Participants:
Steve Wershing
Julie Littlechild
Megan Carpenter
Julie:
Welcome to another episode of Becoming Referable, the podcast that helps you be the kind of advisor people can’t stop talking about. I’m Julie Littlechild, and on this week’s show Steve and I are speaking with Megan Carpenter, the co-founder and CEO of FiComm partners. FiComm Partners works with financial advisory firms and the firms that support them to create strategic communications programs that incorporate public relations, digital marketing, branding, social media, and creative services. They live and breathe this industry.
In our conversation Megan breaks down the difference between business development, referrals, or client experience, and marketing, and why the latter is often overlooked, and why it’s so important to your growth plans. She talks about what it really takes to stand out in a crowded marketplace, and how authenticity plays into that process. Megan provides us with some great examples of firms that are doing things exactly right. With that, let’s get to the conversation.
Megan, I’m so happy you’re here today. Welcome to Becoming Referable.
Steve:
Welcome, Megan.
Megan:
Thank you so much for having me. I really appreciate the opportunity.
Julie:
Oh, this is great. I’m so glad to have you. I’ve had the pleasure of hearing you speak, and talking to you about the industry. I’m excited for the expertise that you bring, but I was thinking maybe before we even jump in on marketing, which we’re going to talk about in detail today, could you give us a little bit of background on FiComm and the work that you’re doing for the industry?
Megan:
I’d love to. FiComm Partners is an integrated communications agency, and essentially what that means is we help our clients to connect more effectively with their target audiences. We believe very strongly in the power of words. We think that for financial services companies that are struggling to make authentic connections with their target audiences in today’s digitally driven landscape, that we can affect change by helping our clients to understand the power of strategic communications.
We work with our clients to help them connect and engage more effectively with their prospective clients through ongoing marketing, public relations, and branding work. We do focus squarely on financial services, and have a specialty in the independent wealth management community. I’ve worked with financial advisors and advisory firms for over 16 years, and FiComm is really founded on the belief that if we can help financial advisors to build better businesses, then we can be a part of positive incremental change in the world.
Really happy to be here because I know that we have a lot of synergies between the audience that you are speaking to with this podcast, and the audience that FiComm works with on a regular basis.
Julie:
Yeah, absolutely. I just made a note, ’cause I want to come back to that notion of authentic connection. I think it’s such an important one. But I thought maybe it would be interesting to almost structure this conversation for advisors a little, because we’re talking about communications, and marketing, and there’s a lot of different terminology. When I heard you speak recently you talked about this potential confusion between client experience, business development, and marketing. Can you break that down for us just a little bit and maybe talk about what each one is and why it’s important to have that distinction?
Megan:
That’s a great place to start, because I really believe, based on the years that I’ve worked with financial advisors, that there’s just a general misunderstanding about marketing. When we’re working with financial advisors, and they’re thinking about their marketing strategies and how they want to utilizing marketing to grow their business, they often don’t understand the different facets of talking about your business and promoting your business. We’ve over the years distilled it into three really clear areas that are separate business functions but that all are related.
As you mentioned we talk about client service, business development, and marketing. When we’re speaking to advisors, and I’d love to hear your feedback Julie and Steve, if you hear this often too, but when we ask what has historically worked for you from a marketing perspective, nine out of ten advisors that we speak to say referrals. That’s how I’ve marketed my business. That’s how I’ve grown my business. Do you guys hear that as well?
Julie:
Absolutely.
Steve:
Well, we do, and maybe you’ll get to this, I’ve got a challenge with the premise of the question. If that’s where you’re going you can stop me now and I’ll let you go, otherwise I’ll bring something up.
Megan:
Well, let me continue with this thought and we’ll see if we get to your thoughts.
Steve:
Sure, okay.
Megan:
Essentially when I hear a client, an advisor, tell me that they’ve built their business on referrals, and that their primary methods of marketing have been communicating to existing clients through quarterly newsletters, or market commentary, or appreciation events, to me that’s a really clear client service function. I define client service as everything that an advisor is doing to retain an existing client, to increase wallet share from existing clients, and to earn ongoing referrals.
