As you think about growing your registered investment adviser (RIA) firm, investing time and money in to online marketing efforts may be the next step. As you start to trickle down this path, you are sure to run across different terms and acronyms which encompass the world of internet marketing. Here is a quick guide of some of the internet marketing terms you’re likely to encounter and their relevance to an RIA firm.
CAC: Client Acquisition Cost
The total sales and marketing costs including direct marketing spend, allocated salary overhead, etc. spent to acquire a single new client. For an RIA firm just beginning to experiment with online marketing, the online marketing channel’s cost should be tracked against other more traditional offline marketing channels such as direct mail or seminars. Most investment advisory firms do not bring on a large number of new clients in a given month or quarter, so it’s important for advisors to look at this statistic over longer periods of time to ensure there is sufficient data.
CPL: Cost per Lead
The amount it costs for a firm to acquire a new lead. While CPL is an important is an important metric for an RIA firm to track, be careful not to simply optimize around increasing the overall volume of leads. Instead, focus your RIA firm’s online marketing efforts on targeting the right type of prospects.One new high converting lead is worth quite a bit more than a bundle of low quality leads.
CR: Conversion Rate
The percentage of visitors or prospects that complete a desired action on a page such as filling out a form or registering for a webinar. In general, the higher the conversion rate the more successful the campaign. Landing page conversion rates are a common metric which is tracked and firms doing large amounts of online advertising should try and optimize around conversion rate through various A/B testing experiments.
CTA: Call to Action
A word, message, or image that urges readers to take an immediate action. Hosting a webinar? Use a creative CTA to draw the eye of invitees to submit their registration form and increase conversion rates.
CTR: Click Through Rate
The ratio of users who click on a specific link to the number of total users who view a page. For example, you have 1,000 people view your blog post, and 50 of the 1,000 people click on the link contained within the post. In that scenario, your click through rate is 5%. The figure is derived by diving number of clicks by number of page visits. However, much like we discussed in regards to CPL above, be careful not to solely optimize around CTR. A low CTR that attracts the right type of prospects can still be very effective.
Keywords:
Words and or phrases describing your RIA firm’s service(s) that you’ve determined are relevant and try to optimize content for. In general, there are two types of keywords:
- Short tail: Generic search terms that generally target a broader group (e.g. “financial advisor”).
- Long tail: A highly specific search phrase that tend to be searched by potential consumers who know exactly what they are looking for (e.g. “fiduciary financial advisor for doctors in Cleveland”).
For most investment advisory firms, long tail keywords will be the most productive in driving potential clients given the regional and niche focus of most firms.
MQL: Marketing Qualified Lead
Marketing qualified leads are the leads at the top of the funnel. These are the prospects who’ve raised their hand and have taken some form of action. They’ve downloaded a white paper, subscribed to your blog, or have engaged with your RIA firm in some way.
PPC or CPC: Pay per Click or Cost per Click
The price you pay when someone clicks on an ad to visit your site. Most forms of online marketing for small businesses such as RIA firms will be priced on a PPC or CPC basis. Most forms of online search engine marketing and social media advertising will be priced as such. However, some online networks and channels will instead allow advertisers to pay on a cost per thousand impressions (CPM) basis.
SEO: Search Engine Optimization
Strategic practices that help rank your website higher in organic search results for prospects who are looking for the services offered at your firm on search engines (i.e. Google, Bing, Yahoo, etc.). The goal of SEO is to rank high in search engine results. As this heat map of sample Google search results reveals, ranking number one or two for a targeted search phrase is exponentially more valuable than ranking towards the bottom of the top ten results. As such, most RIA firms should consider focusing on long tail keywords than tend to be less competitive to rank for compared to broad, short tail keywords. In most instances, a well executed strategy offers the greatest return on investment (ROI) to an investment advisory firm attempting to market online.
SEM: Search Engine Marketing
SEM is also commonly referred to as “paid search.” This is the process of marketing to potential clients through paid search engine ads through platforms such as Google AdWords or Microsoft Bing ads. Given the high value of financial advisors, many high traffic search engine keywords will be quite expensive to advertise on. To provide some perspective, the Google Keyword Planner tool estimates that the cost to place an SEM ad for the following “financial advisor” related keywords to be as follows:
As such, traditional RIA firms thinking about exploring an SEM online marketing strategy need to be careful as the costs to experiment can be significant. However, there are definitely some investment advisory firms that do experience a strong ROI with an SEM advertising strategy in certain local markets.
KPI: Key Performance Indicator
A metric used to evaluate the success of the business. In regards to evaluating online marketing success, RIAs may consider evaluating KPIs such as changes in website traffic, new leads created, new clients won, and new assets added. Ultimately, an increase in website traffic should lead to an increase in lead volume that leads to new clients and finally more assets under management over time. However, this process requires quite a bit of patience in the early days.
CRM Software: Client Relationship Management Software
Software designed to help manage your firm’s interactions with current and prospective clients. Such software allows you to track and store contact information, emails, calls, outstanding agreements and appointments. Our guide to RIA CRM software walks firms through the various options available to investment advisory firms of all sizes.
So what’s next? Before you get off and running with your ideas, it’s important to note a few things that should be done to create a successful online marketing campaign:
- Invest time upfront to develop a clear plan and strategy and to determine how success will be measured.
- Carefully define your target market and build a campaign designed for that target.
- Actively monitor the results and continue to tweak your campaign as necessary.
As RIA compliance consultants, it’s important for us to remind you that all online marketing content should be reviewed, archived, and treated just like other forms of advertising.