Advice Line: How To Build A Scalable Referral Marketing System (Eric LaNier)

Summary

Advisor Marketing Made Simple: Episode Summary

Episode: Advice Line: How To Build A Scalable Referral Marketing System (Eric LaNier)
Release Date: January 22, 2025
Hosts: Taylor Schulte and Kendra Wright
Guest: Eric LaNier of Higher Impact Financial

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Introduction

In this insightful episode of Advisor Marketing Made Simple, hosts Taylor Schulte and Kendra Wright welcome Eric LaNier, the sole proprietor of Higher Impact Financial based in Riverside, California. With a current revenue of $58,000 and an ambitious goal to reach $400,000 within five years, Eric seeks guidance on scaling his financial advisory practice, particularly focusing on building a scalable referral marketing system.

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Guest Background

Eric LaNier has been operating his firm solo for two years. His clientele primarily consists of Gen Z to Millennial individuals aged 25 to 40, including first-time advisors needing assistance with estate planning, insurance planning, and personalized financial strategies beyond basic financial steps like those advocated by influencers such as Dave Ramsey. Approximately 10-15% of his clients are small business owners or contract workers, with the majority being W2 employees.

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Key Challenges Discussed

1. Scaling the Business:

   • Challenge: Eric struggles with generating leads beyond his warm market—comprising church members, gym acquaintances, and former coworkers. He feels capped by this approach and is keen on exploring methods to attract and convert strangers into clients.
   • Eric's Perspective: "[...] I'm having trouble scaling. Like, I'm hitting a bit of a ceiling, it feels like." (00:55)

2. Outreach Strategies:

   • Current Methods: Eric has been employing LinkedIn prospecting—sending direct messages (DMs) to individuals who have changed jobs—and working part-time in his father's tax room to funnel clients.
   • Effectiveness: After five to six months, these strategies have shown limited success. Eric acknowledges feeling uncertain about their efficacy.
     • Quote: "I don't feel like it's working all that well." (05:31)

3. Service Capacity vs. Revenue Goals:

   • Objective: To achieve $400,000 in annual revenue, Eric would need approximately 200 clients at an average fee of $2,000 per year. This volume seems overwhelming and potentially unmanageable without a scalable system.
   • Taylor's Insight: Emphasizes the need to balance client numbers with service capacity to prevent operational chaos.
     • Quote: "If you continue the way you're operating, [...] you will get to this point." (07:30)

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Strategies and Insights Provided

1. Defining a Clear Niche:

   • Recommendation: Narrow down the target audience to ensure that marketing efforts are directed towards individuals who can afford and need the services offered. For example, targeting high-earning young professionals or specific professionals with identifiable pain points.
   • Quote: "How many clients do you want to have and what does that minimum need to look like?" (10:40)

2. Developing a Systematic Referral Marketing Process:

   • Process Over Ad-hoc Efforts: Instead of sporadic LinkedIn DMs, implement a structured approach such as hosting quarterly webinars tailored to specific client needs (e.g., "optimizing taxes for young professionals").
   • Predictability: Establish a repeatable and predictable referral system by defining clear processes and funnels.
   • Taylor's Example:
     • Quote: "I'm going to send a LinkedIn DM to high earning young professionals in Riverside who work for one of these five companies and invite them to my quarterly webinar series..." (16:06)

3. Leveraging Strengths in Relationship Building:

   • Eric's Strength: Possesses a natural ability to build trust quickly, which can be a significant competitive advantage in referral marketing.
   • Kendra's Advice: Utilize tools like Dex CRM to systematize relationship-building efforts and consider educational content that fosters deeper connections.

4. Investing in Business Planning:

   • Recommendation: Before intensifying marketing efforts, focus on refining business operations and defining clear business goals. Suggested resources include:
     • Books: The E Myth Revisited and works by Dan Sullivan.
     • Networks: Joining communities like XYPN for access to business coaches and peer support.
   • Quote: "What you don't want is to end up with some retirees over here and some young professionals over here and some business owners over here because their pain points are going to be all over the board." (27:28)

5. Choosing Authentic Marketing Channels:

   • Options Discussed: Referral marketing and podcasting stood out as authentic channels for Eric, given his strengths and interests.
   • Taylor's Perspective: Encourages focusing on one or two effective strategies rather than scattering efforts across multiple channels without a cohesive plan.
   • Quote: "Start to build out a referral marketing process that really works for me regardless of what channel I choose." (19:16)

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Notable Quotes with Timestamps

• Eric on Scaling Challenges:
  “I think that's my biggest question.” (00:55)

• Defining Scaling:
  “Scaling to me means that there's some process or system, some marketing system in place that is bringing in leads without me being 100% directly involved.” (01:43)

• On Current Outreach Efforts:
  “I might go months without getting a lead or referral from, from that group, and then all of a sudden I'll get several in a month.” (12:16)

• Taylor on Predictable Success:
  “You have to think more about what this process is going to look like.” (16:24)

• Kendra on Building Relationships:
  “Building relationships was my unfair advantage. He also asked me, what do you like to do?” (24:05)

• Taylor on Referral Marketing Effectiveness:
  “The data says that the average revenue per client from a COI referral, according to this research study, was $15,000 per client per referral.” (24:45)

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Conclusions and Action Steps

By the episode's end, Eric gains clarity on the importance of defining his target market, refining his service model, and developing a systematic referral marketing process. Hosts Taylor and Kendra stress the necessity of aligning marketing strategies with business operations to ensure sustainable growth.