Client service is absolutely a critical business function, but it’s not marketing. Marketing is everything that you do to reach and persuade new people that are not in your current sphere of influence. I always tell advisors to draw a circle on a piece of paper, and within that circle, that’s their sphere of influence. It’s everybody that they know. It’s people within their community. It’s people connected to their families. It’s people connected to them professionally.
It’s everyone that knows you, and you know them. Advisors are typically very visible within their sphere of influence, but if you look at everything outside of the circle that you drew on your paper, most financial advisors are invisible to everybody outside of their sphere of influence because they’re not truly marketing their business. They’re not doing anything to reach and persuade new prospects, people that would otherwise never know their business.
When we talk about marketing at FiComm Partners that’s what we’re talking about. We’re talking about, how can we help our financial advisor clients to reach and persuade, connect and engage with new prospects? Then this third business function which is related but also separate is business development, which is primarily a sales function. Business development is about being a rainmaker, leveraging those existing connections in a direct, person to person approach to closing business, but that’s also not marketing. When we think about how advisors are approaching their pure marketing efforts we want to make sure that we look at marketing distinctly from client service and business development.
Steve:
Megan, if I can put an exclamation point on that, I think that’s such a critical point because I talk to so many advisors who, they’re founders of their firms, and they started with very little. They built a successful practice, really, so they believe that they’re good at marketing. But what they’re good at is selling, is business development, as you said. It’s not that you can’t have a good lifestyle, or create a lot of revenue with selling, but it’s limited, because you’re not communicating with the outside world, and at the very least you’re just working a lot harder than you need to if you don’t have the marketing beyond that. What can marketing do to compliment and support that business development function?
Megan:
I totally agree with you. I think most successful financial advisors today are successful because they’re really strong rainmakers within their own community, and they’re strong sales people. They also happen to have a technical financial expertise. Those two things coupled together make them successful financial advisors, or successful advisory firm business owners. When we think about marketing, we want to first and foremost augment that, so essentially take the deep relationships that they have within their community, and their innate ability to sell their services, and essentially leverage that intangible, that something special that they have through the marketing lens.
What marketing can really do to augment sales is to elevate the purpose, the mission, the vision of why financial advisors are doing what they’re doing, and to do that in a way that you can then take that message out to a much broader audience through marketing strategies. It’s sort of a very connected and complimentary skillset, business development and marketing, but I find that if financial advisors don’t look at them as different, they’re really hamstrung from a marketing perspective because they think that they’re doing marketing and they’re not.
Julie:
I wonder if … If I go back to your first comment about client service, absolutely agree that that is going to connect to referrals, although there is a bit of a field of dreams thing going on right? It’s not just if you deliver great service they will refer. It just doesn’t happen that way. Some will, but there’s a lot more opportunity, so I’m interested as we dive into what it takes to market effectively, if we would find that those same strategies and tactics would allow advisors to leverage client service to drive referrals as well.
Megan:
Right. You’re correct, Julie. There’s so much work that you do to help financial advisors create a better client experience. Today it’s truly about that experience. It’s not just about the service model. It’s about the total experience that clients have that make you more referable. I think that there is a lot that marketing can do to set the client experience in the right tone so that as you then move from a lead, to a prospect, to a client, and then a client that you’re delivering this experience to, you started that relationship in the right way, which is, how can you use marketing to get people to connect with you?
How can you use marketing to earn loyal brand followers? How can you use marketing to share a consistent message so that when those people that meet you through a marketing strategy become clients, that they’re telling the right message to the people within their communities that might need your service? Again, similar to marketing and business development, that’s why marketing and client service are so connected. It really needs to be a consistent story that’s told throughout the lifetime of the relationship in order to have the most success.
Julie:
Yeah. That makes a ton of sense. Maybe we could just pick up there. You’re talking about story, and consistency. How do you help advisors figure out … It sounds obvious, but it’s not right, what that story is that they want to tell?
