“Fish in the Right Pond”

You aren’t advertising to a standing army; you are advertising to a moving parade.

David Ogilvy

It is important to understand the difference between a client, a qualified prospect, a lead and a suspect. There is also a lot of marketing math, ratios, and theory that comes behind that understanding.

Even otherwise sophisticated companies make these simple mistakes when it comes to knowing the who their clients are understanding the relative values of various types of clients.?For instance if one category of clients have an average life-time value of $100,000 and another category has an average value of $5,000 then it might be helpful not only to know that but to back it through all of your marketing channels. ?I have bounced my heads against the wall with plenty of big-name companies over this very subject. ?With companies who should know better and still make very basic marketing mistakes.

?They often give their advisors the equivalent of what used to be called the “White Pages” of “Suspects.” ??A prospecting list that is basically just a compiled list by income, profession, geography or some other compiled criteria.

?This is probably one of the most important things that any business owner, entrepreneur, or financial advisor can understand. You have to understand the difference between these different types of clients and the different levels of prospects that you may be encountering. This is really critical and life-changing/business-changing when you take the time to understand the differences and nuances.??We’ve all head that 80% or 90% of your income come from 10% or 20% of your clients.??90% of your headaches come from 5% or 10% of your clients.

The Worst Possible Marketing Strategy is Trying to Appeal to Everyone.

?I was reading a newsletter by a high profile “Guru” to financial advisors, he said: ?‘We are in a business where everyone needs our service.’ In my opinion, that is the worst marketing statement perhaps ever in the history of the world. It may be more or less true objectively, but it’s a really bad marketing strategy.

In actuality, you want most of the world to not even care that you exist. You want a chunk of others to be actively repelled from working with you.??Their nothing wrong with being polarizing as long as you are strongly attractive to your ideal clients.?You don’t need or want to market to the the entire world to be a very highly successful financial advisor. You must figure out who your perfect client is. ??How old are they.?How do they think???What’s their profession.?How do they think about their money and about retirement.?How old.??Is their a target race, gender, sexual orientation, life-style, predisposition.??Some people refer to that as your customer “Avatar.” ??Creating that profile of who you really want and will be a good fit with as clients is an essential exercise.??

?Clearly define your “Avatar Client” and focus 100% of your Efforts on that audience.

?Suspects are people who you think would make a good client, but you don’t actually know who they really are yet. Perhaps in “Facebook Speak” a lookalike audience of your current customer base, for example. ??That may or may not be a starting point depending upon how well you’ve done with creating your ideal clients already.??But, once you’ve really defined your ideal customer you want to go and find out where these people hang out.???At this point, they are not prospects, so to speak, but suspects.?A prospect being someone who’s “raised their hand” or shown some interest in your offering.?A suspect is someone who fits your target profile but has yet to express in interest (important distinction that we’ll discuss further in a bit.)

?Just to beat the point, mediocre advisors look to market to the ‘entire world’. They say that everyone needs them.?Many clients have told me exactly that in meetings. The logic is that if you market to everyone, the ones who need you will come forward. Not only is that expensive, inefficient, and basically impossible, but it is also rather foolish. The same people often make the mistake of seeing their customer base as a five-mile geography around their business. This is one of the worst errors to make in your marketing. ???As an aside, I’d much rather create a narrow niche of very clearly defined “Avatar” suspects that are targetable all across the country than to focus on a narrow geography.??It’s easy to maintain relationships from a distance with all of our modern technology and, gives you the ability to more effectively “speak their language” in all of your materials.

I understand the idea that if you cast more lines, you will be able to catch more fish. On paper, that seems as though it makes sense. However, what I would say is that you don’t see a salmon fisher fishing in every single lake, pond, river, and part of the ocean, do you? No, they fish in the areas of water where salmon live. They identify their targets, find out where they are, and market, so to speak only there.

