For every fast-food television commercial featuring a supermodel eating a cheeseburger, on the back-end of that production is an army of analysts pouring over data. That’s because every bit as important as the actual creation of the advertisement are the measurements that determine whether that campaign has worked.

When it comes to measuring marketing effectiveness, sectors such as local investment advising have an advantage over national brands. That’s because measuring the effectiveness of your campaigns doesn’t require the accumulation of data from regions near and far. All you need is the right software, consistent data entry, and an easy-to-follow script for your office personnel and your analytics can clearly tell you whether your marketing dollars have been well spent.

Marketing Analytics Defined

Marketing analytics is the knowledge gained from the analysis of the data that is collected related to a campaign and, after that, it’s how that knowledge is used to shape future marketing decisions.

So what data categories should you examine, what mechanisms should you use and, finally, what should you do with the information?

Since you already know the cost of your campaign(s), the first step is simple: be ready when the phone rings. Whether your firm is comprised of 2 or 200 people, everyone in your office needs to follow the same script so that the data can be collected and recorded as consistently as possible.  

When a first-time caller phones your firm—even before you determine whether their portfolio meets your account minimums—the “golden” question that absolutely must be answered is: How did you hear about us?

Utilizing the Information

As long as first-time callers can provide you with an answer as to how they found your firm—even if that caller never becomes a client—they’ve provided you with an invaluable service by helping you determine if a campaign has been successful.

Whatever CRM (Client Relationship Management) software you use, it’s imperative that all information be accurately entered into your database. Your CRM is the “keeper” and therefore the organizer of your analytics. Once the information from a campaign is recorded, you’ll know how many first-time calls you received, how many made an appointment, how many became clients, and so on. With this information, you’ll be able to access data that not only determines the effectiveness of any individual campaign, but that can help you appraise your processes and the won/loss ratios by which you transition callers into actual clients.

Here’s an example of the analytics for a “Bring a Friend to Dinner” campaign for your Platinum clients (high net worth): You spend $10,000 to host a dinner at a local country club, encouraging invitees to “Bring a friend, but leave the children home.” 235 people RSVP, so your cost is roughly $42.55 per person. 195 attendees are clients (or their spouses), meaning that 40 attendees are guests of clients.

After two months you analyze the data related to the campaign: You’ve received 11 first-time calls from people who mentioned the dinner as their point of reference for your firm. Of those 11 callers, 8 had portfolios that met your account minimum. Of those 8, you see that 5 scheduled an appointment, and from that group a total of 3 callers with portfolios averaging $400,000 became clients. (Let’s assume you charge 1% of the assets you manage.)

Was the campaign a success?

While the “spend” was $10,000, the dinner produced 235 attendees, 5 first-time appointments, 3 new clients, and $1.2 million in new client assets.

This equates to $12,000 in new revenue for the first year.

Does spending $10,000 for $12,000 in new revenue seem a bit thin? First, consider the value of that additional revenue multiplied over ten (or more) years, and then add to that the value of a campaign that tells your highest net worth clients just how much you appreciate their loyalty to your firm.  

Conclusion

I’m often surprised by how little marketing most advisors actually do. One of the reasons is that fiscally conservative advisors understand the bottom-line outlay of costs, but because their systems and processes for analytics aren’t in-place, their enthusiasm for marketing seems to ebb more than flow.

With analytics derived from accurate data entry, you’ll never have to ask your marketing department “Was that campaign worth it?” You’ll know. Analytics make your marketing efficient and help you both select and stick with campaigns that work. That said, I continue to remind every advisor I meet that the shortest distance between them and sustained growth can best be achieved by walking a consistent marketing line.

 

Pat McClain is the co-author of Investment Advisor Marketing: A Pathway to Growing Your Firm and Building Your Brand (Irish Canon Press: 2013).He is a senior partner and founding principal of Hanson McClain Advisors in Sacramento, Calif.