Relationship marketing

By John J. Bowen Jr. | June 14, 2005 | Last updated on June 14, 2005
2 min read

(June 2005) Attracting new clients comes with plenty of options. There are so many, in fact, your real challenge will be to sort through the marketing techniques that don’t work and zero in on the most effective handful.

Consider the three major channels for marketing to prospects:

• Mass marketing, which relies on things like mailings to reach large numbers of prospects. This shotgun approach sends thousands of marketing messages in hopes one will hit its target.

• Credibility, which opens doors by building your reputation within your target market. Techniques for this channel include writing articles, making presentations, and appearing on radio or television.

• Relationship, which leverages your contacts with key clients and other professional advisors, such as accountants and lawyers, who already work with the people in your target market.

The mass marketing channel rarely attracts affluent clients. The credibility channel is useful for introducing yourself to a community of affluent investors. But a good reputation alone won’t bring in qualified prospects. To ensure a steady stream of pre-qualified referrals for prospects you can serve well — and profitably — you must turn to the relationship channel.

That channel is aligned with the way affluent people want to find their advisors: through referrals. The wealthy simply don’t choose an advisor based on advertisements that arrive in their mailboxes. They seek recommendations from people they trust.

Advisors who use the relationship channel understand a fundamental truth about the affluent: To successfully reach prospects, you must contact them in the ways they want to be contacted. Accordingly, these advisors focus their attention on key relationships that will lead to qualified referrals. Their efforts generally centre on two things: using systematic referral-request processes with existing clients, and forming strategic alliances with accountants and lawyers who serve the wealthy.

As the chart shows, client referrals are important to nearly three-quarters of Canadian advisors earning net incomes greater than $200,000. However, fewer than 60% of those earning less than $100,000 rely on client referrals to bring in prospects — a substantial difference.

The relationship channel can be time-consuming, because it requires you to methodically build contacts with future clients and their professional advisors. But it’s also the most effective way to draw in wealthy clients, so its rewards can be significant.

John J. Bowen Jr. is founder and CEO of CEG Worldwide, a U.S.-based global training, research and consulting firm. “The Bowen Report” appears monthly in Advisor’s Edge.


John J. Bowen Jr.