As the financial services world continues its slow crawl into the digital age, boutique asset management firms and mutual fund companies are facing new challenges in marketing and growing their businesses. Many firms have reached a critical juncture in their marketing efforts where they must decide between what is easy and inexpensive but no longer effective, and what is more expensive and more difficult to implement but more cost effective in generating quality leads and converting them into qualified prospects. In the digital age, that will be the difference between firms that are forced to exit their businesses and firms that survive and flourish.
Is Email Marketing Becoming Obsolete?
An obvious case in point is email marketing. Don’t misunderstand – email marketing is still an important marketing strategy. The idea of sending a series of communications to prospects over time to build familiarity and become top-of-mind so they will contact you when the time is right (also known as drip marketing) is still a valid concept. It became almost indispensible when printed mailers and newsletters were replaced by email, which drove costs down to a negligible level. If you aren’t doing anything else, you should at least be doing email marketing. But, can you say that it is effective?
Email marketing is a big advancement over traditional drip marketing done through snail mail. In addition to lower costs and greater efficiencies, your email marketing system can provide feedback – primitive as it is – such as how many individuals opened your emails and what link specific subscribers clicked on.
While you know who is opening the once a month email and who is engaging in your email blast, you don’t know anything else about the individual. For example, does he engage in your content beyond the email blast during the rest of the month? Does he visit your website on his own? If so, how often and which pages? Does he follow you and engage with you on LinkedIn or Twitter? What investment professionals from other companies engage with your online content – maybe even on your website – that you don’t know about yet?
You can’t answer these questions so you continue to send more emails in the hopes that one will trigger a contact with you – like shooting in the dark.
Marketing Automation: Email Marketing on Steroids
As you can imagine, nothing stands still in the digital age. Three years ago you would be considered a marketing dinosaur if you weren’t doing email marketing. Today, you risk marketing obsolescence if you are not engaging in digital marketing, which takes advantage of all digital channels, including your website, social media, email marketing and the search engines, to push targeted content out and pull qualified prospects in. At the core of a digital marketing strategy is marketing automation, which has been described as email marketing on steroids.
Marketing automation is recognition that, in the digital age, individuals are more empowered than ever. It used to be that marketers would devise the message and push it out to anyone who might buy their product or service. With the advent of the internet, individuals not only control the message, they determine what information they receive, how and when they receive it, and how they will respond – if they choose to respond. Any information that reaches them any other way is now treated as a nuisance.
How Marketing Automation Works
Instead of blindly blasting out solicitations to the world, hoping for a 15 percent open rate, marketing automation seeks to drive new leads to your website, capture those leads, convert them to prospects and track them along the way – by giving your audience what they need and when they need it. The information collected through marketing automation enables the firm to make educated decisions about what content to create, where it should go, who is engaging with it and how effective it is at converting leads into prospects. Because every activity is tracked – from emails sent to lead generation to lead conversion – a marketing automation platform provides ROI data that enables you to make more intelligent decisions about the application of your limited resources.
Marketing automation teaches you how to hone the message and deliver it based on the behavior of the financial advisors who respond to your email or request information from your social media site or website. The process of cultivation is now defined by what interests the advisor, allowing you to provide more value to his digital experience.
Once a lead is activated, you can see how the advisor is engaging with you across all of your digital channels. You will know when he visits your website and what he does when he’s there. With each action taken by the advisor, your marketing automation system has a prepared response that is automatically sent to keep the conversation going.
You can then begin to segment and score advisors based on their level of engagement. When an advisor reaches a certain score level, he may be ready for direct contact by your sales people. Your sales people will have a 360 degree view of the advisor, including a complete history of how the advisor has engaged with you and what interests him.
Marketing Automation for Client Retention
How about your existing clients? Do you want to know how or if they are engaging you? A marketing automation platform tracks your current clients so you can see if their engagement is growing or slipping. An advisor who used to be really active with your content but is no longer may be ready to leave and take his assets with him. Marketing automation can produce reports showing you who the biggest movers are – up or down – during a period of time so you can adjust your message and your level of contact appropriately.
Focus on Results
Marketing automation is all about analytics, to know who is engaged with you 24/7 across all channels and creating an automated flow of the right “next steps” to keep them engaged until they become a client. Whereas email marketing is really nothing more than checking the box (i.e., getting that next blast out by Friday), marketing automation is about results. Are you increasing the number of people who are engaging with you on a regular basis? Are you increasing the quantity and quality of your leads? Are you better able to predict who will become clients in the future and which of your clients may leave based on a pattern of behavior?
Implementing Marketing Automation
Unlike an email marketing system, which is nearly as simple as plug and play, you can’t buy a marketing automation platform and have it automatically working for you. Implementing a fully functioning marketing automation system takes time. The users need the technical background, discipline, and an understanding of marketing automation to derive the maximum benefit from it. You also have to be able to create a constant stream of high quality content, which is how you engage your target market.
The good news is that a marketing automation platform creates repeatable processes. Once set in motion, a process is adjusted over time to until it achieve optimum results. The system steers the process, helping you to continually fine tune your content strategy and conversion strategies while measuring what’s working.
If that sounds overwhelming, it can be. You don’t want to over think it and you don’t want to over buy initially. Many asset managers who have switched to marketing automation are unable to utilize 90 percent of its capability. The larger firms have the resources to install a dedicated unit in house, including a full-time digital marketing person to run it. Smaller firms can do it if they build it in layers – starting with just the basics and learning from the analytics. If you already use email marketing, the next step is to automate – one campaign at a time.
You may want to consider hiring a professional who understands digital marketing and all the moving parts of marketing automation. Alternatively, you can achieve instant scale by partnering with a marketing firm that truly understands your business and that can help you think strategically.
The initial cost of marketing automation can be higher than a Constant Contact or Mailchimp email blast subscription. But, for boutique asset managers and mutual fund companies that want to engage with financial advisors, it’s time to start thinking about meaningful results and less about your open rate. There was a time when email marketing was an essential marketing tool for generating leads. In the digital age, information provided through marketing automation is the key to optimizing results.
Dan Sondhelm is CEO of Sondhelm Partners, a firm that helps asset managers grow. He can be reached at 703-597-3863.