Megan:
It is the most challenging, as well as the most rewarding thing that we have the opportunity to do here at FiComm. That is exactly how you set it up. How do we help advisors to understand their narratives, and to tell their story in the right way? We begin all of our client engagements by focusing on building a strong and solid brand infrastructure. When we think about how we approach marketing at FiComm partners, what’s our philosophy, we have a three step approach to building out marketing plans with our clients.
It starts with brand infrastructure, which I’ll talk a bit more about, and then it moves into content creation and distribution. Then the third step is becoming digital and social. But you can’t do content creation, and you can’t become digital and social, until you’ve built that brand infrastructure. That’s where we begin all of our work. I strongly believe, and I’ve seen over the course of the last 15 plus years in this industry, that if financial advisors forego this step, or diminish the value of their brand, that they will not see the success that they want to see in coming years because they haven’t dedicated enough time to telling their story in the right way.
When we begin working with advisors we engage in a discovery session. There’s research that we do in advance. There is work that we send to our clients in advance of the meeting. Then we facilitate a session where we really embed ourselves in the client’s practice, in the financial advisor’s practice. We ask them questions about, “Why did you get started in this business? If you could only be known for one thing, just one thing, what would that be?” We talk about their longest tenured clients, and why they think those clients have stayed with them for so long.
We talk about their current perception of the marketplace and how that contrasts to their desired perception in the marketplace. We talk about competitors. We dig into services offered. We dig into historical communication. We ask a lot of questions. We challenge our clients, and sometimes I think might make them a little bit uncomfortable, but we really want to push financial advisors to get to their purpose, because that’s where we can find that unique quality that’s not replicable across the industry.
A lot of times financial advisors say, “Well, it’s so hard to market because I do exactly what everyone else does, and people choose me because they trust me.” I love when they say that, because the beauty of great marketing and great branding is that it absolutely sells trust and relationships for you, but you have to be vulnerable to allow yourself to think about, what’s the true essence of this business? Why do I do what I do? Why do my clients choose me? Why do they stay with me?
Then we use that information to create a set of brand messages. The brand messages are then the overall narrative of your story. The messages speak to your vision, your purpose, and your mission, but then they also identify your target clients, the types of clients that you want to replicate, what those clients’ pain points are, and how you as a financial advisor solve those pain points better than any other financial advisor.
When we have the brand messaging in place, that is the beginning of a brand infrastructure that can support any communications efforts going forward. That’s how we help our clients to determine their narrative and to begin building a story that will then be woven through all future communications.
Julie:
Just on that, a lot of the folks who are listening probably control their own brand, but some may not in the sense of, they could be part of a larger firm that has a corporate brand, but it sounds like this concept still fits in if there is a larger corporate brand. Is that fair?
Megan:
It definitely does. It’s just, how do you leverage that larger corporate brand? For financial advisors that are part of a larger independent broker-dealer network, or potentially connected to a wirehouse, you actually have a lot of leverage because you have a corporation that is investing resources into building a national brand, and that’s something that’s very difficult for independent financial advisors to do.
Most independent financial advisors don’t have the same budgets as some of these larger corporations. What we encourage financial advisors that are part of a corporate relationship to do is really to leverage that brand, and to be a part of it, and not really to try to fight against it. What you want to do is leverage the best parts of the corporate brand, and then make it relevant to your target audiences. That’s where the individual positioning can come in.
You always want to think about how you’re connecting directly with your ideal clients. What we would suggest doing would be, take the messaging from the corporate brand level, use that as what I would say your macro messaging, but what’s the micro messaging that’s specific to your practice, or to your target audiences, and they need to be related, but it’s really just about leveraging the best of both worlds. Leverage the corporate brand, and use it in a refined way to speak directly to your target audiences.
I would say that there’s as many benefits and challenges to either. If you’re independent versus being part of a corporate brand I think it’s just about making it work in your favor.
Steve:
At the risk of saying something that’s totally, utterly out of left field as you talk about this, but that’s my want, as Julie will tell you …
Julie:
You going to talk about unicorns or something?
