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: Top of the morning to you financial advisors or afternoon or night or whenever you’re listening to this! I don’t really care, and if you’re in a casino like what we’re going to talk about today, you probably won’t even know what time it! Jonathan…
Jonathan: Windows!
James: Did you know that casinos don’t have clocks?
Jonathan: They don’t have clocks…? Oh, yeah, that’s right. I’ve seen that before.
James: They do not have clocks, so they purposely leave the clocks out so you stay in there longer. [0:01:01.0]
So a little tidbit there for you, and another tidbit is that a lot of casinos are built in what’s called a labyrinth style. So if you’ve ever been in a casino and you take like a left turn and maybe another left or a right, and you eventually get lost, and you’re like, where in the world am I? Especially in the big casinos like the ones in Las Vegas, MGM and the Bellagio and the Venetian, all the big hotels, the casinos, you get lost because it’s like a labyrinth style, and that’s what they want. They want you to get lost. There are a lot of other tips and tricks like some casinos play certain machines near the bathrooms so people go to the bathroom and they come out, they see people winning, right? Or maybe they place them in the depths in the casino where nobody can really access, and they place all the other certain types of machines near the entrances that light up and get people drawn in. Lots of little secrets that not many people know about casinos, and by the way, I want to mention, I’ve been adding a lot of financial advisors to my email list recently, and it seems like a large percentage of these advisors are new, and when I say new, I basically mean that they have one year of experience or less. [0:02:07.3]
So if you’re listening to this, and you’re a new financial advisor, I want you to know that I offer an MP3 audio download, which is literally called "You’re First Year As A Financial Advisor", and it gives you a lot of important information that you want to know if you’re new, and if you haven’t gotten that by now, make sure you get it. It is good information. If you’re a new financial advisor, seriously, go to the TheAdvisorCoach.com and click the tab at the top, which says For New Advisors, is what is says, or you can click the Products tab. Either way, you’ll find it. It’s right at the top. So if you’re a new advisor, I made that specifically for you. Don’t miss your chance to get it. Now, today, we’re going to talk about casino marketing and how it can apply to financial advisors. So, Jonathan, what’s your take on casinos? Are you a regular patron or never been…?
Jonathan: I like my money, bro. I like to keep my money, so I stay away. [0:03:00.6]
James: No blackjack or poker even?
Jonathan: No, nothing.
James: Okay, because those are the only two that you can have, not a significant edge, but at least a little edge, so poker, blackjack, that’s what you want to do, but I have been to tons and tons and tons of casinos. I’ve been to Foxwoods, Mohegan Sun, Atlantic City, Hard Rock… Even the little ones out in the middle of nowhere, like in Pennsylvania and the Arkansas Dog Track. I’ve been to a bunch, and it’s not because I’m a gambling addict, Jonathan!
Jonathan: Yeah, I was starting to wonder! [laughter]
James: No, one of my very first jobs was working at a casino, and those were all business trips. I’m going out and learning about these different casinos. I had a great time, so the story behind this, I’m not going to spend much time on it, but my family, they were and they still are, they’re heavily involved in harness racing, and they’re heavily involved in the casino industry. I mean, not so much anymore, but they were back in the day, so I basically grew up around the racetrack, and the casino, so that’s what I did since I was a young ‘un. [0:04:06.2]
Grew up, and hung around the casino and the raceway, and I was there. No, of course, you can’t go in and work at the casino until you’re 21, but I was going in and out, going up, and learning the ins and outs and the ropes and listening to the conversations at home, basically how do we make the raceway better, how do we make the casino better, how do have our horses win, so on and so forth. So that’s what I grew up with, Jonathan.
Jonathan: Interesting.
James: In case you didn’t know, well, if you don’t know, now you know. That was my childhood, and, for example, the raceway was also on State Fairgrounds, which means that every single year, when the fair would come to town, where they would get a little county fair… Well, it was actually the state fair! I would be working, 12 years old, 13 years old. I’m sure they violated some type of child labor law because I was out there working, and my uncle – I’ve mentioned him on previous podcasts - he had several businesses, but he had a business, which he would set up at the fair, and I would work for him when I was like 14, 15, 16. [0:05:05.1]
Well, I worked in and around that stuff for many different years, and when I got old enough, I got a job at the casino in the marketing department. So that’s a shocker, right? Me?
Jonathan: Right.
James: Of all people doing marketing. And it was a pretty cool experience because I got to meet people from all walks of life. I got to meet people you wouldn’t believe. People who blew $20,000 per night…
Jonathan: Wow.
