mix look like for most advisors? Or what do you test, right? What are the different types of things you’d want to test as a marketer?
Paul Thompson:
There’s a lot of channels out there as you know, and to be honest with you, these days it’s almost so noisy that it’s overwhelming. Most advisors are not marketers, they didn’t get into the industry to become marketers. I’ve heard you talk about that before yourselves on the podcast. And it’s the truth, they’re very well qualified in financial advice, they didn’t connect to the industry to be expert at online marketing, and that’s fine.
Paul Thompson:
The best thing you can do is pick one channel and really make it work well, double down on it. Once it’s working well, you can look at other channels. And we’ve tested this extensively. Okay? We’ve tried every channel available online to drive high value leads that give good ROI. The difference here is high value. Anybody can drive crap leads with low asset value that give you volume and don’t convert or just waste your time. Anybody can do that. Okay? What you want is a high value lead that actually is switched on to you and you’re offering that you can convert into a long term paying client, which is obviously what it’s all about.
Paul Thompson:
So, the channel that we found after extensive testing works the best for ROI and high value client is LinkedIn. It’s not to say that they have the most people on there, they don’t. I mean, the likes of Facebook, Instagram and so on, they have whatever it is, 2 billion plus people, the numbers are ridiculous, you’ve got TikTok these days, Clubhouse, any number of different channels, but we just found that people go on LinkedIn with a different kind of hat on their head, they go on there generally, if they’re a business owner, for example, they might be recruiting, they might be networking prospects and clients, they might be reading business articles, or whatever it is, there’s a more serious kind of hat on their head.
Paul Thompson:
Like Facebook people tend to be watching cat videos or chatting with their friends or looking at baby pictures, which people don’t really do on LinkedIn, if you understand what I mean. So, we found that it tends to make them much more open to a financial services related conversation on LinkedIn, rather than on Facebook and someone’s chatting with their friends. And suddenly, you’re trying to talk to them about 401Ks and they’re like, “What are you talking about?” I’m talking to my friend about what we did last Saturday night. You kind of got to meet people where they’re at, and we just found the ROI for financial service and financial advisory businesses out of LinkedIn was four or five times better than all the other channels, easily.
Reese Harper:
How do you estimate the effect? Well, two questions about this. One, LinkedIn, over the last six months to a year has really shifted, for me. This is just my experience on LinkedIn, is I feel, and maybe it’s just because I’m a target, right, I’m a CEO, and I get targeted, but I feel like it’s an absolute cluster on there of just spam. It’s like every day I’m getting spam like 50 times. Initially over the last year, I see these people that I think are people that I want to be in my network with, the next thing I know I’m like, “I’ve accepted a bunch of sales people on accident.” And then I start getting like, “Oh, geez.” Like every time I click accept to somebody, they start spamming me. So now I’m not going to accept anybody.
Reese Harper:
I’m just curious how that is evolving in your view. To me it feels like the platform is still very relevant. It does. I just feel like, in my own experience, I feel like the culture on there is shifting to something that feels different than what I remember from a year ago. What’s been your experience with that?
Paul Thompson:
LinkedIn has evolved and changed a lot. I think I originally joined LinkedIn, I think it was about 2008, which is kind of 13 years, I think they only really came into existence around ’06, ’07. It’s changed massively, back then it was very much a recruiting site, it was put up your CV, maybe your job, et cetera. It went like that and operated like that very much till about 2015, even 2016. Okay? These days, they’re owned by Microsoft. Okay? So they got some serious muscle behind them. Okay? But it’s also evolved into less. Yes, there’s still a certain amount of recruitment that happens on there, and that’s fine. That’s probably one of their main ways of driving revenue, but they would also see themselves as the professional network, if you understand what I mean.
Paul Thompson:
Whether you’re in sales, or whether you run a business, or whatever you happen to be doing, you do need to network with prospects, and you do need to network with clients, and you do need to read business articles, and you do need to attend webinars and be part of that community. So, that aspect of it, they’re doing quite well. Now, do they have a bunch of low grades spammers, essentially, that are jumping on there and just send firing at 1000s of messages? Yes, absolutely, they do, and you’ve seen that problem. Now they’re starting to tidy it up, though, which is good, and that makes a lot of sense.
