Getting new clients is not easy. Well, some of you may think it is easy, especially if you have a constant stream of referrals from existing clients, but if you really want to grow your business, it takes a lot of time and effort to deal with the marketing, not to mention some cash.
Larger advisory firms have – on the whole – an easier time when it comes to marketing and generating new customers, not least because they can usually afford the specialist staff and have the revenue to put into creating more business.
Smaller firms, where one or two advisers are working together, face the prospect of dealing with so many aspects of the business that it is hard to be an expert in all of them, and let’s face it, there is only so much time in the day anyway. Often, marketing is the bit that falls by the wayside.
The good news, if you can call it that, is you are not competing with any greater number of advisers today than you were nearly a decade ago.
The number of advisers in the market has remained largely the same over the last eight years, according to the latest Apfa report, but while turnover has steadily increased, pre-tax profits have fallen by 6.7 per cent to £779m. While the majority of directly authorised firms (86 per cent) are operating as either a limited liability company or limited liability partnership, but 14 per cent are operating with unlimited liability because they are working as sole traders or in partnerships.
That is a risk, because if something goes wrong and you get sued, your personal assets could be in jeopardy. It also goes to show how many of these firms are working in splendid isolation, most probably with few additional staff.
In many cases, new clients will come from referrals from existing clients, which is an ideal way to get in front of someone because the person recommending you has clearly had a good experience. But if you want to grow your business significantly, this type of ongoing referral business is simply not enough to boost your practice as quickly as you might like.
However, for many advisers marketing is something of a dark art that is hard to understand, and even harder to execute. Yes, there are plenty of materials available to advisers that are generic from providers of everything from investment and pension products right through to mortgages, you can even get some of it co-branded to help personalise your communications to clients, and potential clients. But how exactly do you decide where your marketing efforts are going to be targeted?
First of all, you have to know who you want to attract as a client to your business. Spending some time considering this will help you to reduce the amount of money you might waste searching in areas you are unlikely to find your ideal client. Remember, the ideal new client may not have the same profile as the majority of your existing clients, especially if you are keen to diversify.
Many marketing companies will ask you to create an ideal ‘client profile’ and they will occasionally give them names too. It is up to you if you want to go that far. Cheesy as this sounds, and sometimes can be, it is actually a very effective way of ‘knowing your client’, in the marketing rather than FCA sense. What does your ideal client do? Are they a professional – lawyer, doctor, dentist, executive? How old are they? In their 30s, 40s, 50s or older? How much money do they need to have to invest - £50,000 minimum, £100,000 minimum or even higher?
Knowing this level of detail will help you identify exactly where and when you need to focus your marketing efforts. For example, if you specifically want to attract medics, then somewhere like The Lancet would be an ideal place to advertise. But the chances are that will set you back a bit in cash terms.
So other methods, such as social media or online marketing might offer a better and cheaper solution.
One essential with any marketing strategy you undertake – whether it is offering seminars locally, advertising in local papers, magazines or social media and other online media – is to ensure you know which marketing methods are the most successful. Not monitoring the various marketing methods you employ is tantamount to standing in the shower and ripping up £50 notes. There is little point in putting money into marketing without knowing where you are getting the best ‘bang for your buck’.
Anyone who does this as a matter of course may be wondering why I am even mentioning it, but you would be surprised how many people spend money hoping for a good result without actually analysing what is working.
Although online advertising might appear intimidating if you are essentially a technophobe, there is no doubt it is the best place to advertise if you want to know exactly how much benefit you are getting from your activity.
So don’t be fearful of marketing activity online, embrace it. Just make sure you know how much each client is costing you to bring on board, no matter what your strategy.
Alison Steed is a freelance journalist