?So, imagine you’re the fisherman. Where are the fish? Where are they biting? What lake or river is best? What are the best spots? What bait is working best? Even when you find yourself a lake, you need to know what kind of fish there are below the water. There are even apps and pieces of sonar equipment that can tell you this information these days. The same can be said of marketing.

?Understand the Difference Between a Suspect and a Prospect

?A suspect is someone who you have targeted and would like to be able to get interested in your offering.?Someone you have not yet attracted but are aiming to attract. As the great David Ogilvy once said: "You're not marketing to a standing army, you're marketing to a constant parade of humanity." What he meant by that is not that everybody in any geography is moving all the time, but their lives are changing constantly. People are getting married, getting divorced, getting a new job, receiving inheritance. Things are constantly changing. Perhaps six months ago they sensed their own mortality because their brother-in-law died.

?A story that my friend and mentor Dan Kennedy tells is that of him being a suspect for buying furniture.??There was a period where furniture stores sent him postcards, where he opened various newpapers only to see ads and/or inserts with various furniture sales.?He had no interest and ignored all.??Then one day he came home to find out that wife #1 had moved out leaving only a single chair and a cat.??Well, he went from having no interest in furniture to needing an entire home refilled with everything from bedroom set to a living room set.

?Now, whoever got to him next made a huge sale.??Hence the “moving parade.”?In this case a sudden divorce turned him from a disinterested suspect to a very valuable prospect literally overnight.?He went from ignoring all marketing related to furniture to paying attention to all.

?Every person has points at which they are immune to paying attention and points at which they are really interested. Sometimes you can predict these times. For example, if you sell cars, there is an itch cycle. You start marketing to them two or three years after they bought their last car because that is when most people opt to change. So, if you were a car salesperson, you would have a list of everyone you have ever sold a car to, making sure you get yourself in front of them after two years (well constantly but really focused on 2-3 years.) ???

?It comes back to the idea of the “Avatar,” the perfect profile of a suspect. It’s important to remember that maybe nine out of ten are going to be immune to your message at any given time.??Some of those within that 10 percent may already have someone providing the service that you provide, but that brings no guarantee they are happy or that you can’t convince them you are a better option. For example a study that I saw recently showed that 60 percent of people are unhappy with their current financial advisor.

?Nuture.??Communicate Often and in Interesting and Entertaining Ways.

?There’s a series of great books by Joe Girard who was the Guinness Book of World Records holder for selling cars for many years.??He sent a greeting card to every customer and prospect every month – forever.??Before long it was into the tens of thousands.??Obviously it paid off with record breaking sales, year after year.?I’ve dropped well over 6 figures on cars at several dealerships and frankly never heard a word once I drove off of their lot.?Stupid, really stupid.?The one guy who followed up – Hector – sold me a Jaguar XK-8, then a 911 C4, then a 911 Turbo and, almost landed a twofer by loaning me a Porsche Cheyenne while purchasing the Turbo then almost got me to drive home in a Ferrari after he moved dealerships.??The follow-ups, cards, checkins by phone, alerts when something came in that he thought I’d like, noticing that I was in for service (that’s how he flipped the 911 into a 911 Turbo…. Hey, Steve this just came in thought you might like to take it for a drive?).?That’s how you move from mediocre to excellent.

?In other cases, there may be an important life event that recently occurred, making them more receptive. Let’s look at an example of an attorney I worked with for awhile.

?As I explained before, sometimes these changes and these trends can be predicted. Sometimes, they simply cannot. Sometimes, as is the case with a client Iwork with who markets to divorced women, you know when and where to find your customers. For example, he gets mailing lists of recently divorced women and is able to start targeting them. Unfortunately, for a lot of businesses, it is not this easy or predictable. In these cases, you are going to market to your list of contacts, then market again, then keep marketing to them until they eventually wake up and pay attention. If you email them once a month for seven years, you may finally contact them just when they need your services and are willing to pay attention. They can then turn from suspects into prospects and these two types of clients require different types of marketing.