Paul Thompson:
I always know that if I connect with someone, and the next thing they say to me is, “Please buy my stuff, buy, buy, buy. You want Bitcoin? Et cetera, or whatever it is.” If that’s what happens within 24 hours of me connecting with them, I’m going to disconnect with them just as quickly. Now, the difference with what we would advocate around using LinkedIn property and actually getting results with high quality prospects is your attitude, and your approach has to be around adding value and building relationship. Like if your first message after you connect with someone is buy, buy, buy. Yeah, of course, they’ll run into the other direction. Yeah, of course they are. That’s normal.
Paul Thompson:
Whereas if your first message connecting with someone is, “Hey, listen, great to connect with you. Here’s an article I put together recently for dentists in Florida, I thought you might find it really good. Check it out. Let me know what you think.” That’s not spamming, that’s adding value to someone, and that’s demonstrating your knowledge, showing that you’re an expert, showing that you understand that this is something that is relevant for them and so on. It’s just a different approach. And when you’re approached correctly, add value, build relationship, be professional, show them that you’re an expert, show them that you understand them. That’s when you’ll cut through the noise.
Reese Harper:
What do you think the rough, if I had to ask … I know this is kind of technical, but I would figure you to have this answer. What do you think the cost of obtaining a client is the cost of customer acquisition through LinkedIn, if you had to estimate for with someone who has a good message and a good defined market, and it’s a consistent message? I know it’ll vary in a wide range based on the size of the market and how valuable the prospect is. What have you seen just generally, though? Do you have to spend a year’s worth of revenue to get a customer? Yeah, tell me where we’re at on this.
Paul Thompson:
Yeah. As you said, it varies widely, it depends on like there’s a huge difference between being an advisor in South Africa versus being an advisor in the UK versus being an advisor in the U.S. and what you earn as an advisor. So we were talking to an advisor in Canada recently, and he just on boarded a new client, and that one client is worth 25k year one revenue to him plus back end ongoing and so on, whereas there was another client, he was getting 3k in year one. It’s a big difference. Therefore, what you can pay to on board and acquire that particular prospect varies based on what you’re also earning at the back end. So you’re right, it does vary.
Paul Thompson:
Look, I think, rather than thinking of a cost to acquire client, maybe cost to acquire a good quality prospect, and then assuming they have a good conversion process to onboard that prospect, because it sometimes depends on how experienced the advisor is, how their positioning is and so on. But let’s assume their experiences, let’s assume they know what they’re talking about, and their positioning is clear. I mean, your prospect costs should be probably a couple of $100, which means an actual signup client, then what’s that going to be? Maybe $2,000 approximately, depending on their niche.
Reese Harper:
Yeah. Because you’re probably … What’s a good conversion rate? If I’ve got 10 prospects, do some advisors … What are you seeing that rate of conversion be like?
Paul Thompson:
I think it varies hugely based on the positioning of the advisor. Like if you’re an advisor, and you’ve got three good quality articles, three good quality videos, a dialed in website, a good quality LinkedIn profile, and all is well lined up and orientationed towards a particular niche like dentists in Florida, for example, your conversion rates can be much, much higher than somebody who doesn’t have all of that kind of proof and backup and testimonials and case studies to really make it stand up.
Paul Thompson:
The overall goal of the LinkedIn strategy is to start a warm conversation with your ideal target client. Okay? And there’s an enormous difference between starting a warm conversation and starting a cold conversation. The cold conversation assumes the person you’re speaking to doesn’t know much about you, hasn’t had much prep, and you’re catching them on the go, so to speak. Right? Whereas a warm conversation means they’ve already most likely checked out your LinkedIn profile, maybe read an article, watched a video, possibly engaged with your website, done some messaging back and forward. So by the time they get on the phone with you, they already know quite a lot about you, and they’re expecting to speak to you, not your assistant, not somebody else, not somebody … but actually to you. That’s a much higher and warmer starting point than your cold starting point.
Paul Thompson:
So I would expect with the warm conversation, your conversion rate is much, much higher. And in general, if you let’s say in a week, you do three to five, kind of 15 minute discovery calls with warm prospects, that’s probably going to boil down to say, one to two more detailed calls or more detailed face to face meetings. And then the conversion rate out of that is obviously how good you are as an advisor, but you could be converting 50% of those, 75% of those, if you know what you’re doing.
