How much an adviser should spend on marketing is a perennial question with an expectation that there is a definitive $ or % answer.
There isn’t. So the better question is how much time should an adviser spend on marketing.
We know that time is money. We know that marketing costs money. But the most effective marketing costs more time than money.
Here is a case in point:
One of the most successful advisers I know says that he spends his work time thus:
- 20% in client facing meetings
- 10% running his business
- 70% networking and doing client marketing
On the surface that seems to be an extraordinary imbalance in comparison to most other advisers, yet this is a great producers with a great business. It is an example of the Pareto Principle applied in practical terms: in personal revenue generating activity he is spending about 20% of this time for the overwhelming majority of the income generated in any given financial reporting period. And his production and revenue numbers rise at a disproportionately high rate year on year – his business grows quicker than most every year…year after year…for around 3 decades continually now. So there must be something in this approach that is worth considering.
Heres the thing that he figured out: Everything his business can generate in the future depends on how much time and effort he puts into keeping the opportunities flowing; not in how much time and effort he puts into producing written statements of advice.
He is spending only 20% or so on immediate revenue-producing work, and some 70% of his time on creating future opportunities – and that is what marketing is when you get right down to it. Marketing the business consists of the financial resources, personal activities AND personal energy or time that are required to create future client engagement opportunities. It’s not a formula whereby a certain percentage of turnover spent on marketing or advertising equals growth. Super-successful advisers consistently spend more personal time and effort into marketing than they spend on advertising or marketing campagins. They spend more time on marketing than they do on “selling” too.
The most successful advisers often have pretty limited client facing time as a proportion of their total working hours, but they make that time count.
Client facing time is not spent filling out a gazillion forms, and nor is it having a coffee catch up just to shoot the breeze with them. Socialising over a coffee or anything else certainly happens, but it is not considered client-work. That is a marketing activity.
The difference is that the successful adviser has clarity of purpose for each of these different metings. One is to determine needs, discuss concepts and strategies, and determine an optimal way forward. It is results-focussed short-term project management, and has clearly measurable outcomes. It also has an immediate value to both the client and the adviser. The purpose of the other is to deepen relationships, increase top-of-mind-awareness and create (or become alert to) future opportunities for the adviser to exercise their skills. The first is “sales” focussed; the second is pure marketing.
It is this second sort of meeting that takes up to 70% of the successful advisers working time. Client events, or networking with influencers, or semi-socialising with clients and prospects are all incredibly time-consuming activities…..but they pay off.
Some research that Matt Oeschli put out a while ago from a survey they did with 586 Elite Advisers revealed that 82% of those advisers have social relationships with their top 25 clients. Interestingly it also revealed:
- 78% get new clients from referral alliances
- 78% get new clients from personal introductions
- 76% get new clients from unsolicited referrals
- 62% get new clients from networking and social prospecting
- ….and about 50% of the most successful advisers suggest a social get-together as a first step after meeting new prospects.
What this type of research shows is essentially the same story that we get anecdotally form individual advisers who are incredibly successful, and that is
The most effective marketing tool you have is you.
It follows that how an adviser uses their time is the most valuable marketing resource they have.
How much time should an adviser put into marketing and putting themselves into a position to create future opportunities? Something north of 50% would be a good guide if we are to follow the examples of those who are already super successful, instead of the 10-15% which is more typical for most advisers.
It is worth noting that often the most successful advisers are not necessarily smarter or more technically skilled than average advisers either in my view. They typically produce 3 or 4 x the results though. They are always very good practitioners of course, but are their skills or knowledge 3 or 4 x better than the next adviser? Not usually…..maybe twice as good, but not 4 times as good generally speaking.
What they are 4 times better at is understanding that their most valuable marketing resource is their own time, and that every effective hour of marketing produces almost unlimited future opportunities. Because of the emphasis upon being better at marketing and networking than being a salesperson or a technician in the “here and now”, they focus on continually creating great future opportunities to gain new clients or engage in new work.
The lesson from the great advisers is to clearly to spend more time working on marketing than selling or doing. The greatest marketing return comes from the time they spend building and strengthening relationships with influencers and clients than anything else they do.