Action Steps for Eric:

1. Refine Target Audience: Narrow down the ideal client profile based on income, needs, and geographic location.
2. Develop a Systematic Referral Process: Utilize tools like Dex CRM and invest time in learning proven referral strategies through books and networking.
3. Focus on Business Operations: Strengthen the foundational aspects of the business to handle increased client volume without compromising service quality.
4. Choose Authentic Marketing Channels: Dedicate efforts to referral marketing and consider podcasting as a long-term strategy aligned with personal strengths and interests.
5. Seek Community and Support: Join networks such as XYPN to gain access to business coaches and peer support systems.

Final Encouragement from Hosts:

Taylor and Kendra commend Eric for his vulnerability and proactive approach in seeking mentorship, assuring him that with intentionality and structured efforts, he is well on his way to achieving his ambitious growth goals.

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Resources Mentioned

• Books:

  • The E Myth Revisited
  • Works by Dan Sullivan

• Tools:

  • Dex CRM

• Networks:

  • XYPN (e.g., Xy. Napa)

• Additional Episodes:

  • Referral Marketing
  • Marketing Funnel

For listeners seeking to enhance their financial advisory marketing strategies, this episode provides valuable insights into building a scalable and effective referral marketing system, underscored by the importance of strategic business planning and authentic relationship-building.

Transcript

[Kendra]

Hey, it's Kendra and Taylor, and we're here to make advisor marketing simple. Today's guest is Eric from Higher Impact Financial. He's been running his firm solo for two years. His current revenue is $58,000, and he's aiming to grow to $400,000 in the next five years. Let's explore what's working and what could be improved. Welcome to the show. We have a conversation today with our friend Eric. If you could just kick us off here and share your name, your firm, and your location, that'd be great.

[Taylor]

Yeah.

[Eric]

So my name is Eric Lanier. My firm is called Higher Impact Financial. I'm located in Riverside, California, which is about 45 minutes east of Disneyland, if you know where that is.

[Kendra]

Awesome. Now, could you share the big question that you'd love to have Taylor and I help you break down today with your marketing?

[Eric]

Yeah, I think my big question is, so in my time being in the industry, I've. I've been pretty good at generating business from my. I guess you call it your warm market. So, like my church gym, old co workers, things like that, where I have struggled and still feel like I'm scratching my head is outreach or marketing to people I don't know. So whether you want to call it cold outreach, prospecting, digital market, whatever you want to call it, that I feel like that's been my biggest struggle. Point is just finding something that can generate leads from people I don't know. Which I think because of that challenge, I'm having trouble scaling. Like, I'm hitting a bit of a ceiling, it feels like. So that's. Yeah, that's my biggest question.

[Kendra]

And when you say trouble scaling, what does scaling mean to you?

[Eric]

Yeah, I would say scaling to me means that there's some process or system, some marketing system in place that is bringing in leads without me being 100% directly involved. Like, I'm not having to be the one sending every LinkedIn message or doing a call to a CPA or something like that. Like something that is. Is working while I'm not working directly on it, if that makes sense.

[Kendra]

That's a really good distinction. Thank you for that extra detail. I want to ask you a question about the kind of people that you love to serve. You said your community. Community is already sending you, you know, referrals. What kind of people are they typically sending you?

[Eric]

Yeah, I would say a big portion of my clients are. They're. I'd say they're age 25 to 40. So it's sort of a Gen Z Millennial crowd. They're folks who have never hired an advisor before, and they need help with estate planning, they need help with insurance planning, and then they need help with just like, they've done kind of the basics. Like, maybe they've. They've followed like, the Dave Ramsey baby steps, and now they're at a point like, hey, we've done sort of this stuff, and now we're making more money and we're. We're paying more in taxes and that, that hurts. What do we do? Or, hey, like, we just. We bought our first home, we inherited something, and now finances are beyond our. Just our normal ability to just, hey, I'm gonna go, like, see what, again, what this financial influencer says to do. We need some more personalized help. So that. That's predominantly who I help. I mean, of course there's others, and I have clients of all ages, but, yeah, that's the majority.

[Kendra]

You said something on the information you sent into us about your ideal client, which is you prefer to work with small business owners, contract workers, but you also work with W2 folks. You know, of the current clients you have or that you're working with. What percentage of them are small business owners?

[Eric]

Yeah, that's a good question. I'd say it's still relatively small. Like, it might be like 10%, 15% of my clients are that.

[Kendra]

Okay, awesome. And then if you get 10 referrals, let's just say right now, you know, this last year, 10 people were sent over to you. What percentage of those, you know, warm community referrals would actually be qualified to work with you?

[Eric]

Yes, I'd say. I mean, because I'm still at a stage where I'm really trying to grow, like, I'm willing to take on most. Most anybody. I'd say, like, it's eight out of 10, though there. There's probably a few people that, that really do just need to, like, hey, you just need to start saving, or like, you just need to start tackling debt. So I'd say 7 to 8 out of 10, I can help in some capacity.

