Webinar Recap: How to Evaluate ROI for Financial Professionals

Neil St. Clair, Vestorly’s Chief Growth Officer, recently answered the question: how can I tell if my marketing is working? Read below for his insight in the webinar recap.

“Half my marketing is wasted. I just don’t know which half.” – John Wanamaker

If you’ve felt like this before, you’re not alone. It’s a challenge facing all marketers, not just those in financial services (who, let’s face it, aren’t really even marketers at all). To get to the bottom of your results and dissect the success or failures of all your omni-channel marketing, keep it simple.

Keep It Simple Silly: Don’t Overcomplicate Your Metrics

KISS metrics are the top-level metrics you should analyze on a regular basis to avoid overcomplicating your tracking. The image here is an overlay of a traditional marketing funnel with a various omni-channel marketing distribution methodology. These endless statistics are a joy to marketing executives who analyze and review and tweak, but they’re not necessary for a financial advisor or registered rep.

The trick is to choose the top-level metrics most revealing for your firm’s marketing efforts. Begin by answering a simple question: How do you define success? To measure success, we must define it and acknowledge that it can exist at any part of the pictured funnel. Success for you could be a greater number of leads (the top of the funnel) or it could be more converted clients (at the bottom of the funnel). Perhaps success to you is five new clients in a particular client segmentation within a defined time period at a certain average AUM. If you can define this reasonably and metrically, and consider your historical success rates as well, then you can set benchmarks for your future success.

After defining success, measure it by choosing the three most meaningful metrics for you. Unless you’re a true marketing wonk, the countless possible metrics of success will distract you from your end goal. We typically find the best metrics for an investment advisor measuring marketing success are:

  • Frequency of new lead flow

  • Conversion ratio from prospects to clients

  • Average AUM of a new client OR time taken to convert the client

For any marketing tool or strategy you use or are considering using, define your metrics of success and compare it to your benchmarks. Any basic content or distribution tool will show email open rates and click through rates and engagement rates, but these metrics aren’t necessarily valuable to your bottom line.

Measuring ROI with Attribution Models

You’ve heard of attribution as it relates to investing, but it may be a new term as it relates to marketing. Dozens of methods to attribute results to your marketing efforts exist, beginning with first touch attribution. In this model, 100% of marketing value is attributed to a particular lead’s first encounter with the brand. For example, if a converted client first becomes aware of you through a social media ad you bought, you’d attribute the full ROI back to the cost of that social ad, allowing you to justify the expense.

This oversimplifies the process though. Perhaps the social media ad caught their attention, but a regular email newsletter created the opportunity, and an in-person meeting resulted in the close.

A linear attribution model accounts for the many touches required to actually convert a lead to a client. It typically takes about seven touch points to gain the full trust of a prospective client. In this model, those seven touches are spaced over a time period and the model allows an even percentage of attribution to every touch point.

Returning to our earlier example, the linear attribution model would say the original social media ad, the newsletter, and the in-person meeting were equally important in closing the customer.

This model is oversimplified as well and makes the most sense for free marketing, or very low cost events, even just in-person meetings and referrals, because it’s simply an an allocation of time.

Consider though, that you’re paying for social media ads which bring in many leads at the top of the funnel, and you’re paying thousands to sponsor and attend conferences. You may get more leads from social media, but the conference is responsible for brand lift and awareness and introduces you to prospective clients who are closer to the close. The linear model doesn’t account for these nuances and discrepancies.

A full-path or z-shaped attribution may be the true solution. This model evenly weighs ten percent of all touch points, and equally distributes the remaining ten percent to those conversion touches that got a lead through the toughest part of the decision funnel. This allows you to weigh marketing touches in a more meaningful way if you have a more complicated marketing model, like an omni channel model, a mixture of inbound and outbound leads, or a mixture of low cost to high cost then to free or earned.

This model works well for professional services businesses like wealth management. In an industry requiring perhaps six months to develop trust and convert a client, you need many varied touchpoints. A referral won’t simply close because they were referred. But they may after in-person meetings, newsletters, press pieces, or other touches. The z-shaped model accounts for the many steps and complexity between the first touch and the client close.

It’s an important methodology to understand because it allows you to calculate your ROI and reallocate resources based on what works, which is how any of these attribution models ultimately should be used, to iterate and optimize your future strategy based on historical performance.

Sound complicated? Take it back a step and consider what success is to you and how you define it. Begin with a simple attribution model and as you come to a more defined marketing strategy and deeper understanding of marketing, the z-shaped path can further assist you in determining your true ROI drivers.

Even a brief overview of attribution models and marketing ROI is more than most financial professionals want to know about. Vestorly is built on these principles for the financial services industry and provides data in return that directly contributes to your bottom line.

Did this answer your question?