You're listening to Financial Advisor Marketing, the best show on the planet for financial advisers who want to get more clients without all the stress. You're about to get the real scoop on everything from lead generation to closing the deal. James is the founder of TheAdvisorCoach.com, where you can find an entire suite of products designed to help financial advisers grow their businesses more rapidly than ever before. Now, here is your host, James Pollard. [00:31.7]
James: What’s up Party people? Financial advisors, this week, I want to talk about competition. Competition can be a great thing. I frequently said that you should be competing with the person in the mirror and I believe that 100% A lot of people make the mistake of comparing their first day with someone else's 10,000 today, you can't do that. Your goal should be to hit the pillow each night better than you were when you woke up. If you can do that, you will have an incredible life. And this doesn't have to be within business either. You can become physically stronger, faster, more flexible. You can learn something new, you can acquire a new skill, make a new connection, build a stronger bond with your family. Whatever it is you're competing with yesterday's version of yourself. However, that's not what I'm going to talk about in this show. And it's not what I'm referencing in the title of this show either which should be something like financial advisors should fear this competitor. [01:29.0]
Some of you might think that I'm talking about robo-advisors. I've gotten more questions about robos in the past few months, that I've gotten in years. And typically, these questions are rooted in fear. These advisors are so worried that somehow the robo-advisors will rise up and crush the financial services industry with their digital fist and like take over the world, terminator style. I don't see it happening. If anything, I believe robo-advisors will help financial advisors or human advisors, I should say because they will do several things. First, they will make the public aware of various financial topics. And some of these people were going to search for human advisors along the way. Education, awareness, whatever you want to call it is a good thing. [02:12.3]
Because for example, if people are aware that IRA accounts exist and then you have Roth IRAs, and then you have taxable accounts in different buckets strategies. If they're aware that that's a thing, then complexity comes with that. People realize that they don't have all the answers. It's one of those things where the more, you know, the more you realize, wow, there's a lot I don't know. And your awareness just increases. So, like there's marketing stuff now where I'm just like, whoa, I need to know this stuff. There's so much that I can learn that I can capture. And that comes with any topic, right? So as the robo-advisors are creating content and putting themselves out there into the universe, people are going to look for human, financial advisors all along the way. Second, they will encourage people to save money and as account balances grow, people will be more likely to hire a financial advisor. And third, their proliferation will create a demand for financial advisors to help people understand how various financial tools fit into their lives. [03:13.6]
Financial advisors will be like the people who help put the puzzle pieces together. Robo-advisors can be very good at the task at which they are assigned. For example, you have Tax Loss harvesting, Wealthfront, Betterment, they are incredible at tax loss harvesting, they are very, very good at that. But what they're not good at is helping people understand, does tax loss harvesting makes sense? When should they use tax loss harvesting? How does it fit into their overall strategy? So does this mean that you shouldn't fear robo-advisors? Well, not so fast because robos are gobbling up inbound leads at a frantic pace. For example, I used an advertising analysis tool to look at some of the wealth funds ads, and I like Wealthfront. I really appreciate them as a company, I think they're doing some cool things I am in and admire from afar and their marketing is pretty darn good. [04:07.3]
And when I looked at their ads, what I found scared me, because I discovered that they were running 27 different ads on Facebook and nine of those ads had been running for 10 months straight. And the only reason a company would run an advertisement for 10 months without turning it off is because it's working. And as a marketer who has examined thousands of marketing campaigns, it's a safe bet to say that their ads are working. I see the stuff, I've seen the stuff that works, I've seen the stuff that doesn't work and I, I have like this pattern recognition where I can recognize the winning ads almost immediately. And I'm pretty darn good at it. Obviously, nobody can have a 100% success rate because there are things that even shocked me that surprised me, but I I'm fairly good at this thing. But these winning ads I'm talking about from all front, they're not sending people to the investment products. They're actually sending people to their cash account signup page. But you're a fool, if you don't think Wealthfront will do everything in its power to convert those users. [05:11.6]
The cash account is nothing but a Trojan horse designed to get people in the door. So don't get too comfortable. They are pushing that cash account hard now, but once people are using the cash account and they, they come back and they see the features and what Wealthfront can do for them and how far I can invest their money, they're more likely to sign up. And in a previous newsletter issue, the James Pollard inner circle newsletter, which you can sign up for that over at TheAdvisorCoach.com/coaching. I included a bonus titled ‘Lead magnets that win,’ which broke down the exact lead generators are America's largest RIA is used to get more clients. And one RIA is free download, which was a sleepy little PDF guide that literally anybody can create. It generated thousands of weeds in the year, and it is still running today. And not only did I show the lead magnets, but I am unveiled the specific advertisements they used, how much they spent on those ads and where they sent their traffic. That's one of the perks that you get as an inner circle member. It's one of the bonuses which can force the newsletter to pay for itself with just one issue. [06:16.5]