Let’s take a look at a different example, centering around divorce again. I’ve worked with a very successful attorney by then name of David Crum who owns has multiple law firms in different cities and deals with divorce – he even wrote a book called “Confessions of a Divorce Assassin.” He markets this book to women who have not divorced yet, but statistics show that some of them within a certain age group are thinking about it. He isn’t waiting until they file for divorce or until the divorce is complete, he is targeting when they are still just in the thinking stage. ?He runs ads where his target audience is likely to see it (and, few others,) so among others he can run ads for the book as a giveaway in places such as Facebook.

?He does this because he wants them to come to him first. After all, it is better to target them before they drain their bank accounts and start arguing about everything. So, how can he get their attention if they haven’t even filed for divorce yet? He can show them how to get divorced amicably and have money when they get done, rather than giving it to the attorneys. Then, he can work with them on that.

?After this, it becomes a matter of follow-ups, education, and development. The thing I find with a lot of businesses is that they do not differentiate between someone who looks as though they should be a client and someone who has actually raised their hand to say they are interested. And once someone does show this interest, they give up on them way too soon. This is where lead funnels or, nuturing comes into play. ?Of course, in order to avoid jargon, we all know that a funnel involves having a wide, open space at the top and a narrow neck at the bottom.

?Let’s say you have done some advertising to our “Avatar” suspects, it could be anything from LinkedIn ads, Google Pay-Per-click, Facebook to targeted newspaper inserts or targeted direct mail and now have this list of prospects. These people had not done anything with you in the past and didn’t know you, before they raised their hand for your intial offer. ?You have had no interactions before with them at all, they just meet your criteria for an ideal client and were targeted with what some would call “interruption marketing” and, then they “raised their hand” often by filling out a form online or perhaps texting or calling to take advantage of your offer.

?If we go back to the divorce example, it would be like having your list of people who have filed for divorce but have not actually gotten divorced yet. ?Or, better yet you got to them before that step.?These would be your suspects. Let’s say one of these suspects responds to something online, or calls you, or comes to an event of yours. Somehow, you now have their information because they have contacted you. That changes them from a suspect to a prospect. They have moved down the funnel. That is the shift from being an ideal suspected client who does not know you to someone who has responded to you and is aware of you. That shift is huge. As they reach this point of the funnel, they could be ten or one hundred times more responsive to you. You can now spend time and money on these people.

?Get Inside the Conversation ALREADY Going on in their Head

Using a Dan Kennedy example, almost every state in the US sells your driver’s license information. So, we are talking, name, mailing address, gender, height, weight, and a bunch of other details. A weight-loss business can purchase this information, calculate the BMI of a list of people and then target people of a certain height and weight. They then have a ready-made mailing list of suspects who should be good clients on paper. However, this may completely fail. ?As it has repeatedly when tried.?

You may be wondering why. After all, the business owner knows their gender, their BMI, their location, and they are in need of the service the company is providing. However, the one thing the business owner does not know is whether they care. Do they have any motivation to lose weight? Are they looking to? Are they willing to pay attention?

What you can do is purchase a response list. This is when people run infomercials and ads for things like exercise equipment and record a list of potential clients who reach out and show interest or purchase a related product. ?Other businesses can then purchase this list of responsive people to target for their own marketing campaigns. Or you could go after people who are buying a rival or similar product and market to them directly. Or you could get both of these lists and combine them in a single overlap list. Then you can isolate the people who are looking for both of those things. Compare this list of actively interested people to a list of suspects who are merely in the right BMI range, the difference is night and day. They may have met the stereotypical characteristics of your average client, but that brings no guarantee they will want to lose weight.

?Don’t Market to Vegetarians if you Own a Steak House.

