Newsletter - December 2008

Financial Advisers Acknowledge That Marketing Strategies Need to Change
By David Lovell, Sales and Marketing Director

Matrix-Data Solutions the company behind www.MyLocalAdviser.co.uk, has recently conducted a survey of UK IFAs in order to gauge how the current financial market conditions were affecting their marketing strategies. The survey placed a particular emphasis on how ready IFAs were to use new technologies to improve their return on marketing investment.

It was no surprise that 75% of the respondents felt that the economic climate will be the major business challenge over the coming 12 months, but over 50% of IFAs surveyed have no previous experience of marketing in a recession. This lack of experience is well reflected in the fact that they realise that their strategies need to change - only 32% of companies were still confident of their current marketing strategy, and almost 90% of those surveyed agreed that they would have to change their marketing plans to some extent in light of recent global market events. Over 20% have put all marketing spend on hold for the moment.

But, despite a realisation of the need for a change of tactics, IFAs remain over-dependent on traditional marketing methods: whilst 42% of IFA firms rely on traditional advertising, more than any other form of prospect marketing, only 1% of firms appear to receive significant new business leads from this activity. This persistence with advertising, and the apparent poor return on investment, is stranger still when one considers that the overwhelming majority of new business leads still come from referrals (91.7%).

The last recession in the early nineties has been credited as the real birth of sophisticated Direct Marketing, in which marketers to precisely target their prospects, and carefully measure the return on marketing investment. The smarter marketing spend over the next 12 months is expected to concentrate on online and digital where marketing effectiveness can be assessed almost instantly.

So how prepared are the IFAs? There is a clear split between IFAs who are embracing new technologies, with 10% of IFAs very happy with their online strategy, and those who are lagging behind, with an amazing 28% of those surveyed still without their own individual company website. Even those who currently have a website do not appear to be taking full advantage of it, with 28% believing it does not generate real business for their company at present.

IFAs have quite rightly identified that existing customers should be the major focus in difficult times, and unsurprisingly 90% of those surveyed said they know their customers well or very well, and 97% can identify their most profitable customers. Because of strong client relationships only 15% are worried about client retention.

In this difficult market we recommend that IFAs conduct a marketing audit, part of which should be a review of all the technology available to them. This will help them focus on targeted cost-effective and measurable direct marketing. Cleaning any current databases of prospects and customers, ensuring you have a Single Customer View, and adding additional services to your website and enhancing your online presence, are all great starting points. There are a whole range of digital and online services which IFAs can use, for data cleansing, profiling and prospect marketing. Embracing online and digital marketing is great in terms of customer retention as well as acquisition, and can greatly reduce company marketing budgets.