You can flip the 80/20 rule in your favor by devoting your marketing resources to creating a referral network that will compound in value year after year.
While you may have created your own marketing plan with good intentions, I can tell you—based on experience with thousands of clients—that it's probably based on a faulty equation, one that concentrates dollars in certain areas (seminars, mailings, radio, and so on) and focuses on an outward, public push.
Don't get me wrong. I applaud the effort. After all, marketing is by definition getting people to raise their hands. Conventional wisdom says your goal is to get as many qualified people as you can to raise their hands, and then you allow your salesmanship to kick in.
But I believe that's a flawed approach. It's old-school. It's the proverbial 80/20 rule at its worst.
Let me explain. In a recent survey I undertook with 1,388 financial advisers, 83.4% of advisers reported spending 80% of their marketing budget on outbound marketing and advertising efforts. The remaining 20% of the money went to current clients. That may be how the financial-services marketing game has always been played. But it's a strategy that will not win in today's industry, because the larger firms will outspend you every time.
Is there a smarter way for you to market yourself? What if you inverted the equation and spent 80% of your marketing dollars on your current clients? Does that sound like a ridiculous notion? Are you asking yourself what your return could possibly be?
I'll tell you right now, your return will be great. What I'm talking about is refocusing your marketing dollars on creating a client referral program. Here are three key concepts for redirecting your marketing focus to increase referrals during 2006 and beyond.
1. Ensure that your existing clients understand the full scope of your services