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Spaghetti Sauce, Content Marketing and the Future of Financial Advice

Since the dawn of the financial advice industry, financial professionals have created value propositions centered on the intangible qualities they provide investors. The focus on these qualities—including face-to-face interactions, the promise of a genuine personal relationship and emotional support—has only grown stronger as the robo-advisor revolution has gathered steam.

The industry has pegged these qualities as key differentiators between human financial professionals from machines. Data from Charles Schwab, however, offers a potential challenge to this line of thinking.

The study found that investors in the Millennial and Gen X generations were not only less willing to pay for professional service from advisors (only 44 and 47 percent respectively), but they were also less likely to want to discuss investing strategies with a professional (49 and 48 percent) than their Baby Boomer counterparts (55%). Although it’s not necessarily a surprise that Millennial and Gen X investors are more likely to prefer to automate investing decisions (51 and 52 percent), it is interesting that 39 percent of Baby Boomers and 33 percent of Matures listed automation as their preference.

Regardless of how you choose to read the results, it would be difficult to disagree that the advent of powerful technology in the advisory space has introduced at least a question in investors’ minds as to how they should be managing their money. The solution is certainly far more complicated than a simple “man vs. machine” scenario, but may require a few steps outside the box. I believe the “why” behind these results has less to do with the actual value of a financial professional’s services and everything to do with spaghetti sauce.

Human Financial Professionals and the “Extra Chunky” Phenomenon

I love a good TED Talk. One of my favorites comes from Malcom Gladwell—“Choice, Happiness and Spaghetti Sauce.” In this talk Gladwell tells the story of Howard Moskowitz, whose revolutionary approach to buyer behavior and happiness brought the world “extra chunky” spaghetti sauce.

Moskowitz was a consultant in the 1970s when the prevailing marketing mantra was to “give your customers whatever they say they want.” In working with a wide range of companies, Moskowitz found that, while human beings will certainly tell someone what they like, their “wants” can only exist in the frame of reference of products already available. In other words, we may want or need something that doesn’t yet exist.

Moskowitz was eventually hired by Campbell’s Soup, makers of Prego spaghetti sauce. Prego, and its primary product, a “traditional” tomato sauce, was struggling mightily against competitor Ragu. Using his theory, instead of trying to perfect the original recipe by asking what people did and didn’t like about Prego, Moskowitz created 77 completely different kinds of spaghetti sauce and asked people to test each one.

While the diversity of the responses was incredible, Moskowitz found that people could be filtered into three categories: plain, spicy and extra chunky. The biggest shocker in the results was the number of people who chose the types of sauce that could be placed in the “extra chunky” category. This finding was shocking because, at the time of the study, there was no such thing as “extra chunky” spaghetti sauce, lending credence to Moskowitz’s hypothesis.

I think there are similarities between the original approach to spaghetti sauce and the way today’s investors view the value of human financial professionals. Just over half of the respondents to the Jackson study had ever met in person with a human financial professional. The value of these intangibles relies completely on a personal relationship, yet respondents hadn’t ever had the opportunity to interact with a human financial planner.

From this perspective, the reason many investors view these services as an unnecessary expenditure is likely because they’ve either been successful without the support in the past or they are simply afraid of paying a substantial amount of money for an unknown. In other words, they’re just fine with the traditional spaghetti sauce because they haven’t been exposed to the “extra chunky.”

You’ll recall that at one time we didn’t see a need for the telephone, the Internet, personal desktop computers, or smartphones—until we saw what the products could do. Moskowitz showed us that human beings don’t know what we really want or like until the product or service becomes available.

Consumers’ lack of understanding is often coupled with a fear of the unknown, which is generally bolstered by sensationalistic media content. Thus, human financial professionals are at a disadvantage in proving their value before they ever get a prospective client in the door. So what do we do?

Proactive Education Through Targeted Content Marketing

A successful relationship between a human financial professional and an investor is founded on implicit trust. To prove their value to investors, financial planners must first work to build a solid level of trust with prospective investors—which is easier said than done.

Although trust in financial services has increased in the last few years, the 2017 Edelman Trust Barometer showed that the industry still held the lowest level of trust of all sectors. To make matters worse, coverage of the Department of Labor fiduciary conversation from both sides of the aisle has further muddied the waters for consumers.

However, there’s opportunity here. Trust is something we can work together to rebuild and content can be an important part of the solution. To use banks as an example, a study from NewsCred revealed that, while one-third of those surveyed don’t trust their own bank, half of those respondents said they trust the bank more when they offer helpful content. Another 50 percent of respondents say that offering helpful, useful content delays their desire to switch banks. Thus, it’s clear that a certain type of investor looks at content as a factor in decision-making and trust when it comes to their financial services relationships.