James: These super rich people, and I’ve also met people who were on welfare, and they spent their last dollar. I’ve even met suicidal people in the casino. The stuff that you don’t really hear about or think about, everything happens between those casino walls. People get suicidal. Crazy stories. We even had a lady, she had a glass of vodka, and she threw it down on the ground, and she had a Zippo lighter. You know what I’m talking about Jonathan? The Zippos?
Jonathan: Yeah.
James: Where the flame doesn’t go out? She threw it… Maybe it wasn’t vodka. It had to be something else because I don’t think vodka would go up in flames like that, but she threw it down, and she started burning stuff, and, of course…[0:06:08.8]
Jonathan: Wow.
James: … security ran over and gave her the boot out, you know! Gave her a crippling cross face or something, and they escorted her out of the building, and I’ve also met a bunch of different celebrities. I’m not going to name drop, but I met a lot of singers, a lot of country artists because we were out in the country, the state fairgrounds. It’s kind of what they did, and I met a lot of comedians. I’m not going to name drop, but a lot of comedians too, and here’s another little fun tidbit since we’re having such a good time! People would actually, and I am not kidding, they would urinate and defecate on the chairs…
Jonathan: No!
James: I know, but they would do it on the chairs because they think they have a hot machine…
Jonathan: [laughter]
James: And they wouldn’t want to leave!
Jonathan: Wow! That’s bad!
James: Yeah! They would be at the slot machine, and they would think they were going on like a winning streak or something, and they would have to go to the bathroom, they would just… They wouldn’t even care. They would just go right on the chair. [0:07:02.4]
Pretty gross, but those are the joys of working at a casino, Jonathan. And perhaps the most important part of my entire experience at the casino was learning some really cool marketing “secrets” that could be applied to almost any business, but really I found that financial advisors in particular can use these to get more clients, and I just want to stop and say, never in my wildest dreams did I envision I would be talking about people pooping on chairs in a casino…
Jonathan: [laughter]
James: on a podcast. What has my life come to? I have to reconsider everything now…
Jonathan: Yeah.
James: Lesson number one is that segmentation can increase profits. So I know you’re not a gambler, Jonathan, you’ve established that, but in case you don’t know, casinos, they have these reward cards, like player’s cards or player’s club cards. Loyalty cards essentially, and what casinos do, is they segment their entire customer base by how much people gamble because these cards are tracking everything, and if you’ve got a higher level rewards card then someone else, it means you gamble more, plain and simple, and casinos will treat you better if you have a higher status on these cards. [0:08:15.4]
So they have casino hosts, and that’s actually… I actually was a host sometimes when the other guy called out or was sick, and the casino host is the person that will wine and dine these players, and I had the honor of doing that. I remember there was this one lady who was in her 50s, and I was in my early-20s, very early-20s, and as the host of the day because I was filling in for this guy, I would be allowed to take her to any of the casino restaurants and pay for it. She wanted a host with her because she didn’t want to eat alone, and it’s a bit of a strange request, but she was spending enough money so they could justify it. I mean, she was losing like $30,000 or $40,000 a month, so…
Jonathan: Wow!
James: I don’t know where she was getting this money. She kind of hinted that it was her husband’s life insurance money, as she was single, and her husband had recently passed away, and that’s like, you know, wow, that’s pretty screwed up, that you’re gambling away your husband’s life insurance, but, hey, who am I to judge? [0:09:11.5]
But anyway, she would always try to get me to leave and go with her somewhere else. So…
Jonathan: [laughter]
James: And I have…
Jonathan: Her little boy toy, eh?
James: Yes, yes! And I politely turned her down again and again and again, and it got so bad that I actually had to ask to never work with her again. So if she came to the casino, and she wanted to eat somewhere, hey, she would have to do it by herself. So. A little side story there that this lady would try to constantly try to…
Jonathan: [laughter]
James: … She was like, hey, there’s a Hampton Inn down the street! [laughter]
Jonathan: Ah, lovely!
