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Advisors not in the digital space ‘don’t exist’: Q&A with In|Vest speaker, Schwab’s Susan Forman

Q: Is there any truth to the belief that digital marketing delivers a poor return on investment?

SUSAN FORMAN: There are three myths that advisors are busting as they experiment more with digital marketing. One is around return on investment. Another is that digital marketing doesn't contribute to business-building for advisors. And the third we've come across is that that high-net-worth and ultrahigh-net-worth clients are not on digital. All those are not accurate and we are seeing advisors tackling those myths and overcoming them. Our research is bearing that out, too.

For example, when we look at ROI, first of all, more advisors are playing in the digital space and that's incredibly important. When you think about how consumer behaviors are changing, how a buyer's journey is changing, there's very little that we do today that we don't first validate by going online, doing some research, making sure someone is who they say they are, or for referrals or other endorsements.

Before you make an investment in digital marketing, we feel what’s foundational is that advisors have documented an ideal client persona and a client value proposition. Doing those things, you’re identifying the client the firm is best-suited to serve, in addition to the value that your firm provides to that ideal client.

This year in our benchmarking study we included for the first time a marketing special section. We always ask some questions in the study that get to high-level marketing, but this year we had an entire section on marketing. Our research found that those advisors that document an ideal client persona and that client value attract significantly more new clients and in our study [of 1,200 firms] this year we saw advisors reporting 26% new clients if they have those two things actively showing up in their digital marketing. And they saw an increase of 41% in assets from new clients.

Anecdotally, we’re seeing it from advisors and hearing in conversation with them: If an advisor isn’t present in the digital space, it’s pretty much as if they didn’t exist from the prospect’s perspective. Everybody is looking for that website to validate that the advisor is who they say they are and to read about their firm.

The good news is that 92% of all firms have a website and the primary goal of that site is to attract new clients. The other thing we learned is that 52% of advisors are optimizing their site for mobile, and 48% are optimizing for search engines to extend the reach of their digital efforts. They’re including some other basics too, including email newsletters, getting on social media and video, though that’s lagging compared to other forms of digital marketing. That full suite is now being employed, which I think is very helpful considering the challenge they have of differentiation, and the question of how do they get their story out there.

How did you measure how well advisors were documenting the ideal client?

This year, our business consulting and education group took a step back and looked at all these learnings and consulting they have been doing over the years. They identified five guiding principles for advisory firms’ success. One of those principles they called, "Your reputation is your brand." In that principle, what they learned, those firms that document what their story is, what their value proposition to their clients, what their ideal client is, and how the firm interacts with that client persona, those are seeing new growth in new clients.

Susan Forman leads Institutional Services Marketing at Charles Schwab.

What other findings has your research produced?

There are three different models for how advisors are tackling marketing. Some are taking a DIY-approach, adding another hat to the ones they are already wearing at the firm. Certainly it’s the most cost effective, but also the most challenging, as it will likely not allow them the time that they really need to devote to marketing in that fashion. The second model is bringing someone in-house. A lot of advisors over the last few years have been focused on what’s that tipping point when it makes sense to hire someone for that role. They aren’t client-facing so there’s overhead in the role. What are the trade-offs, how do they make that decision? Lastly, there’s outsourcing, either bringing in a marketing firm or a PR agency. That tends to be more expensive, but someone who knows the market well can really amplify and accelerate the efforts of a firm.

Are there any suggestions for advisors on how best set up a website, so prospects can get that validation and move on to picking up the phone?

There’s no correct path. Everybody tackles it in the way that they believe makes sense for their firm. But we really do think one of the best digital practices is that you have to start with a strategic plan. That’s aligned with how our consulting partners think that client persona and the value proposition come about. If you don’t know who you are, who you have to appeal to and who that client is, you really aren’t optimizing your marketing.

Follow that with creating a digital marketing plan, which sounds very fundamental, but you don’t want to be grabbing at straws. You want to document what it is you’re trying to do, who you’re trying to reach, how you’re going to do it — and then sticking with it. The beauty of a digital environment now is that you get results quickly, but you need to stick with it to really see trends.

So related to this point, don’t create too much content. We all feel this compelling need to feed the content beast. But if you take on too much, and if you’re not measuring the effectiveness of what you’re producing, it’s going to be a fool's errand. So we take a prudent approach to producing content and measuring what is effective, so that you are efficient in your marketing.

You have to make time for this effort, it doesn’t just happen. Focus on the things you can do really well. And the most important thing, which most advisors still have to work on, is measurement. Measure everything. In our benchmarking study, we found that 58% of advisors have optimized their website for web traffic analytics, but only 19% have developed their websites for lead tracking and development. So they’ve got the analytics, but they’re not doing enough to capture prospect information. So advisors aren’t yet sure how to read those analytics and use them to their advantage.

When you consider how time-pressed advisors are, they won’t achieve marketing effectiveness if they’re not doing the legwork to understand what’s working for them. If one piece is really popping, people are spending time reading it and filling out a form to learn more, and three are not generating that interest, you know what’s effective, and that’s how you generate efficiency.

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