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Financial Marketing Insights

Resources for financial marketers, independent wealth managers, and CMOs.

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KPIs and Pipeline Growth

On this week’s Marketing Wiz podcast, we discuss how lead value, KPIs, marketing activities, and metrics should work in tandem to support your firm's growth. This is an important topic, as it's easy to get overwhelmed by the sheer number of data points, metrics, and measurements available in the digital age. How can your firm cut through the noise to find a path forward?

The Value Of A Lead

On this podcast, we discuss the concept of pipeline value and lead value. In future posts we will dive into pipeline value in particular. For now, we wanted to focus on how your firm can value the leads you are generating.

Everyone wants more, better qualified leads in their inbox. For CMOs, partners, and stakeholders within a firm, ROI is just as important. Understanding the cost side of the marketing ROI equation is easy, but determining the return on your lead generation initiatives is where most firms run into trouble. The best way to begin looking at marketing ROI within your firm is by understanding the value of one, single lead.

Average Account Size x Average AUM Fee x Close Rate = Lead Value

Consider how this looks for a firm with an average account size of $1,000,000, who is charging an average AUM fee of 1.00%, and who closes 10% of the leads that they generate each year. Keep in mind that this close rate considers every lead that your firm generates over the course of a year. Your firm may close 50% of clients once an in-person meeting has occurred, but how many leads never make it to this in-person meeting because they are not qualified or non-responsive? We used a close rate of 10.0% to be conservative in our modeling.

Average Account Size x Average AUM Fee x Close Rate = Lead Value

$1,000,000 x 1.0% x 10.0% = $1,000

Does this look high? It's actually low, as this model only takes into account the revenue generated from the first year of the client relationship.

For the firms we are working with, it's common for the average client to stay with the firm for five, ten, or fifteen years once they move assets. Since this is a financial marketing podcast, we should probably show how this model looks when we account for the present value of future cash flows from an ongoing advisory relationship.

We will again assume that the firm's average account value is $1,000,000, AUM fees are 1.0%, and the close rate is 10.0%... but this time we consider the present value of 10-years-worth of advisory fees from the new relationship. The discount rate used in this example is 8.0%.

Present Value of Future Cash Flows x Close Rate = Lead Value

$67,100.81 x 10.0% = $6,710.08

So what does this number really represent to a growing financial firm? It shows the value, in today's dollars, of a single qualified lead generated by your firm. For many firms, this won't come as a surprise, and it's the value of these highly-qualified leads that probably brought you to this page.

In closing, keep in mind that throughout this blog post we've referenced "highly-qualified" leads. In financial marketing in particular, it's a game of quantity over quality, and this model highlights how locating just a handful of ideal prospects can be a game changer when it comes to your firm's growth outlook.



Craig Hall
Craig Hall
Craig Hall is founder and president of Marketing Wiz, a financial marketing firm specializing in the independent wealth management space.

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