Reese Harper:
So the strategy is more, start a warm conversation with people through LinkedIn? I mean, I know that we’ve spent a lot of time on LinkedIn, but this has just been very helpful. Obviously, Paul’s got a marketing consulting business that spans a very wide range of marketing activity, from content creation to different channels, and we’re not just doing LinkedIn in Paul’s practice. Because we’ve spent so much time here, I just want to make sure people know that’s not the only [crosstalk 00:34:30]
Paul Thompson:
LinkedIn is our speciality, by the way. Let’s clarify that. That’s why we love it. Yeah.
Reese Harper:
Okay, good. I want to keep exploring this because it’s very practical, very practical takeaway. But if I’m interacting with … How many people do you think I need to interact with and send requests out to with let’s say, a piece of content before I get a warm conversation? Is it 10 to one? What’s been your experience roughly? What would you say is good?
Paul Thompson:
Again, it comes back to the prep work that you do. So we talked earlier about making sure that you’re clear about your niches, we talked earlier about making sure that your message is very much dialed in to your target audience. So, I always say marketing is easy, right message in front of the right person at the right time, that’s marketing, and if you do that right, you get conversions. Full stop. You can’t control the timing factor, that’s kind of an individual thing for the person you’re speaking but you can control the message, and you can control the person that you’re putting it in front of.
Paul Thompson:
So if you can get those things lined up, your numbers to get to a warm conversation go down dramatically, whereas when you go very broad, and you have a very vague message, you need to put it out to 1000s [crosstalk 00:35:41]
Reese Harper:
[crosstalk 00:35:41]
Paul Thompson:
And that’s where the spammers and these type of guys don’t really kind of get it, they’re just throwing a very, very wide net and hoping something sticks, whereas we’re not advocating that at all, we’re like, “No, no, let’s be much more specific, be clear about your audience, get your message dialed in, get your content and your profile dialed in and behind that, so that by the time you get in the phone, that person is already warmed up to what you’re about, and therefore your conversion goes up.” So it’s not so much the volume, it’s very much sort of quality over quantity.
Reese Harper:
I mean, that’s something very practical that people can do, it’s like the new cold calling, but with much better strength, you have content to support you, you have a position to support you. I mean, imagine a world, guys, 15 years ago, where there was no way to differentiate yourself really quickly in the market without significant advertising expense. And now, you can position yourself in this narrow way and have a chance to cultivate a warm market. Anyway, man, this has been great, tons of insight here, I think we’ve covered marketing and messaging and positioning a niche and the importance of getting all of your campaigns to show the truth about who you are as an advisor.
Reese Harper:
In addition to this LinkedIn, what other … I want to hit one more thing that you feel like is essential or needed, because we can’t just go to LinkedIn. Right? We have to have some things ready before we can probably go do that. Can you talk to me a little bit about the type of content creation that you think advisors need to do?
Paul Thompson:
I get asked this question pretty much every single week, mainly because advisors don’t want to dedicate time to content creation, or they don’t feel that it’s a task that directly drives ROI in their business. And ironically, it actually is, and in fact, the better they do it, the better it’s going to drive the ROI side of their base. Look, there’s many number of ways to do content, a couple of simple ones are an article, most advisors can put together an article. Video, I really like video, I think video is a great way of communicating who you are, I think you come across as more human video, a little bit of stage fright issues I find with advisors, I would say 90% of them aren’t prepared to get on video.
Paul Thompson:
But of the 10% who are, the results they get are exponentially higher, just because they come across as much more human. Obviously podcasting can be very good as well. But starting with the base, let’s say an article, but it’s how you orientate the article, the mistake most advisors make is they start talking about the solutions or the products and so on that they have, which is fine. But bear in mind your target market doesn’t really understand the subtleties and differences of the different products or the news or whatever it is that you’re putting out there. What works much better is make it about the problems and challenges of your audience. What are the little niggly questions that your prospects already have rattling around in the back of their head? What are those three, four or five questions that they always ask you when you get on the phone or get on a first meeting with them?
Paul Thompson:
What do they ask? And then orientate your article or your video addressing either one by one or maybe in groups of three or four, those particular problems and challenges. If you can do that you’re positioning yourself as an expert, you’re showing them that you understand them. That’s really all they want. Show me that you understand me and then I’m going to pay more attention to what you have to say.