?Another example. say you wanted to open a high-end steakhouse and were looking to target potential clients. You could go to someone like Amex and ask for anyone who has dined at that level of steakhouse or higher over a certain period of time. If they paid using their Amex card, you could essentially compile a list of all your competitors’ customers. ?Or, you could buy the list to a Magazine Subscriber base such as “Wine Spectator.”??This type of marketing and data collection is very common. As a business owner, you should be in favor of this because it can help you to market so much better and only market to people who are very likely to be interested, unless of course you’re the steakhouse where the data points originated!

?The big mistake in this example would be to draw a mile or four or five mile radius around the location and just market to everyone.??You might be hitting low income apartments, retirement homes, and industrial offices as well as likely suspects.???A lot of waste.??Maybe you could “Every Door Direct” to the folks in the gated community on the Golf Course, but even that may or may not be a narrow enough target.??Perhaps really you want the C-Suite executives of all of the large employers, if most of your traffic is business meetings, client entertainment, and so forth.?Good to know.??Important to target.

?"Don't count the people you reach; reach the people that count." David Ogilvy

?I will go over this in more detail in a future chapter, but it’s about building something that is appealing to your potential clients.?Often that’s called a “Lead Magnet.” ??Perhaps you offer them a free, helpful newsletter on retirement or college planning. ??Or maybe you can ask them to register for an interesting live webinar or pretend a live event (pre-recorded “evergreen webinar.)??Perhaps you offer them a free book. ?Notice commercials on TV for reverse mortgages and others offer a free DVD and Information package, same idea.??I was listening to news on Sirius XM and they asked me to call their voice mail and leave my email for their free report.???

?Unfortunately, most offers fall extremely short when it comes to having a reason for them to “raise their hand,” and most websites are little more than a digital brochure. There are plenty of common mistakes to avoid – I cover effective website development in a separate chapter.

?“Sequential Auto-Reponders” and, forever “Nurture”

?What you are looking to build is a sequence starting from when they raise their hand. Once this happens, you need to keep two ideas in your mind, even though they may seem to be contradictory. One is, they may be ready to buy today. Two is, they may need to be educated for as long as necessary in order to secure the purchase. ?That may be a week, months, sometimes even years.

?You need to be prepared for both of those scenarios. Just because they have responded today, does not mean they are ready to buy today. They may not even be ready to move forward and book a meeting or anything. But on the other hand, if they have raised their hand today because they want to buy today, you need to be ready for that and contact them immediately.

?Plenty of businesses I work with use landing pages that generate visitors from Facebook, LinkedIin, Google, or some other source, they ask a couple of questions, and then try to set up a time for a meeting. While this is effective for those who are looking to buy immediately or have a meeting immediately, especially if they are a referred prospect.???It won’t be effective for those who are not ready, who are just researching.??And, even if they are ready to take next steps you want to capture their contact information so that you can proactively follow-up and not hope that they are going to contact you.??

?No matter how you package it, even if you ask to set up a meeting just to give them some free advice, the client knows you are setting a time to try and sell them something.

?At the top of your funnel, there may be a few people who want to meet with you and are ready to do that, but only a small percentage. By all means, market to them and meet with them, but do not expect everyone to be ready to buy today. Other people may be willing to take some free information from you and, because of that, become open to meeting a little later. Others may take the free information and then get some extra follow up information in the near future. Others may leave it a long time, years even, before they are ready to do business. Ihave seen people come back nine years after the initial contact!

?Advisors make the mistake of putting all their eggs in their ‘here and now’ basket, only concentrating on the people who want to buy today. In actuality, the second two groups are just as important because, if you market to them in the right way, they will still buy from you in the future. Only marketing to immediate customers is a huge mistake.

?I look at what were likely really expensive websites on a daily basis and they have really neat scheduling links, allowing potential clients to set up meetings whenever they want. Yet, the only call to action is ‘contact us’, followed by a number or an email. The assumption here is that the website is going to do some of the educating for you and people are going to browse it for hours on end. In reality, the clients are either jumping to the end to book an appointment, or even if they have a free report, the education follow up just is not good enough. The business misses out on so many potential customers this way.