James: No, thank you! I think her name was like Shelly or Shelby or something. I was like, no, thank you, Ms. Shelly. I’ll pass, thank you! [laughter]
Jonathan: [laughter] [0:09:55.2]
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James: But financial advisors, they can use segmentation by getting a clear understanding of their clients and their profitability, and the typical way people do this, they separate the clients into what's called A, B, and C clients, and this is okay, I don't mind, but I'd rather see advisors cut their business up into five parts, not three. Not A, B, C. I'd rather just have them do it in five parts, and it gives you a clearer picture so you can also see what would happen if you dropped the bottom fifth, and that kind of takes your business into the 80/20 rule, so when you segment your clients in five parts, you can see the top 20% that is generating 80% of your money, and you can see the bottom 20% of people who are giving you the most headaches and wasting the most time, and you can essentially amplify the top, and you can start to brainstorm ways you can do that, and you can see the bottom. [0:11:13.3]
So segmentation is an incredible way to get more clients as a financial advisor to increase your profitability, and casinos have mastered that. They segment the heck out of their customer list. Lesson number two: Do not be afraid to spend money. Casinos… Man… Casinos, they spend seemingly absurd amounts of money on their players, and that lady I just talked about, she was getting like $500 worth of food credit every single month, and that's how we could take her out to dinner. It's like $500, if she's there twice a week, that's eight times a month approximately, and each bill was like $60, so she got $500, and she used it all. And she also got like $1000 in free play every single month, so the casino was giving her this money, and the reason they were doing that is because they knew that she would keep coming back, they knew she would keep playing. Let me emphasize this. Casinos are not stupid. [0:12:09.0]
When I was at the casino, I saw people who thought they could beat the system. They were like, oh, there's this particular machine that I could do, and before, in Atlantic City, it was video poker, and there were certain machines where if you played perfectly – the key word is perfectly, you had to play perfectly on the video poker machines, and it was even a certain type of machine, you had to know which machine it was – then you would technically have an edge. People would actually set up shop where they would have like four different buddies. They would cycle through the machine, and they would make sure nobody got the spot, and they would try to have an edge, and these people did it successfully, but for the most part, there is no edge, the house always wins. You hear that all the time in casino stuff, and it's true…
Jonathan: Did those guys get kicked out, James? They were…
James: They did eventually. Well, I think they got kicked out for something else actually. [0:13:00.0]
I mean it wasn't related to what they were doing. It was just them being like belligerent or whatever, but eventually, Atlantic City just replaced all those poker machines. So unless something has changed since I left, and I am not 100% clear on this because it's been a while, but unless something has changed, there are no more of those machines. You can't find an edge of video poker. I could be wrong. I'm sure someone is going to email me, and there's some person… [laughter]… but that's just my experience. Yeah, people all the time, they were like, oh, if you do roulette this certain way, you're going to get an edge, or I know this particular machine pays more so I'm going to spend my money there, or I've got this secret hack for baccarat or whatever that's going to give me an edge. It's all admirable that people are optimistic and they think it's going to work, but, again, casinos aren't stupid. They're really good at this stuff. If they're giving you free play, if they're giving you dining credits and stuff like that, vacations or football tickets – I've seen it all - if they're giving you that, it's because they've mapped out a formula, which predicts that your value will increase if they do it. [0:14:01.6]
They're really good at that stuff. And who else is good at that? Credit card companies. I mean, I've had people ask me, because I'm in financial services, marketing, they say, why do I keep getting all these credit card offers? Because it works. "Oh, well, I never respond to it." Maybe you don't, but other people do, and that's kind of what it is with casinos and all of business. If I make an offer to the financial advisors right now, and I give them a URL, I know that not every single person is going to go to the URL, but I have mapped out my process, and I know that by doing a certain thing or providing a URL, it is going to improve things for me. The same happens with casinos, and the same thing should happen for financial advisors. You want to get your game tight, and the lesson is that you shouldn't be afraid of spending money if you want to grow, and I remember one financial advisor told me he didn't send birthday cards because his clients… He didn't send them because he thought the birthday cards were too expensive, Jonathan.
Jonathan: What?
James: Too expensive is what he said. [0:15:00.7]
"I'm not going to send my clients birthday cards" or I guess he didn't send anniversary cards or holiday cards or anything… He didn't send any cards because he said, wow, these cards are expensive. He was like, I've got 80 clients, each card is going to cost me like $3. I don't want to spend $240.
