(full article below for those who love reading…)
by Tammy de Leeuw
Leads: Like crack for financial advisors?
As a financial advisor, insurance agent, or other self-employed financial professional, you understand why I have said for years that “leads” are the crack cocaine of our industry. Over the past decade, I have seen my financial services family flailing away in desperation, hoping to land one or two of those elusive HIGH NET WORTH individuals the lead companies pretend they’ll deliver. Like addicts chasing the next fix, many advisors and agents fall off cliffs after spending all their kids’ college money, getting little to nothing in return.
Generating leads is vital to any successful financial services business. Without leads, there’s no pipeline of prospective clients to grow your client base, increase assets under management (AUM), and secure long-term revenue. Leads represent opportunities to create relationships that expand both brand awareness and client trust. This increased trust often leads to sustained business growth. Here’s why focusing on leads can make a big difference in your practice:
- Leads help you SUSTAIN your business: Even if you are currently KILLING it in financial sales, a steady stream of leads can help you stay on track. A full pipeline lessens the impact of client attrition and ensures your database stays fresh and vibrant.
- Leads can help you discover new markets: Leads open doors to new markets and demographics, helping diversify your client portfolio and potentially increasing your revenue base.
- Engaging new leads grows your brand: Engaging more prospects increases your visibility and develops more brand recognition. The more you spread the word about who you are and what you do, the easier it will be to get organic referrals and GROW.
- Lead data gives you more insights: Lead generation data can reveal client preferences and emerging trends, empowering you to refine your marketing strategies.
Self-generating leads is typically better than buying leads, but it takes a lot of time and effort.
Homemade bread is usually better than store-bought bread, right? The same goes for self-generated leads. Leads that you get yourself are “tastier” than store bought leads. There’s a certain satisfaction that comes when a new prospect tells you, “I saw your article in Forbes” or, “I heard you on a podcast recently.” When you create your own leads, you’re able to tailor your outreach and dial in your ideal demographic. This ensures better alignment with your particular expertise. On the other hand, purchased leads sometimes include contacts who don’t fit your services, wasting your time and resources.
Becoming your own source of leads benefits you in many other ways as well. For example, a lead you make by doing a live event (my hands-down favorite method of lead generation) is much less likely to get pounced on by a ton of other agents and advisors and made to wish they’d never filled out that stupid form. Also, unlike most purchased leads, having your own lead source eliminates the need for manual data verification and having to “warm up” someone who’s never heard of you.
Unfortunately, if creating a custom lead flow program were easy, all of us would be doing it, right? Having tried nearly everything over the years, I can tell you that lead generation is one third technology, one third creativity, and one third pure luck. It’s a lot of work, frustration, and time-consuming back and forth. That’s not fun or productive for most agents and advisors. Happily, there is a solution, a hybrid model for getting more clients to the table that I encourage my advisors to look into. I’ll tell you about that later. Meanwhile, here are my basic strategies for agents and advisors who want to get at least a few of their own quality leads.
Strategy #1: In these times, you need to provide demonstrable VALUE and establish trust.
No matter how clever your marketing, how bold your content, or how absolutely brilliant your financial advising strategies are, you are nothing without trust. Building trust with prospects is essential in any business, but especially so in financial services. When people Google you and find only bad, confusing, or incomplete information, they are less likely to answer the phone, much less do business with you. Don’t kid yourself. Even Granny knows how to do a basic Google search and she WILL. Even worse, in my opinion, is when Granny finds nothing at all about you- not even a photo of the Little League team you coach. For this reason, you should always bring value by providing resources and educational content, tools such as calculators and rate charts, or webinars and podcasts showcasing both your expertise and charming personality. For instance, Bryan Anderson, founder of Annuity Straight Talk, uses a content-rich website and an exceptional podcast to build trust with visitors and generate leads. Bryan is something of an outlier in that he scripts and produces his podcast himself, and he also writes a newsletter and offers a book. It’s a ton of work that has paid off handsomely over the years.
Strategy #2: You could “reverse engineer” social media.
