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Dec 1989

How to reach personal financial planning clients through advertising. (Personal Financial Planning)

by Oliver, John

    Abstract- Advertising efforts to obtain financial planning customers should begin with defining the demographics of a target audience by considering the age, income and geographic area of the business desired. Direct mail is initially expensive, but it produces the most effective means for reaching a targeted audience. Direct marketing can also be used to enhance relationships with clients by introducing clients to new products and services. The most important element in direct marketing is obtaining appropriate lists for mail and telemarketing. Sources of mailing lists include: current client files; subscriber lists from publications; and membership lists of organizations. Those financial planners not working with an agency can contact a list broker or compiler.

The objective of effective advertising is to link your Personal Financial Planning service with the needs of potential clients with the result of getting a personal meeting with the prospects. An effective program must have a clear definition of who is to be reach and what is to be communicated. Matching the right target audience with the right message is the key to producing qualified leads with a high potential for conversion to actual clients and incremental business.

Establish Objectives

Start by defining the demographics of your target audience. Do not limit this only to age and income. Carefully consider the georgraphic area from which you wish to attract business. It could range from the whole nation to a specific zip code area. Characteristics like occupation, size of family, home ownership and educational background will be important in the choice of media or the message. Are the prospects likely to be self-employed? Is their current involvement with specific financial products a key consideration? These are just some of the factors to consider before you decide where to advertise and what to say.

Creating the message

How you wish to present yourself will very much effect which media and promotion vehicles are most suitable. Think beyond the general services normally associated with financial planning. Emphasize the benefits of your service, not just a description of what you offer. Remember that you are competing with both individual financial planners and large institutions. It is not enough to sell the need for planning. You should position yourself as uniquely as possible so you are diffrentiated from other providers and can be viewed as offering benefits that are not readily available elsewhere. While you may find it effective to employ material provided to you by suppliers of specific financial products, you should use such aids to supplement more proprietary communication. The more specific your message, the more effective it will be. Tailor it to the audience as much as possible.

Don't underestimate the value of continuity. Consider a series of communications to the same prospects. Frequency is often required to gain awareness and acceptance. The key to success is to have your message in front of a prospect at the moment he or she is considering a financial need. It is often impossible to predict when that will be.

Distributing Your Message

There are many ways to deliver your message, and the most appropriate will be determined by who you want to reach, the nature and complexity of your message and, of course, your budget. General advertising in newspapers, magazines or even on radio or television will reach a large audience efficiently. However, these media may not offer enough selectivity or ability to tell a complete story and may therefore fail to produce an effective rate of qualified response. Trade andprofessional journals have some of the same limitations but are more selective. Direct Mail can be expensive on the basis of cost per prospect reached but is often the most effective medium. Table 1 compares the general advantages and disadvantages of major direct response media.

Maximizing Response

One of the attributes of Direct Marketing is that it is measurable. You can determine the number of leads, the number of leads converted to clients and the cost to produce both leads and revenues. Programs can be repeated or alternatives measured against prior benchmarks. Before long you can have a model which can predict the return of your direct marketing investment.

Don't think of advertising solely as a method to attract new clients. Look for opportunities to use direct marketing to enhance the relationships you have with existing clients, and sell them additional products and services. Getting more business from your present accounts is one of the most efficient uses of direct response.

You should consider advertising (general media, direct mail or telemarketing) as a vehicle to invite prospects to seminar programs. These generally attract qualified prospects and provide a forum to communicate more detailed information than is possible through advertising. You will also have the opportunity to personally "close" the sale.

A sophisticated business executive described an excellent financial planning series of letters he received over several months. Each month he received a well-written and informative letter describing a specific financial planning subject. The letters encouraged him to think about possible problems or issues in these areas. The letters had come "cold" from a financial planner with whom he had not had any prior contact. Yet, what was surprising was that after the letters stopped, there was no direct telephone call by the planner to ask for a personal meeting and "get the order." You cannot assume that a prospect will initiate the call to you even if you have sent the information. You must bring it together by calling and referring to the steady mail program that you developed.

Perhaps the most important element in successful direct marketing is obtaining effective lists for mail and telemarketing. Your current client file is one readily available valuable resource. Others include subscriber lists which can be purchased in whole or in part from consumer magazines, business publications and professional journals. Additional sources include membership lists of various organizations, school and alumni associations, yellow page listing of attorneys, insurance brokers and other professionals.

If you are not working with a direct marketing advertising agency you may wish to contact a list broker or list compiler. Brokers can obtain lists which match your needs. Compilers usually have access to a wide variety of lists that can be combined on an unduplicated basis to meet your specifications. Brokers and compilers are listed in the Direct Marketing Standard Rate and Data directory which is available in many libraries. There are also listings in the Yellow Pages.

In summary, your prospecting efforts can be greatly enhanced by advertising, which can be an extremely cost effective tool. However, an effective program must be carefully planned ith very specific consideration given to who you want to reach, what you want to say and how you will deliver your message. It is an investment of time and resources that will be successful.

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