?To add to all of that don’t forget that most of them are looking at your website on their IPhone or Android phone.??Perhaps while waiting for their dentist appointment or while getting their hair cut.?

?You likely have fleeting attention, and without follow-up lead capture and follow-up they’re gone, likely forever.

?You must recognize that a customer’s time should be worth a huge amount to them and most people cannot be tempted by a free “salespitch” meeting before being nutured and educated. Getting certain most people on the phone is like pulling teeth, so you have to market accordingly. They will take notice of you when they need your services. It is your job to keep marketing and make sure you pop up just when they actually need you. After all, they will only buy when they are ready to buy.

?In order to keep these people on board, your website needs to give them a reason to raise their hand. That falls short of ‘give us a call today’ or ‘book an appointment now’. But it shows they might be interested at some point in the future and allows you to keep in touch with them. You also want different educational material that is not going to teach them how to do it themselves, but it's going to teach them why you're good at what you do, what you do, and how that works. ??Said a different way, teach them “What to Do,” but not “How to Do It.”

?Then, you want to be able to drip on them forever. And we’re not talking about just promotional emails, ?but by sharing quality ?information preferably through direct mail, text, email, retargeting and even by getting them to subscribe to your Blog, Podcast, and YouTube Channel.??All efforts designed to build a relationship and educate until they are ready to make that next step and book an appointment with you. When I say ‘forever’, this is not a cumbersome or time-consuming activity for you. It’s should all or mostly be automated. It’s just about keeping your hook and bait in the water until they are eventually ready to bite.

A reminder, these people are your avatar prospects. These are the ones who meet your criteria. They don't know you, but once they do, they start being part of your world. Then you can start spending money and time on them. A client might be worth an initial $5,000, and they might be worth $50,000 over their lifetime with you as a client. As such, you could send them $25 worth of direct mail, a box of stuff, a holiday card, or whatever else you think might help to earn their loyalty and trust. It’s the classic spend money to make money argument. If you could buy loyal customers who spend $50,000 with you over a lifetime for just $25, $250, or $2,500, you would do that all day long. ??It’s important to know your Return on Investment on everything you do which means you’ve got to a minimum know what the immediate value and life-time value of a client is likely to be and keep track of how much you spend to get a prospect and to get a new client.

?There are all kinds of things you can do, but you can start to spend more money on them once they are in your world, once they go from suspects to prospects. Let’s use the divorced example again, if you were aiming towards divorced women between 45 and 55. You would not have the time or money to spend cash on every single suspect in the world. It simply would not be feasible. If weight loss companies sent direct mail to every woman that was over a 31 BMI, they would go broke, because the response rate would not be very high. But once the suspects responded to some marketing the business put out there, and they knew they were interested, then they could start marketing to them more and sending direct mail pieces. Now they could have outbound telemarketing going to them and all kinds of other stuff. Suddenly, it would be well worth their time and effort and money because the suspect has shown they care, thus becoming a prospect. That’s why it is very important to know the difference between suspects and prospects and what you can do to market to each of them differently.

?Know your “Marketing Math”

?Let’s say you are advertising on LinkedIn, Facebook, with direct mail, and Google AdWords.?You need to know what your cost is per click (or, visitor to a webpage) and what your conversion ratio is from click to lead. In these cases, the potential client has likely filled out some kind of form. Maybe they shared an email address or a phone number, and then a mailing address and some demographic information. You have to decide at what point you have enough information, and the person becomes worthwhile to you. You need to know how much the click costs, how much the prospect costs, which is an easy calculation if you know what your conversion ratio is. You should know what each client and appointment costs you and you cannot know that without a conversion ratio, so that is incredibly important.

?You also need to know if they become a client how much they are going to spend immediately? How much are they going to spend with you in the first year? How much are they going to spend with you over their lifetime? Michael Kitces uses a good example, in an excellent report that he published on his blog about Advisor Marketing based on large scale survey results, with the figures, $500,000 assets under management, 1% fee, $5,000 a year, a lifetime average of 20 years, and therefore a lifetime total of around $100,000.