Again, this is a very time sucking endeavor and not for those easily distracted or bored. Reverse engineering social media means you need to like social media at least a little. You’ll spend time on forums, websites, review sites, even reading comments under ads that pop up on a social media feed. If you’re a research nerd or you enjoy playing detective, this can be kind of fun. You might be able to see exactly what prospective clients want in an advisor, discover what’s keeping them awake at night, and find out what aspects of financial planning confuse them. You can see what topics and ads attract your audience’s attention and then use platforms like LinkedIn and Facebook to distribute ads and other content that resonates with that target audience. All of this is ultimately helpful and useful of course, but can you afford the time to do it? Still, social media continues to have a place in lead generation for financial advisors. A recent survey found that 40% of advisors say they have gained clients through social media.
Strategy #3: Referrals- the holiest grail of lead acquisition.
Now, this might sound antithetical, but many lead generation experts say there is a low correlation between satisfied financial clients and referrals. (Wait, what?)
As odd as it may seem, recent studies indicate that only around 20% of satisfied clients/customers refer a product, service, or business. This applies to actions such as leaving reviews as well. So, if these folks are happier than clams on a sunny beach, why don’t they refer their friends, family members, and colleagues or give you five stars?
Referral expert Bill Cates says that getting referrals requires two distinct elements often overlooked by agents and advisors: Engagement and connection. The difference between an engaged customer and one who is merely satisfied is that those who are engaged TRULY understand and appreciate your value. These people “get it,” and they are often your biggest cheerleaders.
The other difference between those who refer you and those who do not is CONNECTION. Connection is the feeling clients have when they believe they are part of a family of like-minded individuals. For instance, you might be a former firefighter who now helps other firefighters build better retirements. Or, you are devoted to helping clients legally reduce their tax liabilities. Maybe you are all about advocating for seniors or young families. Whatever the case, when your clients feel connected to you in a strong way, they are much more likely to invite people they know into your circle.
In the twenty-odd years I have worked with financial advisors, referrals have reflected the gold standard of leads. Referrals are a cost-effective way to increase your client base, so they are absolutely worth pursuing. But, you have to do it the right way. As with other forms of self-service lead generation, building a referral-based business is hard work that will eat vast chunks of your time.
Why it’s good to buy SOME leads.
Seldom do I recommend that an advisor purchase large data lists from brokers. That’s because not only have most of these quasi-leads been handled more than a cell phone at a Taylor Swift concert, they often contain inaccurate, stale data. Many list brokers sell the same lists to anyone requesting them. This could mean that people on the “annuity leads list” you bought will be getting bombarded by telemarketers trying to sell them everything from water filtration systems to time shares. Things could get ugly very quickly.
Plus, with a list, it will be up to you to sort and clean that list, design a compelling drip system, and remove all the bad data. List hygiene is much more involved than simply tossing out an individual lead you’ve purchased. Lead generation is one place where size really doesn’t matter. It’s possible to make ten times more from a list of 1,000 actively engaged and interested prospects than you’ll make from 100,000 essentially cold leads on a list.
Purchasing individual leads, however, has the potential to give you an instant WIN. Being able to hit pay dirt more quickly is helpful if your sales pipeline is empty or you’re expanding into a new niche. However, as I mentioned previously, purchased leads may not always align with your ideal client profile, so you need to ensure the quality of every lead you buy and learn the correct way to work those leads. Here’s when buying leads might make sense:
- Your sales pipeline is depleted: Even if you are a seasoned advisor, you could find yourself struggling to generate leads and keep the flow going. A few purchased leads can give you short-term relief while you work to establish or refine your organic lead generation protocols.
- You’re trying a new niche: Established agents and advisors sometimes hit a plateau in lead generation. Tossing in a purchased lead or two can keep your marketing fresh by helping you reach new demographics. For example, one advisor I worked with decided he wanted to work with more government employees. He was able to purchase a lead list and create an automated drip that brought those types of people into his business.
- You’re expanding your products and services. Maybe you are long-time insurance agent who’s decided to offer more annuities. Or, you’ve gotten your securities license and can now do more for your clients. Expanding into a new line of offerings may mean you’ll need to reach a different audience than you currently have. Purchased leads can provide a jump start and help sustain you until you have organic lead-generation channels in place.
What should you look for in a purchased lead?
