You're listening to “Financial Advisor Marketing”—the best show on the planet for financial advisors 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 advisors grow their businesses more rapidly than ever before. Now, here is your host, James Pollard.
James: I really didn't want to record this podcast episode. A long time ago, I did an episode about buying leads. I think the title was actually “Stop buying leads” or something similar. But this podcast has been growing faster than a rabbit family reunion, so I figured I might as well address this again.
Plus, there are so many new Inner Circle members who email me their questions about buying leads and things like that. I'm partly recording this episode for them, because instead of working my fingers to the bone typing out detailed responses every time they ask, I can send them this episode and tell them to listen to it. [01:05.7]
Over the past week alone, I've heard from nine financial advisors who mentioned they were buying leads. Two said it was profitable for them. One said she wasn't sure and the other six said it wasn't working for them at all. Look, if buying leads is profitable for you, more power to you. Live your life, do whatever it is that you want to do. However, I still think you should listen to this episode because I want you to consider the alternatives.
Imagine a prospective client came to you, talking about how all his money was in a checking account, earning 1%. Picture him all happy, bragging about how he's technically earning 1% more every year than the previous year. His number is technically going up and he is thrilled. He's loving it. He's just like, Yeah, I'm earning money in a checking account. [01:46.8]
What would you tell him? You would probably tell him that there are better options for his cash instead of sitting in a checking account earning 1% or 4%, or 5.5%, or whatever, right? That's the same way I feel about financial advisors who buy leads, even the ones who say they're profitable with them. I know there are so many better alternatives out there. You just want to pull your hair out and be like, What? You have a million dollars in a checking account. You should invest that in the stock market. You should do this, this and that.
I feel the same way. I'm like, Oh my goodness, do you realize email exists? Do you really realize that websites exist, ads exist, direct mail exists, webinars exist? We live in a time of such abundance and prosperity, and if you are outsourcing or delegating to a third party that really couldn't care less about you.
Let me give you the numbers here. Let's say you're spending $300 per lead. With $300, you can almost certainly get 30 new email subscribers, that's $10 per subscriber that is on the high end. If so, if you have a good ad, with good targeting, you can get double or triple that. I am personally running online ads right now and I’ve gotten more than 100 email subscribers in the past 24 hours. Last week, I got more than 500 email subscribers from my ad campaigns alone. [03:06.0]
If you're a financial advisor who has a niche-specific lead magnet and you are putting your ad in front of people in your niche, then the only people in your niche should be able to opt into your email list. Seems obvious, right? Here are the numbers behind why it's so much better than a bought lead.
Let's say you spend $300 and you get 40 new email subscribers. That's not terrible, but it's certainly not amazing either. These people should all be in your niche, so they are at least somewhat qualified, which makes you more efficient. Plus, they're in your world, which means you control the frame, you control the presentation, and you control every step, every nook and cranny, the whole shebang of how you interact with them. You can then follow up every single day through your autoresponder sequence to build trust, credibility and rapport with them in order to set an appointment. [03:55.6]
Think about this. If you, even if, even if you only set two appointments, so 5% of your subscribers, that equals two appointments, they would still be from people in your niche. That is so much better than a single lead and you can still follow up with everyone else. You can send an email saying that you want to mail them something. You could do that. You can put something physical in the mail. You can do a book. You can do a newsletter. You can do whatever. You send them something. You can connect on social media. You can do the whole multiple marketing strategies things that I talked so much about.
Let's say that your marketing machine enables you to get another two appointments from these people. You now have a total of four appointments from your $300 that you spent to build your email list instead of one single measly lead. That takes work. That takes effort. That takes building the machine. However, it's a heck of a lot better.
Here's the message I want to give to you, or there are several messages, but here's one of the most important ones. Working on your own stuff will give you disproportionate results, okay? You could spend 15 minutes outsourcing to a third-party lead-generation company and get, let's just say, one unit of result, right? [05:04.6]
But if you spend four times the amount of time, so 15 times four is 60 minutes, so you spend 60 minutes working on your own stuff, you will not just get four units of output. You might get 10 or 20, or 30 or 40, depending on your time horizon and how long you let it run for you. If you're a financial advisor and you say invest early and invest often, and stay the course and let it compound over time, do you actually take your own advice or are you just addicted to the leads? You're like, Oh, let me get another lead. Take your own advice.