Steve:
Well, exactly, and rainbows. As you were talking it also occurred to me that this is manifested as well in the succession problem, that if you have somebody who has a practice and is selling all the time, but not distilling out that story, and not being able to articulate that story and passing that story on to the other people in the business, that it’s hard for other people to become rainmakers because they’ve got to start from scratch all over again.
But if you had a good, solid story that was consistent, that everyone in the firm was articulating, that would help in business development for, other than the founding advisor, and it would help pass that along to the next generation. Do you ever see those kinds of ramifications with the firms that you’ve helped develop their story?
Megan:
Oh, absolutely. We often see people coming to us, financial advisors coming to us to solve that exact problem, Steve, which is, “I’ve built this business because I’m a successful rainmaker. All of the new business comes from me, but I want to retire soon.”
Steve:
Right, exactly.
Megan:
And/or, even if they don’t want to retire, they just want to have some succession plan in place, but the generation two advisors are looking at them and thinking, “Well, how are you setting us up for success if 100% of the clients, or even 50% of the clients are coming from the founding partner? How is that a sustainable business?” We talk a lot …
We did a program this year called Invincible, which is, how can you really build a business that will last and sustain over time, and last and sustain beyond the founding partner? I truly believe the industry talks a lot about succession planning. I think marketing is the number one solution for succession planning. Build a marketing engine at your firm that is bringing in new prospects not related to the founding partners’ sphere of influence. Empower the second generation advisors to be able to build a business that will last far beyond the founding partner, and that’s where you’re going to get the most enterprise value out of your firm.
You know what’s really interesting, and I won’t go too deep into this, but clearly I’m passionate about it, if you look outside of our industry, outside of even financial services, most other sectors across the United States have realized that branding and marketing are the largest drivers of enterprise value to their businesses. If you contrast businesses today to businesses 40 years ago, businesses 40 years ago, their enterprise value was largely made up of tangible, physical assets. In today’s digitally driven economy that no longer exists.
Your value is placed on the relationships that you have with your clients, and that’s done through strong brands and marketing. I’m constantly talking to advisors about the importance of taking that concept that’s been proven in other industries and using it within the wealth management, independent financial advisor community, because it’s actually something that’s totally attainable if financial advisors just make the commitment to building their business into a marketing organization and not just a solo rainmaker organization.
Steve:
Well, right, in fact, even just building a business and not just having a practice, right? Because unless your business can attract clients on its own without the founder it’s not really a business, right?
Megan:
Exactly. Totally agree.
Julie:
It’s interesting, because we’re talking about these trends that are impacting advisors. We were interviewing someone recently, Megan, for the podcast, who was talking about different trends but said, “Look, this isn’t for everyone, and you don’t have to go there, but recognize that your business will be significantly challenged in future.” I think that’s what you’re talking about too. You’re talking about concepts that may feel foreign to some, but you’re right. Just look outside the four walls of this industry and you see what’s going on. At a minimum we’ve got to acknowledge that that’s what’s going on. It has to impact us at some level.
Megan:
Right. I think that financial services businesses just face difficulties because of that reality. They’re not naturally capable of bridging the gap between the financial concepts that they solve, and consumers’ ability to understand that. That’s really where marketing can play a huge role in effecting change. But you’re right Julie, if an advisor isn’t willing to acknowledge that this is an issue, and they just think, “Well, I’ve been really successful. The results are in the numbers. Take a look at how I’ve built this business over the years,” they’re not going to be able to take that next step forward because they need to acknowledge that this is something that’s actually critical to the future of their business and then invest in it.
That’s not something at FiComm that we can do. That has to be a chosen decision made by the advisor.
Julie:
Yeah, and on that idea of investment we were both just at the Investment News Best Practices workshop and they shared some of the current data that showed the average investor in their study at least, or advisor, excuse me, was investing about 1.9% of gross revenue in marketing. What do you think about that number? Where do you think it needs to be?
Megan:
That number makes me sad. It’s so low. The interesting thing about that data point is that it actually, the way that the question is phrased in the Investment News study is it’s, how much of your top end revenue do you spend on business development and marketing?
Julie:
It might be no marketing?
