The Multi-Tactic Marketing Approach: Creating a game plan for high-growth firms

While some advisors are content with maintaining a 'lifestyle practice' that allows them to generate enough income to support their lifestyle without feeling pressured to grow the business, many more advisors dream of steadily and strategically building their firm into a billion-dollar advisory business. A firm in growth mode isn't just more profitable; it's magnetic, drawing in clients, top talent, and potential buyers like never before. But here's the catch: growth demands strategy.

If you're serious about growth, it's time to sharpen your marketing game to attract those high-value clients you will need.

According to the latest Kitces Report, effective advisor marketing has become an increasingly complex and costly challenge. In the past three years alone (since 2021), client acquisition costs have skyrocketed 75% – with a median acquisition cost per client now at $3,800. This dramatic increase underscores the critical importance of adopting more efficient and innovative marketing strategies. I don't question Michael's study, but I would like to submit that while the costs appear to be rising, the lifetime value of advisory clients is still extraordinary. Moreover, the durability of the recurring revenue is attractive to driving enterprise value. Therefore, it's time to invest wisely and sharpen your marketing approach.

Industry data clearly shows that high-growth advisory firms invest more in marketing than their less growth-focused peers in the percentage of revenues (12.5% vs 9.7%), which translates into an even wider disparity in actual dollars spent when you factor in the generally higher revenue levels achieved by growth-focused firms.

These firms tap into an array of diverse marketing tactics, including client appreciation events, seminars and webinars, SEO, and targeted content marketing, to enhance the organization's visibility and attract/cultivate profitable clients. They emphasize scalable marketing strategies and optimizing the use of digital platforms.

Four pillars of a multi-tactic approach

While high-growth firms deploy a wide range of various marketing tactics to maximize their reach and efficiency, the Kitces Report identifies four foundational tactics that nearly all successful advisory firms share:

1. Client referrals—despite its scalability limitations, the vast majority (88%) of firms consider a strong referral network essential to the business's continued growth. As they grow, however, they tend to experience diminishing returns from referrals. My take is that building client advocates who want to remain engaged in helping your firm grow by providing more formal introductions is far more sustainable.
2. Content creation – high-growth firms extensively use blogs, videos, and podcasts to enhance brand visibility and engage potential clients by sharing valuable insights and wealth strategies. Remember that effective content creation requires a deep understanding of the target audience's needs and preferences.
3. SEO and digital marketing – Effective SEO helps significantly boost your content's discoverability by driving more traffic to your website. High-growth firms tend to invest more heavily in SEO and digital marketing, allowing them to achieve better marketing efficiency through improved organic search rankings and enhancing the credibility of the firm and its advisors.
4. Educational events – hosting periodic webinars and seminars will help to attract and engage high-revenue clients. Although, at times, expensive, these events can generate significant returns when promoted effectively through multiple channels. Educational events further position you as a subject matter expert, fostering trust and engagement among prospective clients.

Optimizing your marketing expenditure

High-growth firms differentiate themselves in their willingness to invest both hard and soft marketing dollars to fuel their prospect pipeline.

• Hard dollar expenditures are in the form of the tactics outlined so far and the cost of marketing technology and data analytics. Tools such as CRM systems, marketing automation platforms such as Hubspot.com, and data analytics software provide valuable insights into client behaviors and preferences, allowing you to tailor your marketing messages and tactics to better meet a target audience's needs.
  Marketing automation streamlines the process of nurturing leads through personalized email campaigns and targeted content delivery. CRM systems help manage client relationships more effectively, ensuring no potential leads fall through the cracks. And data analytics measure the ongoing effectiveness of all your marketing efforts.
• Soft dollar expenditures (including the value of advisor and staff time) account for 71% of all advisor marketing expenses, according to Kitces – highlighting the importance of dedicating enough human capital to your marketing efforts. Firms with dedicated marketing professionals, such as a Marketing Director or Specialist, typically experience higher growth rates, greater marketing efficiency, and more robust client acquisition outcomes due to their focused and consistent marketing efforts.

Did you know?

An SEC Marketing Rule, which took effect in November 2022, now allows you to use client testimonials and engage with third-party review platforms – provided you adhere to specific guidelines. It presents a significant new marketing opportunity to leverage positive client experiences to enhance your firm's credibility and reputation.

At the end of the day, it's all about providing an exceptional client experience and quality advice. High-growth firms prioritize client satisfaction and engagement – recognizing that clients who are confident about their financial future and who build trustworthy relationships with your team members are more likely to refer others, remain loyal, and bring their entire family to your firm. The most successful advisors focus on winning clients, and they master the whole client journey by ensuring exceptional service and quality advice at every stage.

Regular communication, personalized financial planning, and proactive problem-solving are all vital elements of creating a positive client experience. And you must seek out client feedback to continually improve your service offering and promptly address any concerns. At ClientWise, we've developed a highly effective model we call The ClientWise Conversation™ to help you with these critical conversations – focused on five key questions:

• What's the one thing you value most about how my firm and we serve you?
• What's one thing you'd like us to change or improve about how we serve you?
• If you were going to describe the services our firm and I provide you, to someone else, what would you say?
• How would you describe what we've achieved together during the number of years we've worked together?
• Among your other trusted advisors, who do you trust the most and why?

Never underestimate the importance of a strong brand

Branding plays a crucial role in differentiating you from your competitors. A well-defined brand helps establish trust and credibility, making attracting and retaining clients easier. Consistently, high-growth firms demonstrate a willingness to invest in building a solid and recognizable brand that resonates with their target audience by:

• Developing a clear value proposition: Ditch the pitch. This is not about creating a pitch deck or an elevator speech, but instead designing an outline of your capabilities and the benefits for clients
• Deliver consistent messaging specific to your target audience and demonstrate subject matter expertise. It will be more important for advisors in growth mode to stop focusing everywhere and laser focus on the ideal client within a niche
• Maintaining a professional online presence is crucial for building trust and credibility with potential clients

Assign a member of your team to evaluate your branding efforts, client acquisition costs, and ensure alignment across all marketing channels – from your website and social media profiles to your marketing materials and client communications.

Optimizing client acquisition costs is a foundational component of profitable business growth. By carefully tracking and analyzing your client acquisition costs (CAC), leveraging insights from industry experts like the Kitces Report, and implementing these strategic optimizations, you'll be able to attract new clients cost-effectively. The key lies in balancing marketing investments, enhancing client experiences, delivering great advice, establishing a strong presence and subject matter expertise, and continuously refining acquisition strategies to stay competitive.

Coaching Questions From This Article

1. Growth Strategy Exploration:
   - How can you refine your current marketing strategies to align more closely with the multi-tactic approach outlined in the article, and what steps can you take to ensure your firm is poised for sustained, profitable growth?
2. Niche Marketing Focus:
   - How can you laser-focus your marketing efforts to target a specific niche within your client base, and how can you develop and showcase subject matter expertise that will resonate with that niche?
3. Balancing Marketing Investments:
      - How can you evaluate and optimize your current marketing expenditures in terms of hard and soft dollars to ensure they contribute to the most efficient and effective client acquisition strategies?
4. Enhancing Client Experience and Engagement:
      - What specific actions can you take to improve the client experience at your firm, and how might this focus on client satisfaction and engagement lead to increased referrals and overall growth for your business?

About ClientWise LLC

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