Another example. With $300, you can send 300 simple direct mail pieces to people in your target market. All it takes to match the bot lead is a 0.33% response rate. That response rate is terrible, by the way. You should be able to do a lot better with a niche-specific mailing sent to people, you guessed it, in your niche. [05:56.7]
Even if you went fancy and you did a lumpy mailing or a big Express envelope that cost more than $1, you should be able to get 50 to 100 mailings for $300. You spend $1 per mailing, you can send 300 with $300. That's very simple math, and if your response rate is 0.33%, you are getting the same exact result. But guess what? You can follow up. You can get more results. You should obviously have a list. These people should be in your CRM. You can put them in your machine. That is where the money comes from. That is the value.
With $300, you can run a basic online advertisement. You can send traffic to your website. Several hundred people could check out who you are and what you do. Even if you ran an ad to your homepage, which I don't recommend because I recommend sending traffic to a landing page with a specific purpose, not just your homepage, but even if you did that, you could likely still get better results than with bought leads. Oh, and you still control that audience. You chose them. They are going to your website. They're not just throwing their information into some black hole and hoping they hear from someone, which is what happens with lead gen companies. [07:00.1]
Even video views on Facebook can be had for as little as a few cents each. With $300 you can get, at five cents each, 6,000 people to see your beautiful face and hear your beautiful voice. Yes, 6,000.
Don't you think that any one of these things could be more valuable to you than a single lead? And that's not all. Because you'll be the one sending the email, mailing the direct mail piece or showing the ad, or anything, really, but when you buy leads, that same lead could be sent to multiple advisors. I prefer places where I don't have to fight this hard. Do you?
“But, James, how can I generate my own leads?” you might be asking. Don't worry, I’ve got you covered. I put together an 80-plus-page PDF with 57 of my favorite Financial Advisor Marketing ideas, which you can get over at TheAdvisorCoach.com/57MT. The number 5, the number 7, the letter “M”, the letter “T”. Once again, that's TheAdvisorCoach.com/57MT, so 57 marketing tips, 57 marketing tips for financial advisors is the thing that you're getting. It's the PDF. [08:06.2]
I don't expect you to know all this stuff right away. I don't expect you to be an expert overnight. All I want to do is give you some options for thinking differently. Just like you would give options for thinking differently to the person, if a person came into your office and was like, Yes, I’ve got a million dollars in a checking account, and this is so great. I'm earning 1% every single year, you'd be like, Okay, cool, that's nice, you're liquid. You're protected from loss kind of, outside of inflation and taxes, of course, but there are more disadvantages than advantages to staying in cash, and that's what I'm trying to communicate to you here. There are more advantages to doing it yourself. There are more disadvantages than advantages to going with bought leads.
It kills me, absolutely kills me when I see financial advisors piss away thousands of dollars on worthless leads, yet struggle to invest in themselves in their businesses and their own assets, aka assets they own and control. Do they not believe in themselves? Why do they believe in some other person or companies like a third-party lead-gen process more than they believe in themselves? It's so sad. [09:11.8]
Also, let's think about this. Think about the whole buying leads process in the context of this legendary quote from Earl Nightingale. It goes like this. “Whatever the majority of people is doing, under any given circumstances, if you do the exact opposite, you will probably never make another mistake as long as you live.” Think about how many financial advisors are buying leads. If that is the go-to move for a lot of advisors, is that really what you want to do? Do you really want to copy what most advisors are doing? Come on, get real. [09:45.3]
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 $1,000 worth of bonuses, including exclusive interviews that aren't available anywhere else. Head on over to TheAdvisorCoach.com/coaching to learn more.
Also, pay attention to how the lead-gen companies market themselves. I really want you to stop and think about this. Did you become a lead for them in the same way they say they're getting leads for you? Probably not. Chances are someone reached out to you through LinkedIn or email, or something like that, and got you on a phone call. Hmm, let's think. Maybe that is something that actually works instead of whatever they're pushing. There are so many, and this goes beyond just a lead-gen company, and I want you to pay attention to how people are marketing to you.