Megan:
Exactly. I think that because most financial advisors are primarily rainmakers, they’re showing expenses that are related to business development strategies and not necessarily marketing. I think if we were to separate those two, my guess is that the number would be below 100 basis points of what advisors are investing into marketing. That is woefully low.
Again, if we look outside of the advisory industry and you go across sectors there are plenty of studies that show average marketing spends. On average, sector agnostic, companies spend 12% of top line revenue on marketing. That number increases to more like 25% for technology companies. The lowest number, and this is a Gartner CMO study that’s done every year, the lowest sector spend on marketing is coming from manufacturing. We’re not even coming close to what American manufacturers are spending on marketing. If you think about the American manufacturing community, is that really the benchmark that we want to set for ourselves?
Steve:
Even if you look at that CMO study, just banking, finance, insurance, as an industry spends 8%.
Megan:
8%, that’s right. We’re, as an industry, we’re not giving enough – we’re not showing enough importance to marketing. That’s the first shift that needs to happen. What we say when we’re working with clients is anything up to 5%, spending 0% to 5% of top line revenue on marketing, that’s what we call maintenance mode. That’s essentially if you want to keep the growth rate the same within your business, if you are not looking to bring on new partners, if you’re not looking to expand, if you don’t have a future succession plan, you’re just looking to maintain a consistent business. Then 2% to 5% is really what you want to be spending.
If you are in growth mode, and growth can mean a lot of things. It doesn’t just have to be revenue growth. It could be if you want to grow your brand, if you want to grow the number of partners, if you want to grow the number of clients that you serve, whatever it may be, you really need to be spending more like 5% to 8% on your marketing. Then what we’re seeing is for leaders in the industry, for those firms that have made the commitment to marketing, because they’re seeing the success, they’re spending more like 8% to 15% of top line revenue on marketing.
Julie:
Can we talk a little bit about where that money would go? You started by framing the conversation with this need to figure out the narrative, and the brand infrastructure. If we make an enormous leap of faith and say that’s done, of course it’s not, but how can advisors then leverage that and use those marketing dollars to get the word out?
Megan:
Once you have that brand infrastructure in place, and you’re right, Julie, it’s never done, that is a consistent investment and effort, you always need to be thinking about your brand, making sure that it stays relevant, and make sure that you’ve got the components of your brand infrastructure which go beyond messaging … That’s really when you think about how you visually represent your brand, and how do you make it available to the public, website, basic social media profiles, making sure that your search engine optimization is working in your favor from your website, that the keywords and meta tags are set up the right way, et cetera. But then we see the bulk of that additional investment going into content creation.
Content is king today. I’m not the first person and certainly won’t be the last person to say that, but in today’s digital and mobile environment it’s really about, how are you elevating your status as a thought leader, a subject matter expert, getting that intellectual capital that you own in front of the right types of prospects? And It has to be a content based strategy.
We see the investments going into content creation and distribution. That’s where the bulk of our work is happening at FiComm Partners. Once we get the brand infrastructure in place we spend all of our ongoing efforts on creating content. That’s not necessarily the content the financial advisors are envisioning.
A lot of financial advisors have had experience, and success, in creating newsletters that go out to their clients, market commentary, or longer pieces about some financial planning topics, and that’s one way to look at content. We really think about every single medium of content that you can consider, and then we help our clients to choose the types of content based on their message and their target audience. It could be creating a blog. It could be creating videos. It could be doing a podcast, like you guys are doing.
It could be creating more snackable content pieces, so taking some of their longer form thought leadership and turning it into really digestible pieces of content that could be checklists. It could be questionnaires. It could be 5 to 10-slide slide shares, 3-page eBooks. There’s a lot of ways to create content, and to distribute content as long as you have a strategy in place, but that’s where we see the resources going, is to being able to create content, because in order to get to all things digital and social, which is that third step that I discussed earlier, you have to be very comfortable and have proven success in creating content.
You need to use the analytics that come out of content distribution to understand what’s resonating, what’s not resonating, where people are finding you, where people are engaging. If you don’t have that experience you won’t be successful with digital marketing or social marketing. That’s why right now, where the industry is, we’re spending a lot of our time working with clients on creating and distributing that content, and then building from there.
