The 10 Marketing KPIs Financial Advisors Must Track to Boost Growth

Introduction

As competition for new clients increases, effectively measuring and tracking marketing performance is critical for financial advisors and firms. With the rise of digital marketing and access to more data, there are many metrics advisors should monitor to optimize their marketing strategy and demonstrate ROI.

This article will provide an overview of key performance indicators (KPIs) that are essential to understand the success of marketing efforts. Tracking metrics like website traffic, lead generation, cost per lead, and return on investment enables advisors to connect marketing activities directly to business growth and profitability.

By regularly analyzing marketing analytics and setting measurable goals, financial advisors can continually improve performance. Utilizing the right tools and benchmarks allows advisors to showcase the value of their marketing to acquire and retain ideal clients.

Website Traffic

One of the most important metrics for financial advisors to track is website traffic. This includes analyzing new versus returning visitors, traffic sources, and popular landing pages. According to research from Ruler Analytics, direct traffic accounts for 26% of visits to financial services websites. This highlights the importance of word-of-mouth marketing and brand awareness in driving traffic.

When reviewing website analytics, advisors should pay attention to the percentage of new visitors compared to returning visitors. A high number of new visitors shows that marketing efforts are successfully reaching and attracting new audiences. Meanwhile, a large proportion of return visitors indicates strong engagement and loyalty from existing clients and prospects. Comparing traffic sources provides insight into which marketing channels are most effective at driving visits. This data can inform budget allocation across SEO, PPC, email, social media, and other campaigns. Finally, identifying top landing pages shows which website content and offers resonate best with visitors.

According to research from Similarweb, the average financial services website gets around 600,000 visits per month. Advisors should compare their own traffic figures to these industry benchmarks to gauge performance.

Sources:

https://www.ruleranalytics.com/blog/reporting/financial-services-marketing-statistics/

https://www.similarweb.com/blog/research/business-benchmarking/financial-services-benchmarks/

Lead Generation

Lead generation is one of the most critical metrics to track for financial advisors. This refers to the number of leads captured through your various marketing initiatives and outreach channels. Common lead generation metrics include:

• Inbound form fills on your website, landing pages, or online ads
• Calls and voicemails inquiring about your services
• Email inquiries submitted via a contact form or direct emails
• Requests for appointments, consultations, or information

Financial advisors should aim to generate a steady volume of high quality leads on a consistent basis. This ensures you have a solid pipeline of prospects to nurture and convert into customers. According to Carson Group, top performing advisors generate 50-100 new leads per month. Consider leveraging referral networks, content marketing, events, and advertising to generate more leads. Track lead volume over time and set specific lead generation goals to hit.

As per Carsongroup.com, "Lead Generation for Financial Advisors", an effective lead generation strategy is critical for the growth of a financial advisory firm. Advisors should utililize multiple techniques such as referrals, events, content, and advertising to generate a steady stream of new leads. Goals should be set and lead sources tracked to optimize results over time.

Lead Quality

Lead quality refers to the value and potential each lead has for converting into a paying customer. It's crucial to measure lead quality so you know which prospects are most likely to turn into customers. Here are key components of lead quality to analyze:

• Lead score - This numeric score can be based on criteria like demographics, interest level, and behavior. Rank leads to prioritize those likely to convert. According to OptinMonster, scoring leads makes it 67% more likely to qualify sales opportunities.
• Demographic info - Details like job title, industry, age, location reveal if a lead matches your target customer profile. Filter leads by demographics to focus on your best-fit audience.
• Interest level - Metrics indicating engagement reveal how interested prospects are. Track opens, clicks, form fills, time spent, and page views. According to Indeed, highly engaged leads are more likely to convert.

Regularly analyze these lead quality factors to determine the hottest prospects to nurture towards becoming customers. Focus your efforts on the highest quality leads first.

Cost Per Lead

One of the most fundamental metrics for financial advisors to track is the cost per lead. This measures the average spend required to generate each new sales lead. It is calculated by dividing total marketing costs by the number of leads generated in a given period.

According to industry research, the average cost per lead for financial advisors ranges from $500 to $700. However, costs can vary significantly based on the lead generation strategy. Paid digital ads tend to have higher costs per lead, often from $1,000 to $2,000 according to this report. More targeted lead generation with content marketing or referrals can produce leads at lower costs under $300 per lead.

By tracking cost per lead regularly, financial advisors can determine the return on investment from their marketing campaigns. If the cost per lead rises over time, it may indicate declining performance. Advisors can then test new strategies to lower cost per lead back to an acceptable level.

