Digital marketing has revolutionized the process of getting people to attend client prospecting events. A few years ago, direct mail was the only option. However, over the past two years, the retirement planning industry has experimented using digital marketing and social media as alternatives to direct mail. And now, digital is poised to replace direct mail completely.
I started working in the insurance and financial industry in early 2015. While new to this industry, I came with more than 20 years of experience in creative marketing services, with a strong focus on social media and digital promotions.
Upon arrival at my new position, I found a box full of seminar postcard and letter invitations waiting for me at my desk. As part of my training, I was asked to review the stack of direct mail in order to get a better understanding of what independent insurance agents and financial planners were using to attract new prospects to their events.
“Direct mail?” I asked, “Really? You’re still using direct mail?”
I quickly found out that in this industry, everyone was still relying on postcards and letters for inviting people to register for seminars and workshops. When I asked about developing digital marketing campaigns, I typically got these three answers:
1. The people we’re trying to reach aren’t on Facebook.
2. It’s a compliance issue. We can’t do this on social media.
3. We tried it once before, and it didn’t work.
And as far as I could tell, that’s about as far as this industry had journeyed into the digital world.
This was at a time when many of my new creative marketing peers were beginning to explore digital marketing as a way to supplement or even replace traditional direct mail campaigns. Independent marketing organizations across the country were beginning to experiment with Facebook Ads Manager, Google AdWords, and other digital platforms to see whether they could make them work.
At first, many of the campaigns failed. I ran several disastrous campaigns myself. Each time a campaign failed, I had to explain to my superiors why I was spending time and money on initiatives that weren’t working. But as we continued making corrections and adjustments to fix the broken campaigns, our industry was experiencing a sea change in the ways our target audience was consuming information.
In early 2016, the digital campaigns finally were beginning to work. Baby boomers had become the fastest-growing population on Facebook, and they spent more time on it than any other age group did. All of a sudden, people were registering online for events. And while the number of registrations for each campaign began to increase, the cost per registration plummeted.
What does it look like today?
Over the past two years, two digital marketing models have become the most popular ways to drive registrations to seminars and workshops. Both cost per household (CPH) pricing and flat rate pricing (FRP) have proven to be effective ways to get people signed up. Determining which model is best will depend on the financial professional’s experience and sophistication.
Cost Per Household
Some digital vendors offer a CPH campaign package, where the advisor pays a fixed fee for every household that attends the workshop. The vendor does all the heavy lifting for setting up and promoting the event, including booking the venue, running the social media ad campaign, and managing the registration and confirmation processes. Essentially, all the advisor needs to do is show up and give their presentation. Because the vendor is doing all the setup work and taking the risk on how many people actually attend, they charge a hefty fee for each household that shows up to the workshop — often $175 or more per household.
This is an appealing option for advisors who are new to the industry and looking for a way to begin doing workshops. Although the overall cost of the event can be high, the planning and the setup are all taken care of, making it easier for an inexperienced advisor to learn the workshop process.
The downside of this model is the price unpredictability. If the vendor is charging $175 per household for a two-evening campaign, and 25 people show up each night (approximately 30 total households), the advisor will be charged $5,250 for the campaign. But what if 40 people show up each night? Having a larger-than-expected turnout could cause serious strains on an advisor’s budget.
In addition, some advisors complain about the quality of the prospects that show up at the workshops. While the vendor did a great job filling the room (again, at $175 per household), they might not have done as good a job in attracting the right people. This is because they often are able to target attendees based only on age and where they live.
Flat Rate Pricing
Experienced advisors likely will find greater success from using the FRP model. Instead of paying a fee for each household attending the event, the advisor will pay a simple, fixed amount for the campaign.
Vendors who use this model are taking fewer risks on the front end of the campaign, and because of this they have greater flexibility on how they target their audience. Now, instead of only targeting based only on age and address, the vendor can micro-target their audience by filtering age, address, household income, investible assets and total net worth. This ensures that the only people who see the ads are the same people the advisor wants to meet.
Campaigns using the FRP model typically cost anywhere between $1,400 and $4,200, depending on how many total registrations the advisor is looking to receive. I recently talked to an advisor in Florida who held a one-day Social Security workshop. He paid $1,400 and had a total of 101 people register, costing him only $22.22 per household. Another advisor in Maryland recently held a two-day campaign for $2,700 and received 66 household registrations. She ended up setting 10 appointments from the events.
The main drawback to FRP is that the advisor is responsible for doing more of the work. The vendor manages the actual social media ad campaign and the advisor will need to take care of details such as booking the venue and making confirmation calls. But at a savings of often $2,000 or more per campaign, a well-staffed practice should be able to handle these tasks.
Which model is best?
Using an FRP model for your prospecting campaigns is clearly the strongest option. The combination of cost savings and increased lead quality more than make up for a few additional hours of booking venues and making confirmation calls. I’ve seen advisors employ this model in order to vastly expand their client base. Advisors would be well-served to look into implementing FRP campaigns to promote their events.