[Kendra]

And as far as the marketing activities that you're currently doing, what are you currently doing to build awareness for the firm and bring, you know, attention to the firm?

[Eric]

Yeah. So I'd say the. The biggest thing I'm doing right now is just. And I know some listeners might be like, think this is dumb or might get some flack for this, but I've been doing some LinkedIn prospecting, so just sending DMS to folks who have changed jobs Again, I know it might be an unpopular thing to say, but that's what I'm doing. I'm trying to grow. Another thing that I'm doing is I also work part time in my dad's tax room. He's been an accountant for like, gosh, like 45 years. So I work part time, help, kind of helping him. We have some long term plans of what that could look like. But that's another kind of marketing funnel I have is if some of those tax clients need some help, then I'm, I'm there. I'm still figuring out how to do that. Well, but that's another avenue.

[Taylor]

Yeah.

[Kendra]

And of the, you know, the people you reach again onto LinkedIn, the connection that you have with your dad through his accounting business, how's that working? Is that generating any kind of interested, you know, leads for you?

[Eric]

Yeah, I think that's a big part of why I reached out to reach out to you guys, because I don't, I don't feel like it's working all that well.

[Kendra]

Let me stop you right there. How long have you been doing it for?

[Eric]

Good question. Probably the LinkedIn stuff, about five to six months. Okay. Worked out about this will be the third tax season coming up.

[Kendra]

Okay, cool. And then do you like to, you know, when it comes to a medium of, you know, marketing, do you like to write? Do you like video, do you like speaking? Like, what feels authentic to you?

[Eric]

I would say speaking and writing. Definitely more than video. Maybe if I had to pick between one, I'd say speaking.

[Kendra]

Okay, awesome. And then one more question. I'm gonna bounce this over to you, Taylor. How quickly do you need to grow the business?

[Eric]

I would say yeah, right now, like, I want to, like 2025, I want to be a real big year. And this year I saw some pretty significant growth the last two quarters. 2025, I'd like it to be okay. We're, we're operating like we're getting somewhere. Yeah. I want to grow quickly.

[Kendra]

Cool. What's coming up for you, Taylor?

[Taylor]

The last, let's say five clients you've taken on, what has their average annual fee been?

[Eric]

Good question. I would. They. It's been just ballpark. Yeah. Around 2,000 a year.

[Taylor]

Okay. Okay. So what I loved is when you signed up for this, this call, you shared your current revenue and then you shared your five year revenue, which is a question that we ask everybody. And you said that in five years you would like $400,000 of annual recurring revenue and $50 million in asset center management. So at $2,000 per client on average, that would mean you would have 200 total clients in order to achieve that goal. How does managing 200 clients feel to you?

[Eric]

Yeah, it sounds. That sounds like a bit much, especially if it's like planning centric aum, I think is, I think, more doable. But yeah. Or especially if it was like 200 clients a year of doing a financial plan for that. That doesn't sound realistic when you say it like that.

[Taylor]

Yeah, I'm starting at the. The very, very, you know, end here. I'm going all the way to, like, the future you in five years and ensuring that the roadmap that we put together to get there, you know, is, you know, that we get to where we want to go, and all of a sudden we don't wake up with this messy, chaotic practice. This is not a practice management podcast. We're here to talk about marketing and help you work through some of these marketing challenges. But it does overlap and relate to some practice management and operations because we could wake up one day again and have this kind of messy, chaotic practice. And I'm slightly fearful of that for you. When I heard you say, I'll just kind of take on anybody, and I understand the urgency to grow and that you need income coming in, but you will get to this point. I don't know exactly when, but you will get to this point. If you continue the way you're operating, where you will wake up in a year, two years, three years, and all of a sudden you have so many people you're trying to manage while also trying to grow your practice at the same time. It's going to become impossible. And now you're going to have to spend the next year or two unwinding things and fixing things before you can move forward again. And I say this because I live that journey myself. And so I love talking to advisors who are just starting out because you get to be really, really intentional about how you grow to ensure that you don't get caught in that situation. I didn't have marketing podcasts like this. I didn't have mentors telling me to be careful and that this is what it could turn into. All of a sudden, I just woke up one day and it was a mess, and I had to go backwards and figure things out. So I think it is appropriate because you are really clear with where you want to be in five years. You've identified that you definitely want to grow, but start to think a little bit more about, okay, if that's my revenue Goal, my annual revenue goal. How many clients do I really want? If it's 200, great. I don't, I don't know. That might be a little too much for you to handle, but maybe it's closer to 80 or 70, you know, and so from there you can say, well, you know, if I want $400,000 in revenue, but I only want, you know, 75 clients, that's an average of about $5,000 per year per client. Now I have to back into, okay, well, what type of person has, you know, five, six thousand dollars, let's call it $500 per month to spend on financial planning? They probably need a certain level of income and, you know, some significant pain points to justify spending $500 per month, you know, on financial planning services. Then that leaves you to, well, I can't maybe cast this wide of a net. I can't just take on anyone and everyone, because not everyone can pay $500 per month. So that helps us get a little bit more narrow with who you might start to target. Because I, I do recognize this challenge of, like, I need to grow. I'm taking on anyone and everyone. I don't have a really clear niche here. Um, but that starts to get you a little bit closer to, okay, if I'm gonna need that average fee of 5 to $6,000 per year, that's gonna, you know, force me to narrow down and who I'm talking to or who I'm asking for referrals from. Does that, does that resonate?

