When an adviser/planner says they need more new enquiries, there are two ways a marketing expert or agency can react:
- Option 1: To assume that the adviser/planner has accurately self-diagnosed the problem, and dive straight into recommending tactics that’ll create new enquiries
- Option 2: To question the assumption that the only way to achieve the adviser/planner’s growth ambitions is to create new enquiries.
Have a guess which is the right one!
Every week, firms come to us because they want to grow their business by taking on new clients.
We take them through our five-step Ignition Marketing Strategy process. Increasing the flow of new enquiries will be the right solution for many. However, others need something different – and this brings me to conversion rates.
When they first come to us, many of these firms know (to a varying degree of certainty) the number of new enquiries they receive.
Hardly any monitor their conversion rate, let alone take action to improve it.
That means they will:
- Work less efficiently, because they need to deal with more enquiries and hold more initial meetings to take on a new client
- Spend more money on other marketing tactics
- Have tighter profit margins.
Of course, the alternative is also true. Improving conversion rates will:
- Drive growth
- Drive operational efficiencies
- Improve profit margins because less money will be spent on marketing.
Let’s also not forget the dopamine hit when a recommendation first gets in touch!
Set a minimum benchmark of 25%
Firms should aim to convert a minimum of 1 in 4 new enquiries, then kick on from there.
In our experience, the rate you convert recommendations (those things formerly known as “referrals”) will be higher than that. Leads from other sources will likely be a notch down.
If you’re not hitting 25%, the problem will lie in one, or a combination of, the following reasons:
- Your processes aren’t right
- There’s a problem with your pricing or proposition
- Your marketing isn’t creating enquiries from the right type of people
- Your advisers/planners aren’t effectively selling (yes, everyone is selling something) the proposition.
It’s not all about the headline conversion rate
Understanding your headline conversion rate is the minimum you should aim for. Ideally, you should also know:
- The proportion of prospects who are “right fit” (you want them to become a client)
- The rate at which “right fit” prospects go to an initial meeting
- The percentage of initial meetings that lead to a new client being taken on.
Take a moment to ask yourself two questions:
- Do you know your firm’s conversion rate?
- Do you know the other ratios mentioned above?
If you don’t, you have some work to do.
It’ll save you time and money, and help you to work more efficiently. So, it’s not all bad news!
It all starts with collecting data
To understand where you are now and, if necessary, take steps to improve things, you need the right data. There are 12 data points you should collect for every new enquiry.
And we do mean every new enquiry.
The first five are quite straightforward:
- First name and “known by” name (so you can personalise email communications and maximise open rates)
- Last name
- Email address
- Telephone number
- Date enquiry received.
The next few are rarely collected in sufficient detail but are where the data becomes really useful.
6. Do you want to work with the prospect?
It can take many months to convert a prospect into a client and, consequently, a relatively long time to understand your conversion rate. That’s dangerous. It could mean you’re spending money on tactics that aren’t working and not doubling down on those which do.
The solution? The 6th of the data fields we recommend you collect.
The answer should be recorded early in the engagement process, perhaps even after the first phone call. And it’s an initial indication of whether your marketing is generating enquiries from the right type of people.
7. Was a first meeting agreed?
The answer to this question helps to confirm that your marketing is creating the right opportunities and whether your engagement process is working effectively.
8. Did the prospect become a client?
The fact we need to record this information won’t surprise anyone!
It allows you to understand:
- Your overall conversion rate (all new enquiries to engaged clients)
- Your conversion rate from first meeting to engaging a new client.
9. The reason the prospect didn’t become a client
This allows you to understand the reasons why prospects didn’t become a client, identify trends, and put solutions in place.
10. The source of the enquiry
This is often missed or poorly recorded. Yet it’s vital if you’re going to understand which elements of your marketing strategy work, and which don’t.
We recommend using predefined fields to ensure data is consistently recorded, and training your team to ask the right questions so the correct source is identified.
Remember too, “source” is where the prospect first heard about you.
It isn’t “email” or “phone call”. That’s the method of communication.
11. The name of the existing client or professional connection who made the recommendation
Recording which clients and professional connections recommended you to others means you can:
- Understand the key centres of influence
- Appropriately thank the person who made the recommendation.
12. Revenue generated
Why would you spend money marketing your business if you’re not going to measure your “return on investment” (ROI)?
The return you get is a function of initial fees, plus the capitalisation of ongoing fees over a sensible period. Recording both allows you to calculate return on investment. Assets under management are also an important metric for some firms. If that’s the case for you, add it to the data you record.
A freebie to help you calculate your conversion rates
The moral of this week’s missive?
If you want to grow your business, it’s not always about creating an ever larger stream of new enquiries. Your conversion rate is equally, if not more, important.
As we said, the journey to improving your conversion rate starts by collecting the right data – and we have a freebie to help you do just that.
We’ve developed a template “enquiry recording” spreadsheet. As we head into the start of a new year, now’s the perfect time to change your processes so you’re collecting the right enquiry data.
If you want a copy, click here to claim it.
In the meantime, if you have any comments, thoughts, or feedback on this week’s blog, we’d love to hear it.
Email firstname.lastname@example.org or call 0115 8965 300 and let’s have a chat.