?If you know their lifetime value is $100,000 and you know the first year is $5,000, then how much are you willing to spend to secure a client? How much are you willing to pay to secure an appointment? How much are you willing to spend to get a prospect? How much are you willing to spend to get a website visitor or a click? If you were going to get $500,000 worth of assets from one client, $5,000 in the first year, would you be willing to spend $500 or, $1,500 to get them in the first place? I would take that all day long. Unfortunately, too many advisors look to the short term and tell themselves they cannot afford to spend $250 $500, $1,000 on a potential client. The truth is, you will get that money back and a whole lot more if you secure just one. ??Assuming you know what your life-time and near term value is per client.

I understand the reluctance to spend that kind of money on a suspect because you don’t even know if they care yet. But once they raise their hand, especially if you have significant information about them then the dollar amount of what you are willing to spend on them should increase dramatically because the likely closing rate at this point is much higher. Again, that is why it's really important to know the difference between “Avatar” suspects, leads and highly qualified prospects.

?If nothing else play prospect at smartasset.com or www.fisherinvestments.com tbecause they are very good at asking enough questions to get to an idea of the quality of the prospect. They can find out how relatively series a prospect is about moving forward now, sorting out somebody who is not worth spending the money on, somebody worth spending a little bit of cash on, and somebody worth spending a lot on.

?Knowing that kind of information is not only invaluable, but it also gives you a little peace of mind. Just remember, there is a big difference in value between somebody who is just in the general public, versus someone who very narrowly fits your target audience, versus someone who actually raised their hand.

?As an aside – ANYONE Serious about significant success should “Play Prospect” with any and all “Players” in the Industry.

?With the general population of the United States, each suspect is not worth very much at all. However, the more data you get, the more valuable a narrowed list becomes. If you find out what they like to buy, what income level they are in, how old they are, where they live, what gender they are, etc. All this data allows you to figure out whether they are a qualified and likely suspect who’s likely to respond to an offer. ???It really is the secret to Multi-Billion Dollar profits that Google and Facebook rake in.??Their value is in the combination of “eyeballs” and VERY detailed information about their users.?Thus they are very good at putting offers in front of the users that they have a predisposition to respond to right away.

?But the real turning point is when a quality prospect (qualified as you’ve defined your target Avatar client) raised their hand and said, "Yes, I'm interested in what you have to offer." That is when you really start to market heavily to them for as long as it takes until they want to invest in your services, even if that means years of contact. ?Of course you have to track ROI at every point, but the mistake is more often to give up to early and to try to follow-up on the “cheap” rather than through multiple media.

?Keep in contact, educate them and be ready to convert them into a client as soon as they are ready to take that step.

?Remember, a suspect is someone who has not shown whether they are interested or not yet, they just fall into the category of someone who ‘should’ be a potential client. A prospect is someone who has raised their hand to indicate they are interested. Marketing should change as soon as that hand is raised assuming they are qualified.

?To summarize, the big mistake that most advisors make is to assume that “everyone” needs their services.??While it may be objectively true, it’s a horrible marketing approach.?There are very good reasons to niche, to narrowly target market, and to be really clear on your target client “Avatar.”????To make it simple, growing your AUM and being an effective Wealth Manager is pretty tough if you only attract broke people.??Now I know that much is obvious, but by watching advisors market it’s pretty clear that even the ones who do step up to the plate and aggressively advertise haven’t thought much about who they want to attract.

?Next is there’s a big difference in assuming based upon a given set of criteria that someone would be a good client versus getting them to “raise their hand” and express at least a bit of interest.?Once they’ve expressed interest you’ve got to BOTH get to them IMMEDIATELY to move them forward to a meeting AND, nuture them (educate, entertain, engage, remind them of their interest) essentially forever (or, at least until the ROI dips to negative.).?And, by the way I don’t mean just email them forever, multi channel continuous communications.