[Eric]

Yeah, a lot. Especially the part about, like, unwinding things in two years. And I think I've even gotten a tiny taste of that. The, like I mentioned, like, the last two quarters have been pretty strong growth, but it ha. I have at times felt like, oh, my gosh, this is a lot for, like this, no offense to this, like, smaller climate. It's kind of a lot. Especially when they're planning centric and not aum, which I think AUM is a little bit more scalable, to use that word again. But yeah, no, I, I, you painted a good picture of that, Taylor.

[Taylor]

Okay, good. Yeah, I think it's something for you to, to think about and think about your service model as well. It sounds like you're trying to maybe separate planning fees from investment management fees. And if that's the case, you got to think more about pricing. If you're just going to offer an investment management only service, you know, you may not be able to price it percent. You might be pricing it closer to 25 basis points or 30 basis points. So again, now, how many clients do I need to pay me 30 basis points for investment management only to reach my growth goals? So there's definitely just some, some service model kind of pricing things. I think for you to put your head down and really start to work through in order to build the practice that you want to grow. So I can kind of pivot and talk more about marketing here, just with that kind of, you know, baseline understanding of maybe some of the problems that you could run into if you don't start to buckle down and get clear with these things. I'm curious, what has you wanting to move away from your quote unquote warm market and into, you know, more cold marketing? You mentioned attracting strangers. Like, why do you want to go and find strangers if you're, you know, starting to get some traction with your warm market? What, what's leading you in that direction?

[Eric]

Yeah, that's a great question. I think what it is, is the more market is it's not a like, consistent lead source. Like, so I might go months without getting a lead or referral from, from that group, and then all of a sudden I'll get several in a month. I think why I'm wanting to attract strangers is because I think I, I guess I don't know any other way to grow, but I guess I, I feel like, well, if, if I am going to grow and build and build my firm, which I, I would love to have a team someday, like got a big vision for it, then how else would I grow if I, if I didn't do more of a cold outreach or even if it was content marketing? I guess it's just. I don't know any other way.

[Taylor]

Okay, fair enough. We put out an episode today on, on referral marketing. I'd highly recommend listening to it because we talk about what's required to have success with referral marketing and how referral marketing, you know, your warm market is really not all that different than any other marketing strategy. You know, in order to have predictable success with any of these activities, it does require having, you know, a nice process and funnel in place. So, for example, going Back to your LinkedIn comment, I think it's great. I think you're onto something there with these LinkedIn DMs, but just sending LinkedIn DMs, maybe when you have some free time, whenever you feel like it or whenever you remember to do it, and just sending some random LinkedIn DMs, hoping that this person responds and schedules an intro call, not A very, you know, dialed in process is probably, probably not going to produce predictable long term results. A better example might be I'm going to send a LinkedIn DM to high earning young professionals in Riverside who work for one of these five companies and I'm going to invite them to my quarterly webinar series that I host on how to optimize, you know, taxes as a young professional or how to optimize your employee benefits. Now, I'm not asking them to schedule, I'm not asking this total stranger to schedule a call. I'm reaching out very, you know, intentionally to a direct group of people who I know, you know, likely have the ability to pay my minimum annual fee. And I'm inviting them to this free, really awesome educational webinar where I can further show my expertise and build trust with these people. And then, you know, at the end I might invite them to schedule a phone call. And it's the same thing with referrals. If we're just going to sit around and wait for referrals to show up, yeah, it's not going to produce very predictable, you know, success here. Sometimes they show up and sometimes they don't. And that's not very good for business. When we're trying to, you know, build a long term sustainable business. If we don't know when these things are going to happen, what we want to get to is, you know, if I know, if I do, you know, these five things every single week that I'm going to get X number of referrals from my network and you know, this percentage of those referrals are going to turn into clients. It should be that repeatable and that predictable. So when we go back to your warm market, it's possible it's tapped out. It's possible that just you don't have that big of a network with the types of people that you're trying to target. And maybe it truly is just not the best avenue for you. That's up to you to decide. But if it is something that you want to really give a fair shot, then I think you have to think more about what, what is this process going to look like? Who are my, you know, referral partners, how do I train those referral partners to send me the right types of referrals? How do I communicate that refer process, you know, what happens when I get a referral? What sort of process do I take that person through all these sort of questions that you can start to answer to put this process together. So all I'm highlighting Here is that to me, podcasting, YouTube, blogging, public speaking, webinars, LinkedIn referrals, they're all really the same. Like, they're all, they all work. It just requires a more thoughtful, intentional process that needs to be put together in order for that success to start to happen. Does that, does that make sense?

[Eric]

Yeah, I honestly had never, I had never thought of it like that. Like, I really hadn't. I think I just thought like, you got to pick one and become. Yeah, I don't, honestly, I don't even know what I fully thought. But no, no, you described was, was really helpful, Taylor.

