We get this question a lot from RIAs, and it reminds us of a story.
A man wakes in the morning after sleeping on an advertised mattress, pours himself a bowl of advertised cereal, drives his advertised car to the office, and asks his receptionist if anyone called.
“Only the newspaper,” she replies. “They wondered if we’d like to advertise.”
“No,” the man says. “Advertising doesn’t work.”
A few months later, when his business fails, he calls a realtor to advertise his office space.
So, we’ll ask you, does advertising work?
Dollars and sense
A Fidelity Investments study found that marketing accounts for 1.8 percent of the average RIA’s gross revenue. The Small Business Administration recommends businesses spend 8 percent of their gross revenue, so we have a long way to go. However, Fidelity also found that offices that increased their marketing budget from 1.8 percent to 2.4 percent—not even a full point higher—experienced 40 percent more growth in clients, 23 percent more asset growth, and 20 percent more revenue.
Back to our original question: is marketing an expense or an investment? The average person experiences in the neighborhood of 5,000 advertisements per day. Advertising once a day wouldn’t get much traction, and can therefore be considered an expense, as there would be little return on investment. However, repetition though a series of advertisements over time will most likely pay off.
No time like the present
What can you do today? It’s best to start small. Ensure your LinkedIn page is optimized. Examine your “foundation of marketing materials,” such as your website, brochures and pitch-deck. Are they elevating your brand to the level of expert? Are you proud to share them with plan sponsors, prospects, and trusted industry peers? What is your marketing budget (including both time and dollars spent)? Once you’ve considered these questions, think about where you want to grow your business.
Coca-Cola, Apple, and McDonalds still advertise, even though they’re clearly household brands. So does marketing work? Yes, it’s an on-going investment that builds your brand for future success.
About 401(k) Marketing
We believe the retirement plan industry can do better. Our clients are the best professional retirement plan advisors in the business. They care deeply about saving America’s retirement future. We are proud to share their voice through industry writings, professionally-designed brochures, and marketing collateral. We assist in promoting their businesses through referral networking and content marketing. 401(k) Marketing is a based in San Diego, CA. Check us out at www.401k-marketing.com.