Reese Harper:
Yeah. Well, I think that’s a great place to wrap up here. We could probably go on for a few hours because I love marketing, as you can tell, it’s a very interesting topic to me. But it’s what keeps it advisory business in a really healthy place. Like if you have a steady stream of new prospects coming into your practice that are qualified and fit your niche, it really solves a lot of challenges. It solves pricing problems because you can continue to increase your pricing, you can let go of clients that maybe weren’t a good fit, you can improve your operational efficiencies, you can hire people that you’ve been desperately wanting to hire, you can improve your technology stack.
Reese Harper:
I just feel like advisors wait too long to invest in marketing in their career, and they start by hiring, for lack of exact economic terms, they hire for supply. They create supply in their practice, lots of supply. We hire new advisors, we hire associates, we hire support staff, just waiting for the clients to come in. But we know most advisors don’t work on the demand gen side near enough, and if you work on the demand side, in advance of creating supply, in my experience, that’s a better formula. So before you say, let’s get prepared for all the people they’re going to come in, let’s go first, let’s create the demand. And then we’ll create the supply with the money that we get from the demand coming in, as opposed to the other way around. But I don’t know what you see, Paul, but that’s been my experience.
Paul Thompson:
Absolutely. I think it also means you create a better book, because if you’ve got better lead supply and lead pipeline, you can be choosier about the clients that you take on. And therefore the book that you end up with, and the asset size and the quality of the clients is better, therefore you get better referrals, better growth. So it’s a kind of a flywheel if you understand what I mean, and if you can really make it work in your favor, but equally, it can work against you as well, if you don’t plan or lean into it.
Paul Thompson:
One thing I would say to you on this, and you mentioned this, I think, in another podcast is, it’s difficult for an advisor on early stage in their career, they can’t afford to have a full time marketing person sitting in their office, and they’re not marketing trained themselves. Therefore, it’s like, “What am I going to do with this?” They’re going to get an ops person probably in before they get the marketing guy in. That’s fine. They’re thinking rationally about it, but they almost need to upskill the ops person on how to run consistent marketing, if you know what I mean. So one thing that we help them with is that type of things, reskilling an admin or an ops person how to actually manage and quarterback their marketing stuff as well, instead of having to put a full time marketing person in the office.
Reese Harper:
Yeah, that’s a great service. There’s a lot of ops people that have capacity. There is some opportunity there to just retool someone that you already have on your team. I feel like too often we reach to hire a new person before we’ve fully tasked and resourced our current people. At least I’ve made that mistake in my career quite often, as soon as there’s a new problem, new person. Then you look at it and you’re like everyone’s at 50% capacity, though, like everyone’s at 60% capacity, like we really made the most out of what we have. Anyway, Paul, this has been fun, man. I mean, you could chat for a long time about this. I look forward to having you back on again, I’ll let you leave the last word with advisors today.
Paul Thompson:
I will and the very last word I’d say with any marketing, the thing that actually makes it work is that you actually need to be relentless with it, you need to go after it, not for a week or for a month, you need to consistently go after it for six months, 12 months, 18 months, two years to really make it work. And if you can bring that kind of relentlessness to it, that’s what get your consistent lead generation, that will allow you to plan the growth of your practice, and that will allow you to actually be able to see when you do your next hire and so on.
Reese Harper:
Yeah. That’s great, Paul, thank you so much for taking time, we look forward to catching up again soon. Have a great one.
Paul Thompson:
Excellent. Thanks Reese, I really appreciate your time today.
Abby Morton:
Next time on Elementality …
Reese Harper:
Every time I would go to a meeting, even though I had a lot of different software to help me track their net worth, and I was using existing financial planning tools, I’m having to sit down, I’m having to manually type in data at meetings, I’m literally having to walk through an update to their situation in a piece of desktop software projected on my TV screen, wasting all my time. I want to be in that meeting asking questions about how their life has been, I want to get to the emotional jobs of financial planning.
Abby Morton:
You can learn more about the Elements Financial Planning System at getelements.com/meet and schedule a time to speak with one of our friendly financial planning experts. Elementality’s executive creators are Reese Harper and Chad Jardine. Elementality is produced by Abby Morton and directed by Jordan Haynes. Have a good one.