[Taylor]

So with that in mind, knowing that like, hey, referral marketing could certainly work, my LinkedIn strategy that I'm starting to experiment with, like, that could work. Podcasting sounds interesting. That could work. Knowing this now, what, like, what are you drawn towards what feels like an authentic marketing path for you? Is it like, you know, what I actually do, like, referral marketing. I like, you know, all my friends at the gym and I do think that they could be helpful in helping me refer, you know, refer the right types of people to me if I just put this process together and, and really communicate this referral process a little bit better and have a process for asking for those referrals. You know, is it that or is it, I like this LinkedIn thing, I really want to lean more into that and I want to develop a process around that or maybe it's something else. So knowing that all these things can work, but they're going to require some more time and attention, what are you kind of gravitating towards?

[Eric]

Yeah, I'd say, I think two things. I think I've always been drawn to referral marketing, but I started off in the broker dealer world and so I was taught the kind of real intense way to do referral marketing. Um, it was more like referral pro, demanding prior prospecting. Um, and then I'd say like, podcasting has always been a big, like a draw to me because I'm, I'm pretty. My wife and I are, are very active in our church and we're, we're pretty servant hearted people. And so I think the idea of having a podcast that's helpful to people is, is a big draw to me.

[Taylor]

Awesome. I think that's something to, to pay attention to. You know, starting a podcast and having success with a podcast is, you know, no small feat. It will take a lot of time and energy, commitment, resources probably have to make an investment there. But if it is something that you're drawn to and you think it fits into your marketing funnel. It's certainly something to lean into. You might just not be able to really pursue referral marketing while also trying to, you know, launch this, this podcast. But I would definitely pay attention to what is it that I really like to do that feels authentic to me that I can really just obsess over and get really good at. And if it is podcasting, great. If you're not really sure, you could certainly experiment with it for a short period of time and give yourself that grace to do that. But I would start to think about what is that thing going to be? And then start to develop that funnel around that thing.

[Eric]

Okay. Yeah, like I said, the referral piece, I think is a draw to me is because I mean, something I've been told by others that I'm able to build trust quickly, but I think within that, like, I don't. I still have no idea. I got to listen to the podcast episode. Apparently, I have no idea how to do referral marketing. Well, like, my training is just on, like, well, you just. You just ask. There's gotta be a better way than that.

[Taylor]

Yep. And this is where it's like, okay, I like referral marketing. I know I'm good at building trust with people in a short period of time. I like that. I'm, you know, I'm drawn to that. Now it just becomes, let's obsess over referral marketing.

[Eric]

Right.

[Taylor]

I'm going to listen to every podcast out there, whether it's in our industry or outside our industry, on referral marketing. I'm going to read books on referral marketing. I might hire Dan Allison, the referral marketing expert. Like, just everything I can learn about referral marketing, because that's the avenue that I'm going to choose. But if it's just, like, I just sit around and wait for referrals, and hopefully they come in, you know, maybe they don't. Again, not a very predictable, you know, marketing activity. And if we're going to just hope referrals come in and then also maybe try to start a podcast and maybe send some LinkedIn DMs over there. Again, we just kind of have this, like, scattered marketing strategy that's not going to produce predictable results, what's going to happen is you're going to get a little win over here from a LinkedIn DM that you sent one day. And like, ooh, that worked. I don't want to stop doing that because I got that one prospect from that thing over there. And then I got a referral over here one time, and I don't want to stop that because I got that one referral there, and all of a sudden you're just, like, hoping that these things continue to work, but there's no real predictable success there. So if it is referral marketing, like you said, I'm sure there's a better way to do it. There is absolutely a better way to do it, but it's just on you to go learn or hire the right people to help you put that together.

[Eric]

Yeah, and you just described, like, my experience in my. In the industry. Honestly, Taylor, like, that's kind of. You're just taught to keep doing stuff and just do. Do more, and eventually it works. And eventually you'll get people that just come to you and then you build a practice. And that's like you said, that does not lead to predictable success. And that's like, that's the pain I'm feeling right now.

[Kendra]

Well, the good thing is that you found this conversation early, because I think a lot of advis listening have done this path, They've traveled this path. They haven't stopped to think, how many clients do we want to have and what does that minimum need to look like? Who do I want to serve and who could pay that now? Where do I feel drawn to grow, you know, the awareness for my firm and, you know, something that's kind of unique is you said you want something scalable, and I can tell you that content marketing, this feels so freaking unscalable. If you like referral marketing, a couple things. One, we often think what comes natural to us is not awesome. It's awesome to others, but ordinary to us. So if you said, like, hey, I already realized, like, I have this ability to build relationships, I think that's a competitive advantage that you should use. There's another episode we did with an advisor really similar to you, Paul. We did an episode called Referrals vs Digital Marketing. He was kind of in a similar scenario. And, you know, the conversation we have with Paul is, hey, we can build your marketing any way you like, but we are going to build a road that you're going to be on for a while. So how do we build it in a way that feels authentic to you? Because even when it's authentic, it's still going to be challenging. Right. You know, you're going to have to find that repeatable process to build out referral marketing for you. So knowing that you're good at relationships, and if that sounds interesting to you and you want to grow quickly. Content marketing is a very long game. It can't. You know, Taylor's built an amazing podcast, but, you know, something like that definitely has a Runway. So it sounds like, you know, maybe that referral path could be a good next step for you because you're already winning there and you enjoy that marketing channel.