But what about the other side of the coin? A survey from marketing agency Kapost showed 76 percent of financial services professionals also believe content marketing is the best way to regain trust. In my opinion, there are three main reasons why content may be able to assist financial planners in both building trust with prospective clients and representing their value propositions in a difficult climate.

  • The Importance of Common Ground. When attempting to address a discrepancy, it helps to find common ground. In the financial services industry, it can be difficult to find consensus, regardless of which group is being surveyed. Financial services providers, planners and investors are categorized quite broadly, but the individuals within these groups are extremely diverse. In the case of content, based on the above statistics, investors and financial services professionals mercifully agree. Usually, when you find this type of consensus, it can pay to act on it
  • The Correlation Between Trust and Relevant, Useful Content. Educational, product-agnostic content inherently allows marketers to build trust. Unlike advertising, where too much volume or overly aggressive messaging can hurt a brand or business, content allows us to demonstrate our intent, expertise and value one piece at a time, constructing a consistent, case for trust over the long term. If your content is truly engaging and relevant to prospective investors, you’ll be doing more than just building trust; you may be delivering that “extra chunky” recipe investors have been waiting for.
  • The Value of Targeting Different Groups With Specific Messages. Content allows planners to target very specific messages to different types of clients. As Gladwell mentions in his TED Talk, Moskowitz’s novel approach to spaghetti sauce, and behavior in general, wasn’t an attempt to find the perfect spaghetti sauce, but to find the perfect spaghetti sauces. In other words, he showed that brands should embrace the variability of their target client groups, as striving for universality casts far too wide a net.

Moskowitz chose to place the spaghetti sauce tasters into distinct groups (plain, spicy and extra chunky). This is a valuable point for planners in terms of segmenting content for prospective clients. While a financial professional can’t be everything to everyone, it’s important to attempt to place prospective investors into a few select categories and to tailor content for each specific audience. One way to do this is to review your existing client base and choose your top 10 clients based on the attributes you look for in an ideal client. From there, choose the attributes that you find most important in the planner-client relationship and use them to separate clients into different categories. If you end up with too many similar clients, try starting over with a larger sample size.

In Summary

If a financial planner can just get investors in the door for a meeting, then they’ll see the light and the problem will be solved, right? Of course not. I’m certainly not saying that content is the magic bullet to eliminate the mistrust and fear of the unknown that make today’s investors hesitate before considering a relationship with a human financial professional. But do I think that providing relevant, valuable and free content to prospective clients can help planners begin to chip away at these issues? Absolutely.

The data surrounding the unwillingness to pay for intangibles such as emotional support, face-to-face interaction and an authentic relationship should serve as a catalyst for planners to learn how to articulate their value to existing and prospective clients. And I firmly believe that content marketing can be a highly effective tool to help planners do that.

This is a piece of a whole effort—including asking for referrals from current clients, getting yourself out there in the local community by attending events and sponsoring charity work—to help investors get to know “the real you.” Because it really comes down to authenticity. If prospective clients can sense your sincerity, you’ve already overcome the most important hurdle. Expertise, knowledge and skill are all implied, but trust must be earned.

Dan_Martin_Headshot
Dan Martin is the Director of Marketing for the Financial Planning Association, the principal professional organization for CERTIFIED FINANCIAL PLANNERTM (CFP®) professionals, educators, financial services professionals and students who seek advancement in a growing, dynamic profession. You can follow Dan on Twitter at @DanW_Martin

 


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5 Tips to Help You Take Charge of Your Social Media Strategy

If your biggest challenge as a financial planner is finding and acquiring new clients, you’re not alone. Nearly two-thirds of financial planners recently surveyed by the Financial Planning Association listed “client acquisition” as their top challenge.

And yet, the money and skillset required to come up with an effective prospecting—and what it might take to execute the plan—can make attracting new clients seem impossible.

While certainly not a magic bullet on its own, social media can be a cost-effective way to build your personal and professional brand and connect with potential clients in a genuine, authentic manner.

This post offers five tips to help clear up common misconceptions about using social media in business and to help you begin building a social-driven prospecting strategy from the ground up.

1.) Recognize the Uses of Each Platform. One mistake when using social media is to immediately build a profile on every platform without thinking through how to create or curate content for each separate entity.

Placing the exact same content on multiple platforms can make your brand look lazy and out of touch. What works on Instagram may be the opposite of what drives engagement on LinkedIn. Further, creating and curating the amount of content required to run a functional blog/website and generate activity on four to five separate social platforms is simply not an option for most small businesses.

