How To Close More Top-Of-Funnel Leads

Strategies Include Social Proof, Understanding Client Readiness And Assessing Your Team
Andrew Johnson, Co-Founder & CEO, Testimonial iQ
Andrew Johnson, Co-Founder & CEO, Testimonial iQ

Slow organic growth continues to confound many advisors, contributing to the rise of prospect referral platforms such as Smart Asset, Datalign Advisory and Zoe Financial. For many firms, these technologies have become a core part of their growth strategy, but others have found that the processes that work to close referrals don’t always adapt to other lead sources. Even some of the most digitally savvy advisors aren’t equipped to nurture top-of-funnel leads and struggle to convert them into clients.

Learning to close top-of-funnel leads from paid sources gives firms a competitive advantage in a world with slowing organic growth. They gain access to diverse streams of new prospects. Given the high lifetime value (LTV) of clients in this industry, firms that can convert traffic from paid channels access a huge opportunity, even with “expensive” leads.

What can advisors do to set themselves up for success before partnering with lead generation firms?

Understand The Differences Between Lead Quality And Prospect Readiness

Many advisors report closing qualified referrals at rates of up to 80%. Compare this to SmartAsset’s base case assumption of a 3% close rate. Even with a close rate nearing 20%, advisors using Datalign Advisory still lag behind client referrals. Do close rates significantly below what financial advisors are used to mean these leads are poor quality?

Not necessarily. The close rates by themselves don’t mean much without data on the cost per lead and prospect AUM, and it is clear that financial advisors have been able to build profitable businesses through partnerships with lead generation firms. The biggest distinction between leads from these referral services and actual referrals from clients is not “quality,” it is simply where those prospects are in the buying process.

The biggest distinction is simply where prospects are in the buying process.

Andrew Johnson, Co-Founder & CEO, Testimonial iQ

When a client provides a referral, the client is not only familiar with things like minimum AUM, but many also had conversations with the prospect about the pain points that led to the introduction. Taking it a step further, they verified the prospect’s interest in connecting with the firm. In essence, they completed the qualification and pre-selling work for the advisor.

Assess Your Teams’ Strengths And Time Constraints

Not all advisors have strong closing skills. This isn’t an indictment on their skill as an advisor, it’s a natural consequence of sales requiring a different skillset from financial guidance. Leads are expensive and so is the advisor’s time. Funneling purchased leads to advisors who are not comfortable with top-of-funnel prospects is a recipe for frustration (and losing lots of money).

With a cold prospect, the first meeting isn’t about closing. It’s about building enough trust to earn the opportunity to speak again. This means you are going to be spending more time total with these types of prospects. Review the bottlenecks of your process. If you flood your system with more leads than you can handle at any stage in the process, your prospect experience and conversion rate will suffer.

Using Social Proof To Build Trust

While a referral from a current client may schedule a meeting based on the trust imparted by their friend or family member, a cold lead lacks a first-degree connection. Fortunately, the SEC’s new marketing rule has enabled financial advisors to tap into one of the most powerful marketing tools around: social proof. It’s why half of consumers today trust online reviews as much as a recommendation from a friend. Reviews are proof that others have selected this firm.

More than 90% of searches start on Google which means whether advisors like it or not, Google is their new home page. Businesses with positive Google Reviews get significantly more clicks than others.

Video testimonials humanize the content the prospects saw before landing on the advisor’s website.

Andrew Johnson, Co-Founder & CEO, Testimonial iQ

Once a prospect gets to an advisor’s website, they generally aren’t evaluating them on fees, returns or brand name – they are evaluating them on their ability to build a relationship and communicate value. Social proof helps here as well. Video testimonials humanize the content they saw before landing on the website. Coupling testimonials with case studies provides social proof that the advisor serves similar clients and tangible examples of the problems they solve.

Prospects who have seen compelling social proof are much more likely to answer when they see their matched advisor calling. Building a compliance and marketing strategy to facilitate this takes upfront investment, but it’s ultimately much cheaper than spending on leads that don’t convert.

Andrew Johnson is the Co-Founder and CEO of Testimonial iQ.

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