I mean, in perpetuity literally, you're just paying where the newsletter is paying for itself at that point. And you can subscribe over at TheAdvisorCoach.com/coaching. Now, if I'm not talking about you as the competitor, you should fear. Well, am I talking about robo-advisors? I mean, I've spent the past couple of minutes talking about robos, like Wealthfront and betterment. No, I'm not, actually, I'm not talking about that either. I'm talking about a little something called indirect competition. And us marketers like to categorize competitors in two ways, direct and indirect. [06:51.5]
Direct competitors are businesses that sell a similar product or service in the same category as you. These are the competitors that people tend to think about when talking about business competition. So, if I say who's competing with McDonald's, you're probably going to think Burger King. If I say who's competing with AutoZone, you might think of Pep Boys or Advanced Auto or oh, oh, oh, O’Reilly Auto Parts. What a, what an annoying ad, but they do their job because they got me to sing the darn thing, the jingle on here, Verizon versus AT&T businesses like that. Those are direct competitors. McDonald’s sells hamburgers, burger Kings house hamburgers, Advanced Auto sells auto parts, AutoZone and sells auto parts, Verizon cell phone service, AT&T cell phone service. [07:36.1]
Indirect competitors are there businesses that sell a product or service in the same category, but it's different enough to act as a substitute for the product or service. That's the technical definition, but let me just break it down for you so you can understand. So, if burger king is a direct competitor of McDonald's and indirect competitor of McDonald's would be Subway, Subway doesn't sell burgers, but it does sell food. Chick-Fil-A would be another indirect competitor of McDonald's because last time I checked Chick-fil-A does not sell hamburgers, but they do so food. Or it would be Verizon versus social media, we're getting a little broader here. Social media does not sell cell phone plans, but it does sell communication. And it worries me when I see financial advisors focus too tightly on direct competitors. I know that like it's cool for financial advisors to work together and share ideas and join little mastermind groups and they come together at conferences or whatever. I get that, I love that, I love the people who are collaborating. I love the people they're spending time together. But at the end of the day, you're competing. Like let's just call a spade, a spade you're competing. [08:39.0]
But the financial advisors will focus too much on just other financial advisors. And they will fool themselves into thinking that they're only competing with other financial advisors and that's not true at all. The direct competitors to, or the indirect to financial planning and financial advising, they're a little bit more abstract because you're not really selling the financial plan, you're selling what the financial plan does, what it provides. Let's say you're in the business of making people feel comfortable and secure. I mean, that's what it is. A financial planning, this is a large part of what you do. It's a good feeling, knowing that you're on track to retire when you want. I mean, think to yourself right now, would you say that's true? Would you say that you're in the business of making people feel secure or giving them a sense of comfort? Would you say that's true? Answer me in your head. [09:31.4]
Hey, financial advisors – if you’d like even more help building your business, I invite you to subscribe to James’ monthly paper-and-ink newsletter, The James Pollard Inner Circle.
When you join today, you’ll get more than one thousand dollars’ worth of bonuses, including exclusive interviews that aren’t available anywhere else.
Head on over to TheAdvisorCoach.com/coaching to learn more. [09:53.9]
If you said yes, and you accept this as true, you must also accept that you are up against some pretty scary indirect competitors, because you're selling comfort. That is the product just like McDonald's is selling food. You're selling comfort, you're selling security. And comfort and security can come from a lot of places. Perhaps the scariest indirect competitor that you have is inertia. An object in motion, stays in motion unless acted upon by an unbalanced force. And as crazy as it may seem hiring a financial advisor may be uncomfortable and probably is uncomfortable to your prospective clients. They want to continue what they're doing, because what they're doing right now is comfortable to them. You must be the unbalanced force that convinces them to switch from one form of comfort to another and the path from one comfort to another is through being uncomfortable and good marketing can do that. Good marketing can convince people to be uncomfortable, at least for a little while. [10:56.8]
But let's zoom out even more. We're going to go even more abstract, past direct competitors, past even indirect competitors. I would say that your competitors include all businesses that give your clients an experience they now view as standard. This might seem like a silly example, but think of air conditioning. When the first air conditioners were put in shops, how long do you think it took before people expected them to be there? Probably not long, right? I mean, if it's a hot July day and you're faced with two different Costco’s in your area, one has air conditioning and the other one doesn't, you're probably going to go to the Costco with air conditioning. Air conditioning, it doesn't necessarily improve the bottom line, in fact, businesses pay out the wazoo to cool their buildings with people coming in and out of the doors, but they must have that air conditioning. They must keep things cool in order to stay in business because you wouldn't go there if they didn't have air conditioning. [11:54.9]
Another example is the coffee machine you probably take for granted whenever you stay somewhere, maybe you're at a conference or you're on vacation and you use that little coffee machine in there. There was a time when that was a competitive advantage. There were only a few hotel rooms or hotel chains that had these little coffee machines, but the industry quickly adapted. And now it's standard. The auto industry is littered with examples like these. Have you ever wondered why cars cost so much now compared to a few decades ago, even when adjusted for inflation? It's because of all these bells and whistles you've got, you've got Bluetooth, backup cameras, touchscreens, and more people expect these things. They expect the safety features. They expect the little comforts, the creature comforts in their vehicles. [12:39.1]