Jonathan: Oh, wow…
James: That's what he told me! And all I could think was like, wow, you are really freakin' stupid because you haven't mapped out the lifetime value. So spending that $240 to send those cards could lead him and probably will lead him to another $5000, $6000, $7000 in customer lifetime value over the course of the next few years and over the course of his book of business. So him saving - "saving" - $240 today, probably is going to cost him several thousand dollars down the road. Don't be afraid to spend money, guys! I mean, it is what it is. Other businesses are doing it. They're doing it successfully. If you're scared about it, if you're skeptical, hey, that's your thing, do you thing, whatever, but these businesses are doing it, they're doing it well, they know that it works. [0:16:06.4]
I know that it works. I'm not afraid to spend money, so that's lesson number two. Lesson number three is that service matters. So we've established that casinos, they figure out their top customers. They figure out who they are, and then they aren't afraid to spend money to get and keep those customers. That's number one and number two. Figure out your best people, get a niche, figure out who's going to help you the most, who's going to help you grow the most. Casinos do that. Segmentation matters and then spending money matters, and then number three is that service matters. While none of the spending money and none of the market matters if you can't follow through and provide amazing service, and casinos are absolutely famous for some of the perks that they give. They give you hotel suites, shopping sprees, private travel to and from the casino. They pick you up from the airport, private parking spaces at the casino. [0:17:01.3]
They give you exclusive gaming rooms where no one else is in there but you. They give you trips, birthday parties, everything. Perks, perks, perks… Which means the question now becomes, what are you doing to improve your client experience? And you don't have to rent a limo or anything like that for your clients, but the small stuff adds up. Pay attention to what they want, what they like, add some value there. At casinos, I remember we gave out football tickets to the Eagles, the Ravens, the Redskins, and sometimes the Jets and the Giants. I mean, all in the area, we had fans who were all across the East Coast. We gave those tickets out like there was no tomorrow…
Jonathan: Man, they must have loved that.
James: We just bought a bunch of them in bulk, gave them out, and people would come back. They'd say, hey, I want some of these tickets, and it was like, well… Personally, I would just be honest with them. I need you to play this game for this amount of time, then we can talk. I wouldn’t try to beat around the bush, I wouldn't hide it – that's just my personality type.
Jonathan: Go lose more money than these tickets cost, and I'll give you…[0:18:01.7]
James: Well, I wasn't that blunt!
Jonathan: [laughter]
James: But I knew the math, and I would say, hey, you know, why don't you just go out and have a good time, let me worry about the tickets, and we'll talk. And I mean these guys are smart. The people who are losing $30,000, $40,000 a month, these are corporate executives. They run businesses. One guy had a construction company that literally serviced the government in Washington D.C., and he was one of the biggest providers to the infrastructure in Washington D.C. This guy was making…
Jonathan: Waste management guy?
James: That's where you tax money is going! Right back to the casinos!
Jonathan: Yeah!
James: Going to this guy and then the casino, but this guy was making millions every single month, so for him to come in and lose $100,000 was nothing. Like it didn't even hurt. It was like me buying a sandwich at Chick-fil-A!
Jonathan: [laughter]
James: This guy didn't really care, and he knew the game. He's a smart guy, so he knows he has to lose a certain amount of money to get these tickets, but it's all part of the fun for him, and you have to understand that with your business too. [0:19:00.4]
Clients aren't stupid. They know that if you send them a gift, they know eventually somebody's got to pay for it somewhere, but they still like getting the stuff. They still enjoy getting cards, they still enjoy getting gifts. It doesn't change anything. So don't be afraid to spend money. Don't be afraid to improve your service. And one of the things I mentioned in an Inner Circle Newsletter – I'm going to give the concept away, and I'm not going to tell people how to do it or why it's important – one of the things that I mentioned was to create a separate account that you can spend on your clients for any reason at any time. And when you have a separate account for it, it gives you a mental edge because you've already thought about it. You don't have to jump through any hula hoops. The account is already there. They're ready to be spent, and if you have it set aside, you have far less friction to actually improve your client's life. So if they walk into your office and their cell phone case is all ratted up and falling apart, you can use your secret account to get them a new phone case, or if you find out that they're child loves to play soccer, you have that secret account already there ready to go, you sent them a magazine subscription to a magazine about soccer – whatever you want to do – but having that separate account, just like casinos do – casinos have money already set aside, ready to spend on clients. [0:20:16.0]
If you can do that, your service will improve dramatically because you're providing stuff that people want. You're improving the experience.
So to recap: Segmentation can increase profits, don't be afraid to spend money, and service matters.
Jonathan: Boom. So what's coming up next time, James?
James: The next episode is going to be called "When Advisors Should and Shouldn't Give Value" because there's this misconception that you have to provide value all the time as a financial advisor, and despite what you may believe, you do not have to provide any value for free, at least in the traditional sense, to get clients. So, if you're a freebie seeker who constantly wants to get value, then maybe you shouldn’t listen to this next podcast episode. [0:21:03.2]
Jonathan: Go home and cry [laughter], James said.
James: [laughter]
Jonathan: All right, all right. And that is a wrap for another Financial Advisor Marketing. We will be back in your earbuds next time. Thank you for tuning in.
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