Julie:
Got it. It might sound like an obvious question, but to link it back to the idea of referrals, I assume that you see the content as a way to drive more referrals, because it’s shareable. Or do you think it impacts referrals in any other way?
Megan:
Absolutely. You’re the expert here. Both of you are the experts here, but I think that one of the best ways to be referable is to be trusted. I think that you can use content to engender trust. It’s by educating people on topics that are of interest to them, providing really specific ideas that resonate with your clients, that builds trust. If they’re leveraging that content, and perhaps they found you through that content, they’re likely to share that content.
I think that it’s an absolute compliment to being referable is, how are you sharing your intellectual capital? How are you exposing your thought leadership, and how are you making it really easily available. That’s where we really see the connection. I think it’s powerful to consider how referrals have built financial advisory businesses, and how advisors can use that trend in their favor, but really turbo charge it by also thinking about marketing in new ways.
Steve:
Megan, where are you seeing advisors having success in getting their existing clients to jump on that shareable content and offering it to other people?
Megan:
You know, we’re seeing success when it’s hyper relevant to their clients. I think that that’s sort of a common misperception is that financial advisors say, “Well, I don’t have enough time to produce content and it takes so much resources.” You don’t have to produce content every day, but you do need to produce content that’s hyper focused on your clients.
We find that for advisors that are producing content that speaks directly to their clients, and then theoretically the prospective clients’ pain points, that’s where it becomes much easier to share. There’s much more of an inclination, because if you can get one of your clients to connect with a concept, or connect with an idea, then they’re much more likely to share it. Then I would also say that distributing content through digital and social channels is a really easy way to track effectiveness. That’s what I love so much about digital and social, is for an industry that is so data-driven, and technical, and always looking for ROI, digital and social can show you very specifically which of your marketing efforts are working and which aren’t, which are producing leads. How are those leads coming through the funnel, and which ones are converting the most?
I think that the same concept applies to clients. You can use digital strategies, whereas you may have in the past just used Outlook to send a newsletter, or perhaps you’re still sending it via mail. You’re not learning anything from those distribution channels, so you might as well use digital and social to distribute your existing content and understand how people are engaging with it.
If you think that your clients love the market commentary that you send out, but you’ve switched to using an automated marketing platform and you find that not very many of them are opening it, then I would say, ask your clients. What do you want to read from me? What do you want to hear from me? They’ll probably tell you, “You know what? I just want to hear simple tips. It doesn’t have to be in depth. I’m actually not worried about the market. I trust you to make the right decisions when it relates to how my money’s invested, but I do often think about, what should I be doing about creating a financial plan for post-retirement,” or whatever it might be. I think that you can learn a lot through marketing to really empower your client experience, specifically as it relates to the type of content that you’re sharing.
Julie:
That is awesome. I’ve taken so much, I tell you. This is one of these interviews where I’m thinking this is wonderful for listeners, but I’m taking as many notes.
Steve:
Yeah, me too. I’ve got a whole pad full of stuff here.
Julie:
That’s double duty. Megan, thank you so much for your time. It’s been wonderful talking to you.
Megan:
Thank you Julie. Thank you Steve.
Steve:
Megan, where can people find you if they want to look up what FiComm is up to?
Megan:
FiCommPartners.com is our website, and there’s a connect form right on the home page. We would love to hear from anyone that has questions, or wants to challenge me on any of my ideas. I always love to hear that too. I’m also on Twitter and LinkedIn.
Julie:
Perfect.
Steve:
Great. Thanks, Megan.
Megan:
Thank you.
Steve:
Hey, folks, Steve again. Thanks for joining us on Becoming Referable. If you like what you have been hearing, please do us a favor and rate us on iTunes. It really helps. You can get all the links, show notes, and other tidbits from these episodes at BecomingReferable.com. You can also get our free report, Three Referral Myths That Limit Your Growth, and connect with our blogs, and other resources. Until next time, so long.