Conversion Rate

The lead-to-customer conversion rate refers to the percentage of leads that end up becoming paying customers. This metric shows how effective your sales team is at closing deals from the leads generated by marketing. According to InvestmentNews, the average conversion rate for financial advisors is around 37%.

To calculate your conversion rate, take the number of customers acquired in a period and divide it by the number of sales leads in that period. For example, if you generated 1,000 leads last month and closed 150 as customers, your conversion rate would be 15%.

Aim to track conversion rates over time and optimize your lead nurturing process to increase this closing ratio. Work closely with sales to identify bottlenecks in the sales cycle and develop solutions to convert more prospects. Conversion rate benchmarks can vary greatly by industry, so focus on improving your own rates over time.

Customer Lifetime Value

Customer lifetime value (CLV) measures how much revenue a customer generates for your business over their entire relationship with you. For financial advisors, calculating CLV for clients can provide useful insights into the profitability and repeat business from your book of clients.

To determine customer lifetime value, take the average annual revenue from a client and multiply it by their average length of service or lifespan as a customer. So for example, if your average client produces $5,000 in annual revenue for your firm, and stays with you for 5 years on average, their lifetime value would be $25,000.

For financial advisors, lifetime client value tends to range from $40,000 to over $80,000 according to industry research, with higher-net-worth clients naturally generating more. Therefore, attracting and retaining those high-value clients should be a key goal.

A few strategies to maximize CLV include:

• Providing excellent client service and financial advice to earn repeat business year after year.
• Upselling additional services like tax planning or insurance products.
• Asking for client referrals to acquire similar high-lifetime-value clients.
• Offering incentives for long-term clients to maintain the relationship.

By regularly assessing customer lifetime value for different segments, advisors can focus their marketing and retention tactics on the most valuable clients.

ROI

Return on investment (ROI) is a key metric for determining the success of marketing efforts. ROI calculates the revenue generated that is directly attributable to marketing activities, compared to the costs of those marketing campaigns and initiatives. As explained by SnappyKraken, "ROI shows how many dollars are made for each dollar spent on marketing" (Source).

To calculate ROI, financial advisors should track revenue from new clients, renewals or upsells that resulted specifically from marketing campaigns. This revenue data can be connected to leads and sales in the CRM. The direct marketing costs, like advertising, emails, events, etc. are totaled. ROI is calculated by dividing the revenue by the marketing costs, which determines the return per dollar spent.

According to research by StepChange, the average marketing ROI for financial services is $3.09. However, top performing advisors see ROIs from $6 to $12. Setting goals based on these benchmarks allows firms to optimize their marketing ROI (Source).

Connecting Marketing to Business Growth

One of the most important aspects of marketing analytics is connecting your marketing activities directly to business growth and profitability. Here are some of the key ways to make this connection:

Analyze lead quality over time - are the leads you're generating from marketing converting to customers at a higher rate? Look at lead quality factors like lead score, demographics, and expressed interest to see if marketing is improving the quality of leads coming into your pipeline. As noted in an article on financial services marketing attribution, "tracking lead quality metrics can uncover the campaigns that generate high-intent prospects" (https://morganandco.com/financial-service-marketing-attribution/).

Closely monitor your lead-to-customer conversion rate. An increase in conversion rate is a strong indicator that your marketing efforts are producing better qualified leads. Set a target conversion benchmark to aim for.

Calculate the customer lifetime value of leads acquired through marketing. Analyze revenue per customer to determine the long-term value driven by your marketing campaigns. As explained in research on growth marketing in financial services, analyzing lifetime value "has allowed the marketing team to optimize spend toward campaigns that drive higher value over time" (https://pathmonk.com/growth-marketing-in-the-financial-services-industry/).

Directly tie marketing costs to revenue generated from marketing-sourced leads. Look at marketing attribution and subtract your total marketing costs from the revenue produced by new customers acquired through marketing. This helps clearly visualize marketing ROI and growth impact.

Marketing Analytics Tools

There are a variety of marketing analytics tools financial advisors can use to track and analyze campaign performance. 4 Promising AI Tools for Financial Advisor Marketing and Prospecting outlines some top options.

Google Analytics is the most widely used web analytics platform, providing visibility into website traffic, acquisition channels, landing pages, goals, and more. This enables advisors to connect marketing activities to website engagement and conversions.

A CRM (customer relationship management) system helps track prospects and leads over time, following them through the sales funnel. CRMs provide insights into lead quality, interests, and engagement.

Marketing automation tools allow for more advanced lead nurturing and scoring, multi-touch attribution, and personalized outreach at scale. They can attribute new business growth directly to marketing initiatives.

Conducting surveys is a simple way to get direct customer feedback on the effectiveness of marketing campaigns. This qualitative data supplements quantitative analytics.

