How much money do financial advisors typically spend on marketing? Actually, the other question I'm going to answer is how much should they be spending on marketing? I'm Samantha Russell from Twenty Over Ten, and today we're going to answer both of those questions. How much are advisers typically spending? and how much should they be spending to actually see ROI that will grow their business?
How Much Are Advisers Spending?
So I have a little graph here for you that will help us with these questions. So the average adviser our research and third-party research has found is spending about 1-2% of their revenue on marketing. And the interesting thing what you'll see here is that what they are classifying as marketing expenses are things like their website, their CRM, and live events. I'll admit that yes, your website and your live events are both marketing expenses but the CRM to me, that's just a business operation expensive. And so these are folks who are really really just doing what they've always done, tried-and-true practices, they're not in growth mode.
How Much Should Advisers Be Spending?
On the other end of the spectrum, what you should be spending on marketing and what growth-focused advisers are is about 4 to 10% of your revenue being put back to marketing. So, in this case, the growth-focused firm they're going beyond the website. Yes, that's included. But they're really really spending on two things: personalization and automation. Those are the two things that we know are going to propel your growth.So for personalization, they're creating custom content for their niche audience that is all about solutions that their firm provides for problems that their types of clients have, right? So if they're working with a lot of executives, they might have a lot of articles about executive compensation packages and capital gains taxes and things like that for instance. So producing content that's specific to your audience.The second thing is marketing automation technology. Spending money on things that will help you automate your processes so things don't slip through the cracks. You need a lot of content today and a lot of touchpoints for this to work. So to fuel your inbound marketing machine, whether you have a social media scheduler, an email marketing tool, something to help you manage landing pages, paid ads, all of that would be part of this. Additionally, separately a budget item for paid advertising, specifically digital advertising. So, you know creating a boosted post on Facebook or Instagram for instance. Wherever your audience is already hanging out, paying for ads in those spaces to get more visibility.
Now you might be on that 1-2% side of the spectrum and wondering how do I go about increasing my budget? Where should I put my money? What should I be spending at? We've actually created this sample budget for you. I know it's hard to get into the details, but we'll link it below.And this would be an example if you're making $250,000 in revenue and you want to spend 5% how it would be broken down over the year and what you might want to spend on. So I'll just go through it quickly here. In this example, we have $1500 allocated for the website. Which would be you know, that would cover your archiving, your hosting, the compliance, one-click compliance submission you need to get it approved, all that good stuff.The automation tools between $2400 and $3000. That would be all the tools to automate your workflows, make sure everything's integrated, keep you constantly posting on social media and getting those emails out.$2000 is set aside for events, whether it's a client appreciation event, or sponsoring you know a local nonprofit 5K anything like that. We also allocated $1000 for video and infographics. So whether you want to go online and hire a consultant or a paid by the hour person to help you with some video editing or create some one-time graphic. We know that those visual elements go a long way in helping people to resonate with your content and to find you online, so we've allocated some money for that.And then we've also put aside $3000 for custom content. Going back to my earlier point in really investing in creating content that is specific for your niche right. And then lastly $2400 for ads. So we create all this content, these videos. We have all this great content to share. We want to boost the visibility of that content.Resources used: https://www.dropbox.com/s/kuapwn11qib... https://www.dropbox.com/s/r39k70y0v0x...