Here's the question I want you to meditate on this week. Where are your clients spending their money? Think about where they go and what they do. I promise you the experience someone gets at a Rolls Royce dealership, it is very different from the experience someone gets at a Toyota dealership, which means if you're someone who serves high net worth or ultra-high net worth clients, this may be more difficult for you because your competition is fierce. When ultra-high net worth people interact with the world, they go out into the world, okay, they're getting a different level of service than what most people receive. This is just the truth. They are willing to pay for it. People cater to them. People view them in a different light. You must hold yourself to that standard. There are some companies that spoil people when it comes to customer service Disney is one such company. I'm going to list some examples here of Disney's world, famous service, and hopefully it gets some gears spinning for you. So, let's go, I have this little list in front of me. [13:40.9]
Disney's employees are also called cast members. They must remain “on stage” at all times. Whenever they're working, they must maintain a happy, helpful and cheerful attitude. And all backstage areas of the magic kingdom, they have mirrors beside the door that leads in the, these doors that go into the park, they've got little mirrors there. And employees or cast members or whatever you want to call them today, they're encouraged to check their smiles before entering the park. Isn't that nuts? When people are walking around the park at Disney, they see all these cast members are happy, they're smiling, they’re joyful. It's not an accident it's done on purpose. Disney has, if you break it down into this little micro system, the micro system for getting their employees to be happy and cheerful is to have a reminder literally by the door before they enter the magic kingdom to say, Hey, check your smile, bro. I imagine it doesn't say that. Imagine it just says, check your smile or something like that, something cute, but they're doing it on purpose. They're being intentional because they want to deliver this experience to their guests. [14:45.5]
Disney staff is also knowledgeable. They can answer your questions and perhaps most importantly, get the answer if they don't know. They train very hard. They give your year-round training and employees are constantly reminded to give consistent guest experience, which is a system. Do you have a system for delivering a consistent experience? Not only to your prospective clients because your marketing systems can do that. The, one of the reasons that I really like email marketing as a system is because when you create an email auto responder sequence and heck it doesn't even have to be within an autoresponder, because if you're at a company that doesn't let you use the software, then that's fine too. You can just have a sequence that every single person goes through, because guess what? You can test that. You can control for certain variables. You can be methodical; you can be scientific and you can improve it over time. [15:36.0]
But Disney, they want this consistent guest experience. When someone comes back to the little town in nowhere, Ohio, and they talk about how awesome Disney was and their neighbor from nowhere Ohio wants to go to Orlando, Florida with the mouse and the oranges and all this other cool stuff in Florida. And by the way, I think the world's largest McDonald's is actually in Orlando. I could be wrong. I've been to back in like 2002, 2003. I went to the war. What was at the time, the world's largest McDonald's at, or in Orlando, I don't know if it's still there. If it is, send me an email, send me an email where the subject line world's largest McDonald's and let me know if I'm right, if you know about this, but let's move on. [16:18.3]
New employees actually go through six weeks of training before they even see a guest. So don't, you dare think that you can just wing it or you tell yourself that you're a people person, and then you can just mesh into any situation and that you're good to go. You are not, you are not my dear, sir and or ma'am. You must continue to polish your skills. If Disney like, let me repeat myself. Disney puts their people through six weeks of training before they even see a guest that is nuts, but it just shows how committed they are to the guest experience and how committed they are to ensuring that people have a good time when they finally get there. If you can even do a fraction of that, it will be, you will be better off for it. And finally, the personalized, a bunch of stuff, if you've ever been ever been to Disney, you know that they personalize things like the rooms. If you have any requests, they can fulfill most requests. They personalize the tickets to stuff through the app and so on and so forth. That when you leave, they send you a little survey that's personalized for you and ask certain questions of you and they take that feedback and they feed it back into the machine. This is how they become so darn good at customer service and just blowing people's minds with the little details of how good they are at this sort of thing. [17:36.2]
So that is it for this week. My goal with this episode was to open your eyes to the competitors, both direct, indirect, and beyond that you have. And I also wanted to get you thinking about some ways that you can improve your service to stay on par with what your clients experience from other businesses. I obviously can't give you any specifics because I don't know your clients or your situation, you do though. So, take my advice here and you think, think. Use your independent thinking skills, your critical thinking skills to apply to your situation. But I can tell you with this information, your business will be better off if you pay attention to all of your competitors, not just other financial advisors. So best of luck to you. If this helps you leave a positive review, wherever you listen to podcasts, thank you so much. And I'll catch you next week. [18:24.8]
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