Setting Goals and Benchmarking Metrics

It's important to set specific, measurable goals for each marketing metric you are tracking. This allows you to continually optimize your campaigns based on performance versus those goals.

First, conduct research to determine industry averages and benchmarks for the key metrics you have identified. Resources like the Financial Advisor Coach provide typical metrics and statistics across advisor firms.

Next, use these benchmarks to set tangible goals for metrics like website traffic, lead generation, cost per lead, and conversion rate. For example, you may set a goal of increasing website traffic by 20% month-over-month or improving lead conversion rate by 10% quarter-over-quarter.

With clearly defined goals established, you can regularly review actual performance data versus your targets. Metrics consistently underperforming goals should be optimized through A/B testing content, changing call-to-actions, or refining target audience. Exceeding goals indicates successful strategies to continue leveraging.

Setting specific goals and optimizing based on performance vs. benchmarks will help maximize the success of marketing campaigns over time.

Reviewing Metrics and Improving Campaigns

Consistency when reviewing marketing performance metrics is crucial for identifying issues and making optimizations. Financial services firms should schedule time every month to analyze all metrics and KPIs across marketing channels and campaigns.

Creating detailed performance reports allows you to easily compare metrics month-over-month and year-over-year. Look at overall website traffic and engagement, lead generation and quality figures, cost per lead, conversion rates, customer lifetime value, and marketing ROI. Analyze each metric and understand the trends.

When reviewing reports, dig into the data to identify any low-performing areas that need improvement. For example, if cost per lead rises dramatically, that indicates inefficiency in lead generation activities. Or a sudden drop in website traffic could signal technical issues or problems with content and SEO. Identify issues and come up with hypotheses for their causes.

Develop tests and iterations to fix underperforming marketing activities. Try new offers, content types, landing pages, ad creative, and more. Set goals for improving key metrics and continue optimizing until you exceed your benchmarks.

Improving Campaigns

Once you've reviewed your marketing metrics and identified areas for improvement, the next step is to test changes to underperforming campaigns and continue optimizing. As the old saying goes: "If you keep doing what you’ve always done, you’ll keep getting what you’ve always got."

Some best practices for optimizing marketing performance include:

• Develop A/B tests for email subject lines, social media ad copy, landing pages, etc. to improve conversion rates. Switch out elements and track the results to determine what resonates best with your audience.
• If a particular campaign like a webinar or event is underperforming, survey attendees to find out how you can improve the content and experience.
• For low social media engagement, try creating different types of content like images, videos, and infographics - not just text updates.
• Identify the lowest traffic landing pages on your site and consider refreshing the content or repurposing it into a different format.
• Stay on top of changes to ad platforms and leverage new features - for example, LinkedIn recently added support for multiple text ads.

By continually testing and optimizing your financial advisor marketing, you'll be able to boost metrics across the board. The key is to have the analytics in place to identify poor performers, the creativity to come up with improvements, and the initiative to actually execute changes. As they say, the proof is in the pudding - so keep tasting your marketing results and making adjustments until you've baked up the perfect recipe for success.

Conclusion

It's critical for financial advisors and firms to closely monitor and optimize their marketing performance. By regularly reviewing key metrics around website traffic, leads, costs, and revenue growth, you can gain invaluable insights into what's working and what's not.

The key takeaways for measuring marketing success include:

• Track website analytics like traffic sources, landing pages, and goals completed.
• Monitor lead generation and lead quality over time.
• Calculate cost per lead and ensure it falls within target.
• Connect marketing campaigns to business growth through conversion rates, customer lifetime value, and ROI.
• Leverage tools like Google Analytics, CRM, marketing automation to gain data.
• Set specific, measurable goals for each metric.
• Conduct monthly reviews of reports to identify improvements.
• Continually test and optimize campaigns to reach your goals.

By regularly analyzing performance and implementing optimizations, financial advisors can ensure their marketing strategy delivers compelling results.

Call to Action - Start Measuring Marketing Today

The key takeaway from this guide is the importance of implementing a robust system to measure your marketing efforts. Tracking performance regularly and setting measurable goals allows you to see what's working and optimize accordingly.

Don't leave the success of your marketing campaigns and growth of your business up to chance. Start dedicating time each month to dig into your metrics using the tools discussed here.

Set benchmarks for each KPI and monitor progress towards your targets. Continually test and refine your marketing strategy based on the data-driven insights.

Most importantly, connect your marketing activity to business growth. Prove the revenue and profit you generate as a result of your marketing spend.

Begin putting these best practices into action now to boost results. Consistent measurement and optimization is the key to maximizing your marketing ROI and achieving your firm's growth objectives.