Effective CTAs help guide users toward becoming leads or clients by driving engagement and interest.
Sales
Conversion rate
This is the rate at which you move someone along a sales funnel. There are five conversion rates financial advisers/planners need to understand:
The headline conversion rate: This shows the number of enquiries you need to take on a new client.
Calculation: Total number of new clients taken on ÷ total number of new enquiries
Right fit rate: This shows the number of enquiries from 'right fit' prospects – those you want to work with – and helps you understand whether your marketing is working.
Calculation: Total number of 'right fit' enquiries ÷ total number of new enquiries
First meeting conversion rate: This helps you understand whether your processes for booking first meetings with new prospects are working (a surprising number of firms aren’t good at this).
Calculations: Total number of first meetings ÷ total number of new enquiries, or total number of first meetings ÷ total number of 'right fit' enquiries
First meeting to client conversion rate: This helps you determine whether your pricing, proposition, processes, and sales techniques are working.
Calculation: Total number of new clients ÷ total number of first meetings
Recommendation rate: This helps you understand if you’re maximising the recommendation opportunity.
Calculation: Total number of recommendations received in a year ÷ total number of clients
CRM (Customer Relationship Management) system
This is software used to manage interactions with prospects helping you to convert more of them into clients.
Examples include Salesforce, Pipedrive and HubSpot.
Lead nurturing
Lead nurturing refers to the process of turning prospects into clients.
The better you and your business nurtures prospects, the higher your conversion rate will be.
This saves money because you’ll need to spend less on marketing while your business will operate more efficiently.
Retargeting
An online advertising strategy, usually using social media or display ads on other platforms, targeting people who’ve been to your website and encouraging them to return.
CAC (Client or customer acquisition cost):
This represents the total cost of acquiring a new client, including marketing and sales expenses.
Ideally businesses want their CAC to be as low as possible.
Referrals and recommendations from existing clients always have the lowest CAC compared to other options.
Churn rate
The percentage of clients who no longer use your services, compared to new clients coming on board.
While some churn is inevitable, keeping it to a minimum improves business efficiency and helps to reduce marketing spend.
This concludes this four-part mini-series on marketing jargon.
We hope it has helped you understand some of the terms loved by marketers and often misunderstood by advisers and financial planners.
Phil Bray is founder and director of The Yardstick Agency
