I came off the phone with a prospect yesterday feeling frustrated.
The business I was speaking too are an established IFA in the north of England. They were calling us because they were interested in financial marketing, particularly via digital marketing.
Their team comprises about 5 financial advisers, with a respectable support staff team. So no small fry. They had successfully grown their client base over the years, attracting new clients mainly via referrals from existing clients.
Most IFAs will appreciate the importance of referrals as a marketing channel. When these leads come to you, they already bring a high degree of trust, warmth and qualification with them.
The problem is volumes. Referrals only tend to take IFAs so far in their financial marketing. So they cannot solely rely on them to sustain the growth of their business.
Savvy IFAs, like the one I spoke to you yesterday, will therefore need to “diversify” their marketing to include other channels. This keeps a steady stream of leads coming in throughout the year. Such channels might include print advertising, direct mail, email marketing, Google marketing and more.
The problem comes, however, when an business’s experience in one marketing channel (e.g. referrals) skews the expectations of other marketing channels.
How The Conversation Transpired. And Crashed
My phone call with the potential client yesterday went something like this. As we discussed the financial marketing proposal we had sent to them, I said:
Me: “We’ve had a look at the digital landscape in your local area for you. Whilst we cannot guarantee results or predict the future, we feel that anything between 10-20 leads per month is realistic.”
Lead: “10-20? Those numbers are way too high! I’m not looking for a scatter-gun approach. I’d rather have 1 lead per month which is guaranteed to convert. That’s what we have at the moment with our referral leads. Every referral to us basically converts.”
Me: “I understand that conversion rates are usually higher with client referrals. However, with virtually all other forms of marketing the conversion rates are lower. Digital marketing, done properly, is one of the stronger marketing channels at your disposal because you can be very targeted, and you can easily measure the results of the campaign. Not every lead will convert, unfortunately, but even if 1 or 2 out of 10 converts each month then that’s a great return on investment when you consider the lifetime value of the client.”
Lead: “It sounds like you’re trying to bamboozle me with these high lead numbers. I don’t want quantity, but quality. What good is it to have financial marketing which produces a 10% or 20% conversion rate?”
Me: “I don’t want to contradict you. But if 1 or 2 out of 10 leads per month convert, and stay with you for decades as a fee-paying client, then surely that’s worthwhile? It may be somewhat irritating to have to turn some leads away, but this is a completely normal part of the sales process.”
The conversation went round and round like this for a while. Eventually, I offered the proposal to the potential client for further consideration.
We agreed we would talk again, but internally I was fairly certain this wasn’t going to go much further.
Financial Marketing: Coming Back Down To Earth
Managing expectations is a crucial part of the sales process. Sometimes, however, there is such a gap between the parties’ starting points that it makes it difficult to carry the conversation further.
Part of the reason in sharing this post is to vent some of my disappointment over this particular phone call. However, the broader purpose is to try and close that gap.
After all, if enough people read this post, maybe we’ll all edge closer towards being on the same page when we talk about financial marketing.
So, let’s look at closing that gap on the subject of conversion rates. What is a realistic conversion rate for digital marketing? Is it even worthwhile if they are shown to be lower than the conversion rates emanating from referrals?
The reality of digital conversion rates
Let’s suppose you can get onto page 1 of Google for 15-20 local search terms, relating to your business. These might include search phrases like “financial adviser”, or “pension adviser”.
The former might have 100-150 searches per month in a given area. The latter might have 200. It varies across the country, but for the example’s sake let’s assume these figures.
When you add up all of the keywords you are looking to target, the sum total might be around 1000 searches per month. That’s pretty significant.
Now, suppose you get onto page 1 of local search in Google for each of these keywords, by engaging in search engine optimsation as part of your financial marketing (SEO). No one really knows what the click through rates (CTRs) for organic search are, but they’re almost always higher than the CTRs for paid search, which averages around 2%.
So your organic click through rate might be as high as 30-50%. If so, then that’s potentially 300-500 website visitors a month from people in your local area, who are actively looking for financial advice.
Some of those people will connect with your brand. Some will not. Some will be ready to meet. Some will not. So your conversion rate will not be 100%, and nor should you expect it to be.
However, you might be able to make it 2%, 5% or even more. If so, then that’s potentially 5 leads a month. Or it could be 10, or 15, or 20, or even higher.
OK, so some of those might be a student looking for advice on what to do with £1000 in an ISA. On the other hand, one of them could be the director of a global corporation, who is looking for a competent adviser on how to manage his investments.
Is financial digital marketing worthwhile? For sure.
Hopefully, all it takes it to look at the example I’ve outlined above to show that digital marketing is worthwhile for financial advisers.
You will not get anything near a 100% conversion rate, but if you do it right then you stand a really great chance of generating some solid, profitable leads.