When you do decide to buy leads, quality matters. Nearly every agent I know has had horrible experiences with lead brokers. Here’s what to look for to make sure you’re getting the best value:
- Alignment with your ideal client’s profile. A high-quality insurance or financial services lead is more than just a collection of accurate data points. A quality lead must fit your definition of an “ideal prospect.” For most agents, the perfect prospect is a lot more than someone who breathes through their nose and can walk and chew gum at the same time. Agents want clients in the correct age range, the right geographic location, and who are somewhat invested in their own financial success. In other words, you don’t want someone who’s lazy, uncooperative, and needs a ton of hand-holding and encouragement. (Come to think of it, I don’t want AGENTS like that either!) Like most normal humans, agents want to work with nice people who aren’t dumb as lumps of coal and who appreciate the advantages of having a trusted advisor. Unfortunately, a lot of lead sellers do not vet leads to ensure they meet even the most fundamental requirements. There are a few companies who claim they “set appointments with qualified prospects”. Unfortunately, the company’s idea of a “qualified” prospect may be vastly different than yours. Also, a lot these appointment setters operate from overseas and may be paid primarily through a suspect commission structure. Getting paid only if they deliver a lead means telemarketers are under pressure to set appointments, even when the prospect sounds disinterested, grouchy, or lives in a van down by the river.
- A quality lead must actually NEED your product or service: A high-value, properly-vetted prospect always has an identifiable problem or need. Obviously, a person who is concerned about some pressing money issue is much more likely to convert into a sale. How many times have you paid a hundred dollars or more for a prospect for whom annuities were unsuitable? Or, you told the lead company that you like to meet clients face-to-face but got leads that were hundreds of miles away from your office? If you want any chance of converting, you must start with a reasonably qualified lead who truly needs what you have to offer.
- Are they EVER going to buy? I always say that a “no” in financial services sales just means “Not right now.” Still, if you buy leads, ask the company to only look for prospects who are actively exploring financial services and filter out those with a mere theoretical interest. Providers with high intent to buy leads typically yield a better return on your investment.
Understand that leads, even high–value leads are merely invitations, not guarantees. I can shout it until my face is as purple as a grape-“A lead is not a guarantee!” Even the most efficient, honest lead company will not give you leads that are 100% guaranteed to become clients. There’s a nearly immutable law in the lead generation business that says approximately one out of ten leads eventually turns into a viable client. Count on buying at least ten leads before you haul in a “big one.” Oh, and by the way, you’ll actually have to WORK your leads properly to get that result.
Many agents think that ponying up big bucks for leads that your colleague is having success with or that an FMO provides you at a bargain price is a sure-fire way to get new clients. That is seldom the case. The real x factor in making leads pay off is the degree to which an agent or advisor is willing to work them. Lead nurturing is essential, especially when you think about how many people have experienced online fraud or who have been ripped off by unscrupulous agents, brokers, or financial advisors. Don’t buy leads unless you are willing and able to do the work it takes to turn them into raving fans. That could even entail (gasp!) meeting them in person or doing a Zoom call. When you buy or even self-generate a lead, you must act as if that person is looking for any excuse to not do business with you. Because, in, fact they ARE. It’s up to you to do what’s needed to break down the walls and create trust. Don’t waste your time and money if you aren’t going to follow up and follow through.
Do the math!
The cost of a lead will vary significantly based on industry, list size, quality, and provider reputation. But trust me when I say that if someone is offering you a supposedly “vetted” lead with a set appointment for less than $175 each, something’s wrong. In fact, $175 is likely too cheap for a quality lead unless perhaps the company or their callers are based overseas or they use some kind of AI robo-dialer to keep costs down. You must do the math and ask yourself some critical questions such as:
How much can I afford to spend on leads before I get a hit? How does purchasing leads mesh with my other marketing efforts? Can I afford to spend $3,000 on leads if there is a good chance I’ll make $10,000 in commissions? (*if you answered “No!” to this question, please change industries immediately. Working with money is obviously not your thing.) Whatever you do, evaluate lead costs against your expected conversion rate to be sure this investment makes sense. Advisors typically want a 10%-20% conversion rate to gain 10-15 clients per year.
Bottom Line
Building a successful lead generation and conversion strategy is a hybrid strategy involving both organic efforts, such as reputation and content marketing, along with the addition of purchased leads or curated lists. With the right approach, you will always have a steady stream of qualified leads, ensuring your services reach the right clients and create long-term business growth.
If you are serious about learning a hybrid approach to lead generation, make an appointment with me. We’ll discuss your particular situation and needs and come up with the most cost-effective and efficient ways to meet those needs.
