401K plans deserve a new look –
New sales strategies, technology, providers, and fee disclosures make 401K plans a great income opportunity for our members.
Increased income from clients – Many of our financial planning clients own businesses, are professionals or are senior executives at companies. Two key things these clients have in common, you have their attention and they all are prospects for 401K plans.
Greater loyalty from clients – If we don’t approach our clients about 401k plans, other advisors will. Once these advisors earn the trust of our clients with their plans, we shouldn’t be surprised when they try to take our clients’ business away from us.
Less competition from other advisors – The fact that, according to Cogent Research, less than half of advisors have more than one 401K plan, means there is less competition for us with 401K plans, than there is for our retail business.
Asset inflows during difficult markets – We all know that our new retail client business flow slows down dramatically during down markets. But our 401K accounts still have inflows because of the automated contributions the participants make.
Increased income from professional network – Many of us have put in a lot of time and effort to build and maintain our professional network, which generates referrals for our advisory businesses. It is easy to see the 401K referrals this network can give us.
Small 401K plans desperate for help – Fortunately for us, the smaller 401K plans – under $5mil to $10mil. – are largely ignored by the major 401K providers.
There is school of thought that the best fighters are not even in in the ring yet in the qualified plan advisory business. One thing we know for sure is we have room for more to serve the 600,000 + plans out there. All the training you need is right here. You have to do the roadwork though.
The platform vs. the eyeballs
This might be the most subtle yet important shift that marketers face as they deal with the reality of new media. Marketers aren’t renters, now they own.
For generations, marketers were trained to buy (actually rent) eyeballs.
A media company assembled a large amount of attention. A TV network or a magazine or even a billboard company found a place you can put an ad, and they sold you a shot at reaching their audience.
You, the marketer, don’t care about the long-term value of this audience. It’s like a rental car. You want it to be clean and shiny when you get it, you want to avoid getting in trouble when you return it, but hey, it’s a rental.
And so when we buy ads, we ask, “how big an audience” and then we design an ad with our brand in mind, not with the well-being of the media company or its audience in mind. And if we get a .1% or even a 1% response rate, we celebrate.
A trade show booth is an example of eyeball thinking. The trade show organizer assembles attendees and your job at the booth is to grab as many as you can.
Old media was not the same as old branding. Media companies built audiences and then brands rented those audiences.
Suddenly the new media comes along and the rules are different. You’re not renting an audience, you’re building one. You’re not exhibiting at a trade show, you’re starting your own trade show.
If you still ask, “how much traffic is there,” or “what’s the CPM?” you’re not getting it. Are you buying momentary attention or are you investing in a long term asset?
Now, when you buy something (that thing you used to call ‘media’), you’re not paying for eyeballs, you’re paying for a platform. A platform you can use to build your own audience, one that you can nurture, educate and ultimately convert. You’ll take care of this audience differently, measure them differently and have a different sales cycle. This isn’t natural, but it works.
Two steps: buy a platform and then fill it with people. Some examples:
Authors have traditionally relied on publishers to bring them readers. The author gives up the majority of the income and the publisher brings them the readers. But then you see someone like Frank at Post Secret who builds his own audience for his (sometimes nsfw) content. He owns a platform, it’s not something he rents. Now, using a publisher is a choice, not a necessity. Just about every successful author going forward (except for the lucky exceptions like Dan Brown) will own her own media channel. Not just authors, of course…
Consider the local real estate agent. She can spend to run ads every week in the local paper, or she can use the same money to start a legitimate media channel, a digital magazine, say, one that cheers on the school and gives the local paper a run for its money. And oh yes, the only houses listed for sale are hers. It might take a lot of work and even some money. But what does she get? A platform forever.
Traditionally, a clothing brand has to give up income and control to a retailer, since the retailer has the eyeballs. The web allows a brand like Little Miss Matched to build their own platform, their own audience and thus bypass all those gatekeepers. They invested in a product that told a story instead of investing in giving Walmart a cut. Boring products can’t do this.
Or consider the local chiropractor. He can spend money on a yellow pages ad or he can invest in a platform, creating a local running club and doing coaching for its members.
(Compare these examples with McDonald’s, a company that continues to rent eyeballs for a high price and has no real platform to speak of.)
Or consider the acquisition of Omniture by Adobe. What did Adobe pay for? I’d argue it was direct access to the right people at the leading advertisers and websites around the world. Technology isn’t so hard to copy. Permission to connect is almost impossible to achieve.
Compared to the cost of renting eyeballs, buying a platform is cheap. Filling it with people eager to hear from you… that’s the expensive part. But if you don’t invest in the platform, you’ll be at a disadvantage, now and forever. The smart way to build a brand today is to invest in the elements of the platform… the product, the technology, the websites (plural) and the systems you need to make it easy for people to show up at your very own trade show. And then embrace these people and shoot for 90% conversion, not .5%.
Like most good investments, it’s expensive and worth more than it costs.
ShoeFitts Marketing Creates Social Media Rollout Best Practices Guide for Financial Services Firms
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