When it comes to growing your business, you are often reliant on the expertise of others who have been there and done that (or promote that they have), and you may miss their hidden agenda.
In 2006, I was getting my financial planning business off the ground and felt the time was right to find new clients. I chose to run a direct media campaign with a distribution of flyers to attract local interest as it seemed a simple and low cost option.
To help with the flyer layout, I spoke to a local graphic designer who I later found out was on a commission from the printer and distributor. The designer said the one thing they had learned from other campaigns with mostly product-orientated clients was that you needed to ‘go big’ in terms of numbers to ensure you get adequate response and to always promote a free offer to engage interest.
Now having earned a business degree in the 80s, I knew the rough response rate for successful direct mail campaigns was low at under 4%, and that only 50% of prospects become clients. So I went large — and I mean huge — with my ‘Free Financial Health Check’ offer. Big mistake!
For the next six months, what I found out was that all the free advice junkies — the ‘tyre kickers’ and ‘serial shifters’ — were drawn to my flyer, resulting in months and months of wasted effort that nearly crippled my business.
Let me explain the types of respondents I received in a little more detail:
- The free advice junkies will accept any free offer. They have the time and patience to seem like great potential clients, but they will never (and I mean never) make a final decision or pay for advice. These people consumed weeks of my time with no positive effect on my bottom line. Many even said they valued the interaction and would recommend me to others.
- The ‘tyre kickers’ are found in all sectors. They are the people who focus only on the cost and see little or no value in different service levels or quality offers. They view everything as a one-size-fits-all product or service and want to ensure they save money at all costs. Unfortunately, there is always a competitor willing to go a few dollars cheaper, so again I wasted a lot of time to no benefit.
- ‘Serial shifters’ have a habit of moving from one service provider to another in search of the next best thing. One bad quarter in the share market, and they feel the need to move to a new financial advisor and forget the big picture. They never stay with one provider long enough to value a relationship. While I discussed superannuation strategies and long term tax planning, they talked about last week’s best and worst share price movements.
The big problem was that with financial planning, like many other services, there are no shortcuts to providing advice. As such, each respondent took up hours (if not days) of my time in providing my free offer that led to little or no paid work or long term clients.
I now realise that most people actually choose their financial adviser through word of mouth from a trusted source such as their family, friends or accountant. Thus, it is far better for anyone in the service industries to spend time cultivating referral relationships with people you have built trust and confidence with rather than using flash marketing.
I also learnt that you need to adapt your business development and marketing plans not only to the type of client you are targeting, but also to the nature of your service or product. Offering a free taste of your service may not only attract the wrong type of prospect, but it may also alienate desirable clients who discount your offer because they know that good advice costs money.
So be careful whom you take advice from, and always consider any ideas in terms of the pros and cons for your particular business, as what can seem like a low risk marketing campaign can tie up valuable resources for months.