[Eric]

Yeah, yeah, I. I would agree. I think it's a. Sounds like it's a mindset shift a little bit too, of, like, shifting from just. Oh, yeah. I'm just going to hope that they come in and that people from, you know, little league baseball or whatever that, you know, find out I'm a financial advisor and they're going to call me. I. I think there's a much. I'm seeing there's a much better way to do this.

[Kendra]

Yeah. And I feel like, you know, for me, when I started looking at more proactive, consistent marketing, I essentially went coi route, and I kind of reframed it as, how do I educate people on the way I help advisors? It wasn't really like, how do I, you know, get people to refer me business? It was like, how do I create amazing friendships and relationships and start to get intentional, to slowly start building that relationship? I literally made a list of 20 people in our industry that I wanted to build a better relationship with because I knew they could send me qualified clients. And it started very slowly for me, but I had a checklist for myself. I had to do five, like, marketing outreaches per week. And it made me want to barf. Like, I was just like, oh, God, I'm so scared to do this. You know, and it could be something as simple as, like, for me, you know, most of mine was digital. I actually went and found those 20 people on social, and I would leave thoughtful comments or I'd see, hey, they're struggling with this. And I'm like, hey, I read this really amazing article on this thing you said over here, and it was slow. And that's also why I asked, how long have you been doing this? Because when I was working with my business coach, we. We decided that building relationships was my unfair advantage. He also asked me, what do you like to do?

[Taylor]

What.

[Kendra]

What can you do better than anybody else? And I was like, oh, that's easy. Like, I love building relationships, and I'm so good at it because I actually care about it. And it sounds so obvious, but, like, that's actually not a skill everyone has. Eric, there are plenty of advisors who do not want to build their relationship. You know, referral marketing system. So it is still a really viable path. And I think in Taylor, maybe you can back this up with some data. Like it can be a much more effective, faster process, very profitable in a shorter time span if you really turn it into a marketing funnel and a process and you're intentional and make it more predictable, not just shooting from the hip and hoping someone prefers.

[Taylor]

Yeah, we, we share some of the data from the, the new Kitsis marketing research on referral marketing. It is the most effective and the most efficient marketing strategy. It doesn't mean that, like that's what you have to choose and just own that. I highlight in the episode that I chose the activities that are at the very bottom of that list. So they're the least effective and least efficient by, you know, by what the research says. So those things have worked for me. Even though they're at the bottom of the list. Don't get stuck on that. But if you want to see some of the data that supports why referrals are so effective and so efficient, again, check out that episode and there's some, some resources to learn more. But this all does come back to. So I'll share a little bit of the data. So the data says that the average revenue per client from a COI referral, according to this research study, was $15,000 per client per referral. So that's what we mean by saying it's the most effective because it produces, on average, higher revenue producing clients. Now this goes back to maybe you're not targeting higher net worth clients. Maybe you're not targeting people that have the ability to pay $15,000 plus per year. It depends on your target market, depends on your area, depends on your circle, your network of people, your expertise, who you, who you enjoy helping. So if you are going all in on COI referrals and you don't really have a system and a process for supporting high net worth people that are paying 15, $20,000 per year. Again, probably not gonna have very much success. So I do think one of your starting points after today's conversation is what do I want my business to look like? Right. You mentioned $400,000 in revenue in, in five years. Love it. It's crystal clear. How many clients is that? Right? And then divide that. What's the average fee per client, what type of person, you know, what sort of income is needed or net worth is needed to pay that sort of, you know, fee. And then I'd probably get a little bit more clear. Are we targeting people in Riverside County? Are we expanding that Net out to Southern California. Are we going national and being really specific about a certain type of professional with certain type of pain points, I would get a little bit more clear. I know it's hard in the early years, but what you don't want, Eric, is to end up with some retirees over here and some young professionals over here and some business owners over here because their pain points are going to be all over the board. You're just not going to be able to service all these people appropriately while continuing to grow your firm. So you don't have to get super, super, super tight with your niche. But we do have to get a little bit more narrow to avoid running into that challenge and also, you know, to avoid, you know, not having success with our marketing. So just challenging to get a little bit more narrow and start to think more about, like, business kind of planning exercise to determine what are we trying to build here first before we start investing more time and money in marketing.

[Eric]

Yeah, and I'm more. I'd say I'm already. My firm already kind of looks like that on a, maybe a smaller scale. But yeah, I mean, that's a good point, Taylor. Like, I, I do have, and I feel that, like, struggle sometimes. Like, okay, wait, so this person's dealing with this. Okay, I gotta like, put on that. The retirement plan of Cat and I gotta go put on the, the student loan debt management hat. And it's a lot.