Avoid the temptation to build a profile on any social outlet until you have worked out why and how you plan to use the platform. Here are a few tips on some of the heaviest hitters:

LinkedIn is primarily a professional network, and the content that performs best on the platform follows suit. Investopedia reports in its article “LinkedIn: How Advisors Can Use It to Grow” that nearly three-quarters of U.S. advisers maintain a profile, so it may be a good place to look at focusing your initial efforts.

Facebook and Instagram are more personal, with Instagram focusing heavily on imagery. This is not to say that you can’t or shouldn’t have a profile on these platforms, as many advisers do—it all depends on the type of clients you’re trying to reach, the content you are looking to create and/or share and whether you can support many platforms at once.

Twitter is essentially a newsfeed and, while the content required for each post is smaller in volume (140-character limit), the platform requires a larger volume of posts to maintain a semblance of activity.

2.) Find Your Formula. Businesses that use the social platforms for promotion often treat the content as a one-way street to aggressively push product and sales-related information. In his blog post “Why Content is Fire and Social Media is Gasoline,” marketing guru Jay Baer said, “Social media was not intended to be the world’s shortest press release.” I believe social media was designed to replicate human conversation, and building a healthy following is dependent on how well you tell your personal and professional story.

While advisers are somewhat limited in how much they can engage in two-way discussions on social media, one area that can make a major difference is in how you curate and deliver content. If your profile summary, original posts and retweets on Twitter reflect the tone of a sales brochure, you risk driving people away.

Instead, as you’re crafting your profile, writing your first few posts and deciding what to retweet or share, think about how you prefer to get to know someone when you meet in a face-to-face conversation. What do you want people to know about you? What are the things that are most important to you? What defines you? Answering these questions will help you frame your presence in a way that best reflects who you really are.

My good friend (and social media expert) Steffen Kaplan (@SpinItSocial) shared a formula for building an online presence that I have found to be unbelievably valuable, especially when it comes to attracting followers on Twitter. He recommends parsing the content you create, what you share and what you like into three separate buckets: one-third of your posts should be designed to create awareness about your business (think of this as your “branded” content), another third should be personal (answering the questions outlined above) and the last third should be content designed to engage and inspire (quotes, photos and videos that might make others smile).

3.) Share Content That Tells Your Story. Most advisers know they need to do a better job promoting their practice and value proposition, but many don’t consider themselves to be marketers or know where to start in communicating with prospective clients. In the past, promotion didn’t matter as much, as a high percentage of new clients came via referrals from happy customers.

In today’s world, communications should be more persuasive and educational than a simple list of your services. But who has time to create all that content and send it to the right people at the right time? The beauty of the level of saturation in the blogging and social media world is that you don’t need to spend all your time creating your own materials—you can easily find educational content that you appreciate and share it with your clients.

When you share content, you are advocating for the message of the material, and that’s often the closest thing to putting your name on it. Beyond saving time and money, shared content comes with its own set of advantages as it allows you to send powerful messages from a credible third party. Relevant, useful and valuable content is an effective way to build trust with current and prospective clients. As content marketing expert Drew Davis puts it, “Content builds relationships. Relationships are built on trust. Trust drives revenue.”

4.) Don’t Overdo It. You don’t have to post content 50 times a day to be successful. Sure, social media requires creating and posting content with a high level of frequency, but that doesn’t mean you must spend your entire day brainstorming your next tweet.

Like any other marketing medium, social media success depends on the quality of the content you distribute—including the actual post, the attached image or GIF and the post’s linked content. To help focus on quality over quantity (and maintain your sanity), create a simple editorial calendar and plan out posts for each week or month. You can find countless free content calendar templates with a quick online search, but a traditional printed cat or firefighter calendar will also work just fine.

5.) Have Fun! Seriously, have some fun with it and do your best to be you. Your readers and followers will appreciate it, and it will make your content better in the long run.

Happy Tweeting!

Disclaimer: Before you go down this path, it’s important to understand FINRA’s regulations surrounding the use of social media, as well as any guidelines provided by your broker-dealer or RIA, if applicable.

Dan_Martin_Headshot
Dan Martin is the director of marketing for the Financial Planning Association®, the principal professional organization for CERTIFIED FINANCIAL PLANNER (CFP®) professionals, educators, financial services professionals and students who seek advancement in a growing, dynamic profession. He is an award-winning author with a diverse financial services industry background in marketing and communications. He earned a journalism degree from the University of Denver and his MBA in marketing from the Daniels College of Business.