February 3rd, 2020
The solo financial advisor must be a jack of all trades, comfortable wearing many hats, and able to straddle diverse — but still key — tasks handled by standalone departments at larger firms. This calls for a solid sense of self, extraordinary listening skills, and instinctive adaptability.
To help, we provide this guide for using “growth hacking” around marketing efforts, addressed primarily to novice RIA owners and new independent broker-dealer affiliates — but with good information for veteran advisors as well.
Many sole practitioners struggle to function as their own chief marketing officers, chief investment officers, chief compliance officers, and, of course, heads of operations. In contrast, other small-firm owners feel they have it down cold, especially when it comes to marketing. They extol their marketing methodologies, but can’t point to verification.
What do both groups of advisors have in common? Setting aside their undoubted abilities as financial advisors, most advisors, whether or not they feel confident about their marketing, are unfamiliar with the emerging digital marketing landscape.
Let’s outline the growth hacker’s approach to marketing, which is startup friendly, cost-effective, and is used to get new businesses off the ground.
Growth hacking is a marketing-and-promotion-based growth strategy focused solely on rapid business growth.
Growth hacking uses a series of small tests to measure the effectiveness of your marketing efforts, overall client satisfaction, and the following metrics:
Acquisition: rate at which new prospects are attracted
Activation: rate at which prospects become clients
Retention: rate at which clients are retained over time
Revenue: the money brought in
Referral: rate at which clients refer new customers
These bare-bones metrics allows business owners to focus on what will make the business thrive in its first five years when advisors are mainly focused on getting clients in the door and keeping the business afloat. Among successful companies that have used growth hacking to achieve success in their initial launch stages are Dropbox, PayPal, Airbnb, HubSpot, Yelp, Quora and Tesla. Before growth hacking methods are employed, it’s important the business have a defined target audience with specific client-type profiles in mind.
In addition to knowing what clients you’re after, you must also have very specific goals for acquiring them. If you have [a particular niche](https://www.chalicenetwork.com/blog/how-a-niche-can-enhance-your-bottom-line "How a Niche Can Enhance Your Bottom Line") in view — whether it’s dentists, contractors or executives in a particular industry — you have to define it, measure it, and figure out how to appeal to it. Most of all, you have to understand what your firm has to look and sound like to attract clients from the group you want to zero in on.
The point of this focus, of course, is to make your knowledge more scalable through specialization, and increase the likelihood and value of client referrals.
Content marketing is about delivering digestible information to prospects, usually with an educational bent. The point of this — at least from a marketing perspective — is to make your firm increasingly familiar to a target audience of prospects, though it can also bound as in-bound messaging to existing clients. Marketing experts say it takes ten “touches,” or messages, from your company before a prospect decides to engage with your firm on any level.
Content marketing encompasses words, pictures, downloadable documents, and videos on websites, as well as blogs, targeted emails, and social media. If you’re not using these diverse and demonstrably effective media, you simply aren’t growth hacking.
Growth hackers run multiple campaigns, typically by means of social-media posts and email campaigns, often directed to particular parts of your website. Crucially, the variations you devise present essentially the same offering with a range of differences in design and wording. This is called “A/B testing.” Though in growth hacking, you may have campaigns A through G cycling through at faster rates.
One instance where this tactic would be deployed is in your PPC campaign (pay per-click) but can also be used anywhere else you send advertisements.
Boiled down, this is a method for seeing what works. You will monitor the results of specific A/B campaigns, looking in particular for small peaks in new leads. Using this campaign testing, the advisor can identify what leads respond to the most, shave off what’s not working, and continue to enhance ads that are getting results.
It is vital to document every change made and keep track of what works and what doesn’t. In growth hacking — as with many aspects of life — failures outnumber successes. But it’s an excellent framework for making your marketing work for you.
Growth hacking versus traditional marketing methods is a matter of identifying what messaging actually works as opposed to guessing and running a bigger risk of being wrong and spending even more time and money on ineffective campaigns.
As an example, we’ll zero in on a common metric: client acquisition cost, or CAC, which is basically how much on average your firm spends in order to gain a client.