[Taylor]

Yeah, we wouldn't be able to do it if someone has student loan debt issues. Like, we're just not, we're not equipped to handle that situation. We would refer that out in a heartbeat. So it is really challenging and it's just going to get even more challenging. And then you're going to get to this point, Eric, where you have to fire two thirds of your clients and that's not going to feel good. So I think these are really important things to work through right now. And if you're struggling and how to work through them, there's some great business coaches out there that you can lean on. There's some great books out there that you can lean on. So, you know, maybe there's a decision to make here. Where do I want to spend some time and money and resources here in the near term on, you know, learning more about business ownership and refining my business goals before I start to stitch together a marketing plan. Or do I just want to go full bore into marketing and ignore the business stuff?

[Eric]

Right. What if I could ask a question? What book would you recommend on the business planning Side.

[Taylor]

Yeah. The initial one that comes to mind is the. The E Myth. E Myth revisited. I think it's table stakes. Have you read it?

[Eric]

I started it. Haven't finished it.

[Taylor]

Okay. Yeah, I think it's. It's table stakes for business owners, especially new business owners. So I think that would be a good one to start with. Dan Sullivan has some great books. I'm not sure if they're extremely fitting for where you're at, but Dan Sullivan has written a few business books that are fantastic. So this would be good starting points. Are you part of a network? Xy, Napa, anything like that?

[Eric]

No.

[Taylor]

No. Okay. You know, some of those networks like X, Y, P, N, they give you access to great business coaches and other people and your same situation. I think, you know, community becomes really important and growing alongside people who are in the exact same place as you. Same struggles, same pain points and working through these things together. I know XYPN is not a cheap investment, but it's probably a better investment to go spend. I don't know what it is, 6, $7,000 per year for X, Y PN to get access to these resources and community and people who can help you through these problems. Probably a better investment than spending 6 or $7,000 on, you know, a website rebuild or, you know, SEO or starting a podcast is probably a better use of funds at this stage.

[Eric]

Okay, that's good to know.

[Kendra]

What's really interesting, too, about that, Eric, is if you can start to kind of dial in some of these core business items and core business planning pieces, like, how many clients do you want to have? You know, what does their income need to look like so that they could, you know, pay that fee per year? Getting more narrow on your avatar and kind of looking at that service model pricing, Then when we go to look at building out that referral marketing channel or Even something like LinkedIn, any of the marketing kind of channels that we could, you know, consider here is going to have a downstream impact. And the clearer you get now on these core pieces, particularly around who you want to serve and do they have the money to pay you at a rate that will make sense so you can build your practice in a consistent, you know, intentional way, it's going to impact everything downstream of marketing. So sometimes it can feel like you're taking a couple steps back, but you're actually slowing down to speed up the marketing process. So these things all impact marketing so heavily downstream. If you listen to the podcast, you'll see that you're actually in the perfect place to Take a moment and take a breath and consider these things, because a lot of advisors we talk to are further down the path, and that yarn ball is wound so much tighter, and we are stepping them backwards. We're pulling them back to exactly where you're at and saying, wait a second, who do you love to serve? What kind of marketing, you know, medium do you like? Do you, you know, do you like building relationships? You like to write? Do you like to speak so you're not behind? You're just taking a moment to build this right, so it will impact marketing. I know that your, you know, kind of primary question here is, how do I build a scalable marketing practice? And I think a better question to ask first is, how do I build a practice I will be excited about that will scale over time and give me the mental bandwidth to actually build a marketing funnel that really works for me regardless of what channel I choose?

[Taylor]

Okay.

[Eric]

Yeah, I, I hadn't thought of it like that at all.

[Taylor]

Eric, I just want to take a moment to, to acknowledge. I mean, you've built a great business in a short period of time. You know, you know, when you submitted for this, about $60,000 in annual revenue. It's fantastic. I mean, you, you built a, you know, $60,000 or maybe even more since you submitted. You've built a great business in a short period of time. On top of that, I got to give you credit for coming on here and being vulnerable and having this conversation. I know you mentioned before we started recording, like, a little bit nervous. Is this going to be relatable? You know, are, you know, you mentioned the LinkedIn strategy, and you're going to catch flack for, like, you're like, I love that you're here asking these questions and being vulnerable. You've built a great business. You've got really clear goals. You know, you want to build something big. You're doing all the right things. So do not beat yourself up. Just know, like, business ownership is really hard. You're going to, you know, hit these different hurdles, these, these growth barriers, these challenges, and they are really important. And I know, again, this is not a practice management operations podcast, but, you know, it does blend together and overlap with your marketing. And marketing can get you in a lot of trouble if you don't have the business operations, you know, in. In place and have a clear strategy and plan. So anyways, I just wanted to acknowledge, like, I, I love that you came on here. I love that you've been vulnerable and sharing and asking really good questions and have no doubt that you're gonna have success. Before we wrap up here, any other questions on your end? Anything that we didn't get to that you hope we would have?

[Kendra]

No.

[Eric]

I just want to say really appreciate Taylor, you and Kendra just making time for me. I'd say, I think I didn't go into the this conversation with this question, but because we talked about referral marketing, obviously I'm gonna go study a bunch of stuff. But what would you two say for referral marketing? How could I start working on that today?

