As the number of financial advisors in the U.S. has continued to rise (at over 300,000 presently in the United States), it can be hard for advisors to decide what exactly is the best way to attract new clients. And once advisors have attracted those clients, how do they retain them or have them sign on for additional services? The inbound marketing model has worked for many, many, industries, and is proving to be successful for advisors who know how to implement it correctly as well.
How do you get inbound leads? You give away some of your knowledge and expertise for free.
We’re not talking about offering free initial phone calls or consultations (although those can be valuable). We are talking about the “Freemium” business model (which, if you haven’t figured it out already, comes from the two words free and premium).
WHAT IS THE FREEMIUM BUSINESS MODEL?
The freemium business model is one in which you give away a core product for free to a large group of clients, and then sell a premium of that product to a smaller portion of clients from that base.
Coined by Jared Lukin in 2006, freemium is a pricing strategy where a company gives away a core product for free, with the hopes of converting a small number of users to paid, ‘premium’ users. Most digital software, media or game companies today utilize this strategy, with Evernote, Spotify and LinkedIn being some notable examples.
However, non-tech companies can also adopt components of this strategy for their businesses. In the world of financial planning, the freemium model can be a great part of a digital marketing strategy, especially since the information you provide will be online and tied back to your website, thus increasing your site’s SEO for the keywords and phrases you have chosen to provide advice on. By giving away valuable information for free, you are demonstrating yourself as a trustworthy, relationship-focused professional who ultimately wants to help people. And as an advisor knows, building a solid rapport is the foundation on which any successful long-term client relationship is built.
EXAMPLES OF THE FREEMIUM MODEL FOR FINANCIAL ADVISORS:
- Commenting on other financial blogs with relevant information
- Answering questions on Quora’s Financial Planning or Investment Pages
- Creating How-To Videos that walk a user through actions they need to take, step-by-step (like this one on setting up a self-directed IRA)
- e-books (check out David Grant’s Dollars & Sense for Teachers)
- Hosting your own free webinars
- Live Q & As
- Portfolio reviews
- Topic-specific seminars (estate planning, college-saving options, tax implications of certain financial decisions, etc)
- Other creative programs designed to showcase your expertise and experience.
HOW CAN A FINANCIAL ADVISOR USE THE FREEMIUM BUSINESS MODEL?
- You regularly write blog posts on topics of interest and relevance to your target audience (that are available to anyone)
- You produce an e-book or white paper of even more information specifically targeted to that same group. This is offered free, but visitors must provide contact information in order to access it (such as an email or phone number).
- You offer a free initial phone call to see if you and the client would be a good fit to work together
- You offering an fixed-price or flat-fee “package” for new clients (perhaps $250 to sit down for 2 hours and review a portfolio, discuss a specific topic, work on a specific tax issues, etc.
- You have a range of different service offerings on a long-term basis for on-going clients
These are just a few examples – we have seen many financial advisors take creative approaches to the freemium model. Regardless of structure, by offering different levels of service that have different pricing options (some free), you are allowing clients to first build trust with you and your firm, to get a real sense of the value you can provide and the expertise you offer, before coming on board with your firm. Optimally, clients who eventually choose to pay for your ongoing services will be so far down the funnel by the time they are regularly engaged with your services, they will be a brand advocate for you and your services.
The most important part of building a relationship with your clients is trust—so give them the opportunity to get to know you and your practice, and you will benefit in the long run.
WHY THE FREEMIUM APPROACH WORKS
There are common misconceptions that freemium is the same as a free trial or a demo. The difference is that a free trial allows for a trial period of the product or service before committing to the paid version of the product. With the freemium model, you get something completely for free that others may even charge for (giving you the sense of “WOW! This is just what I needed and it is FREE – where can I get more).
Optimally your free offering should be so valuable that prospective clients will get in touch just to tell you how helpful it was, or even be excited about the idea of talking to you (rather than hiding from your calls!) because they have seen the value of your expertise and have more questions to ask and more information they need.
Including multiple calls to action in your free content can also help to drive more client traffic to your paid services, which in the end is the main goal of offering free services in the first place. Overall, using the Freemium business model can help to grow and develop your business into a trusted and well-known practice. Try it out and let us know how it goes!
Sign up for a live demo of the Twenty Over Ten platform or attend an upcoming free marketing webinar here.