There are so many people, coaches, consultants, agencies, experts, gurus, lead gen, whatever. They claim to do so much for financial advisors and get them thousands of results in nanoseconds or whatever, but pay attention to how they're marketing. okay? If these people were so good at marketing, they would spend their own money on ads, because they have marketing skills, and if they just put their ads out there, they would get results, right? [11:03.8]
I can count on less than two hands, or fewer than two hands, on fewer than two hands how many people I have seen who claimed to help financial advisors with their marketing actually put money into their advertisements or actually advertise at all? There are not that many people. I've seen one brand, another brand, a company, because they have a marketing budget that they're just going to say, Oh, I'm going to spend $1,000 on this no matter what, right? I'm talking actual people who actually say they get results for financial advisors. Are they putting their money in advertisements? Hmm, let's think about this. Why wouldn't they be?
But I can tell you this. I can tell you, if you're a financial advisor in the United States, there is a greater than 99% chance that you have seen my ads, if you're active on Twitter, Google, LinkedIn, and Facebook. Why? Because I put money behind my marketing. I am taking my own advice. I am eating my own cooking. There's a reason for that. I want you to think about that, not just with lead gen, but with literally everything you see. [12:02.0]
Even if the lead gen companies are doing some sort of online advertising, which many of them do, all they're doing is passing along the cost to you. That's how the business model operates. And I’ve got nothing against people making money. I love making money. I love capitalism. But I think it's a dumb decision for financial advisors to pay more money for an inferior product, because at the end of the day, it's significantly more expensive. Advisors have no long-term process in place when buying leads. It cannot happen because you don't know the process. You can't predict it, whatever.
The leads themselves aren't as good as an advisor who has a niche and markets to that niche. I know I joke about it. It's my legal obligation to talk about niche marketing in every episode and even though I don't talk about it in every episode, but you're just not going to be able to compete with it, right? You are absolutely, 100% not going to be able to compete with a financial advisor who follows my philosophy. You're just not going to. I see it. I've seen it for years. I’ve written the Inner Circle newsletter for six years now. I’m in Year 6, and the advisors are just absolutely crushing it, if they follow the advice. I don't know how often I can say it. I don't know if I can overstate it or whatever. [13:11.0]
Also, the advisors have no control. They're riding in the backseat, while someone else is driving. They're letting their destiny be controlled by someone else. I don't know about you, but that alone would be a deal breaker for me. Imagine coming home and telling your wife and children that your business suffered today because of the actions of another man. “Sorry, kids, we can't go to Disney World this year, because Daddy is dependent on another man for his livelihood and his well-being.” Is that the type of person you want to be for your family? Hey, and so, again, more power to you, live your life, but I know what I want.
There are so many reasons why it's a bad idea. Brand misalignment is another one. I'm not really into the whole brand building thing, but I can tell you that bought leads may not align with your personal brand values, your preferred client profile. That leads to a mismatch, straight up, just a mismatch of the leads expectations and your expectations. When that happens, you're setting your money on fire. [14:07.4]
One advisor told me that he works primarily with people who have conservative political values. Do you think he had much success when he was buying leads? But what is he to do? If he serves a different type of market, he wouldn't be true to himself, and that's no way to live either. Buying leads, it's also highly unpredictable. There are no guarantees that bought leads will convert into clients, and to be fair, okay, I know I'm like rallying against lead gen companies, but to be completely transparent, no guarantees exist anywhere in the marketing process.
You could send out an amazing message to an awesome group of people and have it flop because it was raining that day or something. Stuff happens, I get it. But it seems like stuff happens a lot more with advisors who buy leads. It's so important to be able to predict and forecast what is going to happen in your business. [14:56.1]
If you have a 5% conversion rate to appointments in your emails, then you know with relative certainty that you will get one appointment for every 20 email subscribers. If your direct mail piece converts at 3% and your mailers cost $1 each, then you know that you get about one appointment for every 30 mailers you send. That's nearly impossible to achieve with bought leads, where you just know, you have a system, you have a process, you can predict this stuff.
