Turn client data into marketing gold

Over the past decade, increased competition and regulatory change have had a profound effect on the way financial products and services are sold.

As a result, financial advisers have had to learn how to progress from product-driven marketing to customer-needs-driven strategies that focus on individual relationships.

An adviser can become truly market-driven only by becoming thoroughly attuned to clients’ needs. Information is a critical element if an adviser is to shift successfully to more focused, customer-needs- oriented marketing strategies.

Fortunately, advisers have access to a tremendous amount of information about their clients. Generally, the longer the relationship, the greater the probability that the client’s history will provide valuable insights into such issues as product preferences and the motivation for prior financial decisions.

Unfortunately, however, many advisers have yet to implement a systematic process to gather and analyze client data. If you are in this group and want to begin building an effective client information management system, here are some tips.

Collecting data. The key to effective customer-centric marketing is to be consistent about gathering data. Not only should you collect the same kind of information across your entire universe of clients, you should also systematically update and revise the data over time to track how age and circumstances affect financial preferences and purchase patterns.

First, profile your clients. Begin with a demographic profile that includes age, education, occupation, type/location of residence, marital status, and number and age of children. Then proceed to a lifestyle profile that explores investment preferences, spending patterns, leisure habits and expenditures, and future plans.

You will also want to include a detailed financial profile. Record whether clients have a detailed financial plan and how often they update it. Include an inventory of their investments and insurance coverage. Focus on their buying processes and learn, for example, in what order they purchased various financial products and services. Try to identify clients who could benefit from additional products and services. The result can be both effective client-centric marketing and a cross-selling opportunity that can help further cement a relationship.

Although the process can be tricky, combing through inactive accounts can provide valuable marketing insights. Mail or e-mail surveys, or ask an assistant to do a phone survey, to find out why certain people no longer do business with you and where they do business now — and why. To encourage responses, consider offering an incentive such as a free financial publication to those who complete the survey.

Analyzing data. The following observations provide just a few examples of how you can use client information to enhance the success of your marketing efforts.

Identify your best clients. The criteria you use should be specific to your practice and the kind of clients you serve. Some possible factors that you might consider using are assets under management, the length of their relationship with you, and the number or type of products and services that they buy or have bought from you. You should also consider whether the individual is a good source of referrals, and presents the potential for additional business from business associates or family members. After you have isolated your best clients, analyze the relevant data to identify common patterns and characteristics. Then use that intelligence to “clone” those best clients by focusing on prospects that exhibit similar needs, perspectives and behaviors.

You might also want to analyze your client information to determine which types of individuals most often purchase a given product or service. Then you have only to segment prospects to provide each individual with a product or service offering that addresses his or her specific circumstances and preferences.

Client information can be an important tool in your quest to develop effective, customer-driven marketing approaches. Careful analysis of the data can provide a clearer understanding of the needs and wants of your client base.

Remember, however, that your intuition and creative know-how are what ultimately turn client information into marketing intelligence.

Jay Nagdeman is president of Suasion Resources Inc. This column was adapted from his book, “The Professional’s Guide to Financial Services Marketing: Bite-Sized Insights for Creating Effective Approaches” (John Wiley & Sons Inc., 2009).

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