To start, your firm should get into the habit of measuring its weekly, monthly and yearly expenditures for:
All marketing materials and collaterals
Ad campaigns and other outreach
Time spent on marketing
To measure CAC, you would then take the overall (or campaign-based) marketing expenditures over a given period of time (growth hacking suggests a smaller period of time — so, say, a week) and divide that by the number of new customers acquired. This will give you the average cost of acquiring a client.
In turn, this can help you to determine:
Improvements needed for your overall marketing strategy
The effectiveness of particular campaigns
How well you’re targeting your efforts
How effective the parts of your website to which your ads direct your audience are in converting shoppers into prospects
In growth hacking, this metric will change as your marketing campaigns get sharper and you start to do more testing. The point of this approach is as much to establish a new growth-savvy mindset than determine costs.
So while the approach may be to set long-term goals, and to measure quarterly results, in growth hacking it pays to measure daily, weekly, and monthly results. Commit to spending enough to get a response rate that is high enough to accurately measure your target audience’s response as against daintily committing random acts of marketing on a strict budget in hopes of landing the odd new clients.
Cutting-edge businesses use multiple online channels of communication such as social media, email campaigns, website landing pages, etc., to acquire new prospects. Identify the most likely avenues of communication for your target, and test your assumptions to get a better sense of where your target market really is hanging out, and what sort of messaging they’re most receptive to.
Once you identify the most effective channels for your marketing campaigns, set goals every channel you use, and continue testing to optimize your presence on these platforms.
Unless the main goal of your ad campaign is to collect emails, it will usually direct prospects to your website. If your site has 300 visitors a month, and 30 of them reach out to you, and two of them become customers, then your conversion rate is at about 0.67%. You should keep track in similar terms of every campaign you run, by whatever means it goes out. Tracking these metrics is vital to optimizing the effectiveness of your wording, design, and overall offering.
A comprehensive click-through rate evaluation considers:
How many people saw the content
How many people opened the content or opted to download
What percent of them clicked on the call-to-action after opening
What percent of people clicked through to your website
What percent of people inquired about your services
How many new users now pay for your service as a result of the marketing campaign
As with tracking CAC — remember, client acquisition cost — click-through metrics help you ascertain average “pay-per-click” rates for specified content, which is in turn an indication of the effectiveness of your campaigns and your website. “Bounce” Rates Can Be Just as Telling as Click-Through Rates
A bounce rate is the number of people who land on your website or email send, and quickly leave without taking action of benefit to you. This can also be tracked for individual campaigns to measure the success of any marketing effort. Just by viewing this metric, you can begin to address weak points in your campaigns.
For websites, a high bounce rate is generally bad for google search results because it tells Google that people aren’t satisfied with this site, which can weaken your search-ranking results. Your bounce rate can be measured through Google Analytics, which allows you to see all of the activity on your website.
Another important component of growth hacking is client retention. The methodology involves continuously working to improve your products and services to keep clients engaged and prospects impressed. This may also be why some define growth hacking more like a “mindset” than an actual system or process.
As growth hackers, financial-advice-firm owners should also keep track of how many clients left in specific periods of time. This allows the business to easily identify trends impacting prospects, clients, the market — even large-scale cultural shifts.
While you’re evaluating your business in light of your growth-hack-inspired findings, you may want to think about where you can improve on or expand product and service offerings, identify up-selling opportunities, or make inroads on new niches or geographic territories. Evaluating the metrics outlined in this article will help to pinpoint such openings.
Also, and well within the growth-hacking framework, you could survey clients to discover what services they would like you to provide.
Another intended outcome from growth hacking as a financial advisor is to be so client-centric that you generate referrals like crazy. This calls for a correlated referral program, run in tandem with your marketing campaigns. Offering discounted services, or freebies to customers who bring in word-of-mouth referrals is a great place to start.
There are sites like refermeiq.com and many more that will actually automate the referral process for you and provide you with all of your metrics. Handy, huh? The key aspect of referral programs is to work them in at the right moment.