[Kendra]

So there's actually a tool that I love called Dex CRM. And when I started getting really intentional about building my, you know, kind of COI process, I used that, and it is phenomenal to support you in building a systematic approach and how you think about connecting with people. So I think that's a really good kind of tool. I also second what Taylor said around. You know, go to Amazon and I would buy the top 10 books, maybe the top five books on referral marketing, maybe by one or two in our industry and one or two outside of our industry. And I would read them front to back and I would make extensive notes and I would be looking for what resonates with me. And I'd also be starting to look at what are you already doing unintentionally that you could be intentional about. So you said, like, hey, I'm already getting referrals from my community. Is there a way to connect with or reach more people in your community? You know, is there a way to kind of check in with other people in your community and just, you know, build those relationships and in an organic way, you know, explain what you do in the transformation you create when it makes sense. You know, just getting more methodical about building out that process. Because I think for something like referral marketing, we would really craft that in a way that you see it as like something you're excited to do and leveraging that skill you have with people. And definitely not in a way that feels icky. So it's gotta be built for you in the way that feels authentic to you.

[Eric]

Okay. I would.

[Taylor]

I would add and emphasize that before you go and maybe adopt tools and even start to read different books or learn from. From experts. I'm gonna sound like a broken record here, but I still think we need to go back and figure out who the heck we're targeting first. And it doesn't need to be, yeah, extremely narrow, but it should be at least something along the lines of high earning, young professionals, married, kids. I don't know if they own a business or their W2. I would choose one of those again. Are they in Riverside County? Are they in Southern California? Do they work for one of these five companies? Just start to put together some of these criteria, and then from there I would maybe identify, I don't know, five people in your network that more or less meet that criteria. Could be friends from church, friends from the gym. You're going to ask these people to go to coffee, go to lunch. You're not asking for business. You're just like, hey, I'm working on my business. You know, we are. You know, we do our best work with people just like you. And I just want to ask you some questions to learn more about some of the challenges and pain points that you're up against. Just go to coffee and with a blank piece of paper and ask questions and get curious and just learn from these people and you'll start to uncover how they share their challenges, how they share their pain points, what's important to them in their life. So that'll give you a lot of information as to how you might start to stitch together this referral marketing process. So learning from those people in your network, again, we're not expecting them to become clients or asking them for referrals or is learning from them then, I think from there then, now you have the, you know, kind of permission to go and learn more about what are the tactics to start to kind of finalize this. This referral marketing strategy could be books, it could be courses, it could be going through a program like Dan Sullivan's. I know there's a lot of others out there. You know, go to your podcast app and type in advisor marketing referrals. I don't know. I'm sure Kitsis has podcasts on it. I'm sure, you know, XYPN and the Altros podcast. I'm sure you could just go to town now. We can go too far down that path too, right? And now we're just stuck listening to podcasts all day long and watching YouTube videos, and we're not really taking action. So, you know, put some guardrails around that to say, okay, for the next month. You know, December is a great month to just like, learn and spend time on the business. Next month, I'm going to give my permission myself permission to go and do that stuff. After that, I got to start to take action. So that'd be. That'd be my suggestion. I know it's probably a lot, but, you know, you've got some Time to kind of digest all this and determine what sort of path you want to take.

[Kendra]

Eric, I know we've thrown a lot at you. You know, now that we've had this conversation, is there, you know, going away from this conversation, what was most helpful for you or what might you change going forward as you start to look at what's the next best step for you and your marketing?

[Taylor]

Yeah.

[Eric]

I think two things stand out. The, the practice management side that Taylor talked about that's I need to go do some work on. And then something you said, Kendra, which I. I guess I had a wrong assumption about. Like folks in our interject. I. I think I have assumed that most advice. Most financial advisors are highly extroverted people. People really good at sales, like, all about building relationships. And I think I have old my. I don't know if I'd say I've held my. I'm myself when I meet with my clients, but I have not viewed that as like a unfair, competitive at all because I think I just assume like, well, most advisors are like me. So I think that's something I need to think about a lot and figure out how can I use that to my advantage?

[Kendra]

Definitely. I love it. And if you were to, you know, use that unfair advantage, that competitive advantage you have of really enjoying truly building relationships in your community, the gift that that gives you is it gives you a pass to ignore the other marketing channels. It's so easy, at least for now, at least till you kind of start to build, you know, these pieces of the practice management elements and then really start to look at the referral marketing, you know, kind of process and strategy. A couple good episodes. I think they'll be really good for you. One, the one that just came out today about, you know, referral marketing. Another one is the marketing funnel. We talk about that so you can start to think about that. But just like Taylor said, I think the first place for you is what kind of practice are we building toward? And then we're going to gear your marketing to lead you to a great, manageable, you know, not wildly chaotic practice. One that is built with intention and profit and marketing can support that and you're not behind. You've built an amazing business very quickly. And the fact that you came on here open and ready to, you know, be coached this early in the business, honestly, it's such a compliment to how I think your marketing will improve and your business will improve over time. So we're really excited that you came here and had a conversation with us today.

[Eric]

Well, thanks for having me guys.

[Kendra]

Awesome. And for the rest of you listening, make sure you check out a couple of those episodes in the backlog. Thanks for tuning in with us and we'll see you next week. We hope you enjoyed today's episode. To get the resources shared or sign up to join us as a guest on one of our advice lines episodes, check out the links in the show notes. Thanks for listening and we'll see you next week.