I love this quote. I'm going to give you another one. I gave you the Earl Nightingale one. I'm going to give you one from Coach Vince Lombardi and he said, “It's hard to be aggressive when you're confused.” That is so true, especially in marketing, because one of the drop-dead simple ways to make your marketing work better is to cut your losers and let your winners run. That's also true in the stock market and if you've read the classic investing books. That's a famous quote, too. But you can't do that. You can't be aggressive unless you know what is actually winning versus what isn't. [15:56.1]
I'll give you an example. When I used to coach financial advisors, direct mail was one of my favorite marketing strategies for getting more clients. I would work with them to identify their niches, create a simple mailing, typically, one or two pages printed on both the front and the back, and mail it directly to people in their niches.
We would know, not hope, not guess, we would know if we had a winner within a week. How? Because we used a completely different phone number, like a Google Voice number, on the direct mailings, we would know for sure that the only way someone got that number was by receiving a letter in the mail. We would track each phone call and see how many appointments and how many clients came in as a result. That's the process.
I was doing this in 2015. Stamps were 49 cents apiece, I believe, so our total cost with paper, one piece paper, two, if we were being ambitious, envelopes and ink was maybe 60 to 70 cents. If we had to run a mailing list that could push us to roughly $1, depending on how big of a list we bought. [16:58.7]
Let's say that we spent $1 on each mailing. We could send 1,000 mailers out for 1,000 bucks, and we could reasonably expect to get anywhere from, let's just say, 10 to 40 people to call, assuming the list was qualified, and that was step one. That was the very first mailing before we tweaked anything, before we changed the headline, before we added images, before we added handwritten notes, whatever. We would know, not guess, know within a reasonable range of variance how many appointments will come from a given mailing.
But wait, it gets better because we could get two different numbers and then create two separate mailings. We could put the first number in the first mailing and the second number in the second mailing. In marketing, this is called a split test. Let's say we figured out that the first mailing generated 12 calls while the second mailing generated 35. We would get rid of the first mailing entirely and scale up the second one. Again, very simple. [17:54.5]
If we felt especially ambitious, we would run another split test. attempting to beat the second mailing. We would have Mailing No. 1, Mailing No. 2, and then we would add Mailing No. 3 and Test No. 2 against No. 3. I have taken this track-everything mentality everywhere with me in the marketing world. Still, I'm consistently dumbfounded at how many financial advisors are flying blind. They have no clue.
When you buy leads. Do you know where they come from? Do you know how many appointments you're going to set? Do you know the other advisors they're talking with? Do you know how you have been positioned or framed by the lead-gen company? All of these variables are ones you should know and you can know them with relative certainty if you do the stuff yourself. Okay? That is what I'm trying to tell you.
Also, when you have your own marketing machine working for you, here's the best part. You can qualify your leads, not the ones you bought, but the ones to come to you, your leads every step along the way. When you buy leads, you're leaving the qualification part up to someone else. [19:00.8]
I will tell you straight up, my most successful Inner Circle members do the most qualifying. Let me say that again. My most successful Inner Circle members, again, I’ve been doing this for a long time. I’ve had thousands of back-and-forth conversations. I've seen the data. I’ve seen the nitty-gritty that financial advisors aren't willing to share in a mastermind or a conference, or online or whatever. They tell me the real things right.
The most successful ones do the most qualifying. They will literally say things like, “Don't bother setting an appointment if there's a chance that you won't show up,” aka don’t ghost me. They'll say, “Don't opt into this email list if you're not a dentist,” or “This is for dentist eyes only” or “I only work with police officers,” or “I have strict account minimums,” and things like that. Those are not gimmicks. They're not doing those things because they feel like it or because it sounds cool, or anything like that. They're doing it because they want to make sure they qualify—keyword, word of the day, “qualify”—people before investing the precious minutes into meeting with them. It's no coincidence that these advisors are happier, wealthier and more efficient than other advisors. [20:02.8]
If you're buying leads, I hope this episode has given you something to think about, and if you're considering buying leads, I hope this episode has helped you stay away, because buying leads is like eating junk food. If you are absolutely starving, and you have nothing else, junk food can technically keep you alive. But given the choice, it’s a terrible option. It's much better to focus on the metaphorical nutritious food of building marketing assets you own and control. Thank you so much for listening. I appreciate you and with that said, I will catch you next week. [20:42.2]
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