The Shadow Side of Marketing Success

By Jody Jacobson, PhD, MSBA

In keeping with the marketing theme of this issue of NAPFA Advisor magazine, this article shines a light on the shadow side of marketing success—growth.

When advisories succeed at filling their prospect pipeline through effective marketing and they convert their most ideal prospects into clients—i.e., convincingly “selling” them on the firm’s value proposition—they are likely to experience growth. Growth, in turn, predictably increases complexity and will shine a light on organizational blind spots, gaps, and inefficiencies.

Business journals are rife with stories of companies that lead with marketing and then struggle because they did not prepare for growth.

My own book, Organizational ADD: Refocusing Your Business for Growth and the now-classic business books, The E-Myth: Why Most Businesses Don’t Work and What to Do About It, The Innovator’s Dilemma, The Hard Thing About Hard Things, and Good to Great, all address these predictable challenges of organizational growth:

Growth generates complexity, which means there is more to do and manage—more staff to hire, train, and supervise; more compliance and operational coordination; and more psychodrama to deal with.

Complexity is likely to devolve into confusion, chaos, and preventable suffering when businesses lead with marketing without also building organizational capacity to seamlessly deliver on their value proposition.

The Paradox of Marketing Success

Waiting to build capacity until you are at the point of onboarding new clients is a recipe for failure and brand erosion.

While many firm leaders plan for the marketing, technical, financial, and legal sides of business growth, including succession, they often fail to plan for the messy organizational side where these components intersect with clients, especially internal clients (advisors, paraplanners, operations and compliance staff, next-gen owners and leaders, and others). Some components of the organizational side include but are not limited to:

• Alignment of espoused leadership theories and actual leadership practices
• Management of change and transitions
• Cultivation and care of firm culture and values
• Development and coordination of effective teams
• Effective hiring and training
• Work-life balance to prevent burnout
• Next-gen leadership development
• Management of unexpected aspects of change

Each of these factors has a human, psychological aspect to it. Dealing with these is smart leadership, not coddling.

Hidden Risks

Relying on a nose-to-the-grindstone approach to growth—working longer and harder to absorb more work, at least in the short term—often establishes a “tyranny of the urgent” culture that rewards heroic, firefighter behaviors. With this approach, advisors who value work-life balance, especially mid-career women, consider breaking away or moving to another firm. 

As an executive coach and consultant, I work with many advisors at this stage of their careers. Advisory owners may not understand the prevalence of this issue as help is sought in strict confidence.

The Antidote?

Get your organizational ducks in a row either before or in concert with developing and implementing your marketing strategies. Doing so allows advisory leaders and individual advisors to:

1.  Maximize their returns on investment and energy (ROI and ROE) of their marketing dollars and efforts
2. Avoid losing critical capacity—next-gen leaders, women, and other critical employees—to sustain and elevate their brand 

Firm leaders have a choice to implement growth strategies in concert with marketing efforts, or lead with marketing and catch up with capacity later. Effective, forward-thinking leaders do the former.

Three Critical Components for Sustainable Growth

To avoid the predictable yet often unanticipated negative consequences of marketing success, first create a comprehensive strategy for sustainable growth:

1. Identify your ideal target market/s to generate the growth you want. Focus your marketing dollars and strategy to attract the right clients for your firm and your brand, not just more clients. Ideal clients fit your brand and niche (what you do and who you do it for), can pay your fees, and are likely to generate great referrals down the road.
2. Determine the right pricing model for growth. Most firm leaders need to revisit their pricing models so they know which prospects to say “yes” to for right now and which ones to take on who may not fit right now but have great growth potential. For example, this may be accomplished with a tiered pricing model that supports a fair exchange of value for clients and advisors.
3. Develop an organization development strategy that aligns with your marketing and business strategies. Build the organizational capacity to address the bulleted items listed earlier. Doing so will help you be more resilient when dealing with unexpected consequences of growth and prepare you to serve new and existing clients without degrading your brand and creating internal chaos and burnout.

While I have addressed the first two points in previous articles, podcasts, and webinars, this article has focused on the third point, perhaps the most overlooked critical success factor (CSF) for long-term growth and sustainable success.

In my many years of consulting and coaching in the advisory space, I have found most owners and executives are masters of the business side of advising. Many, however, are not as familiar with the organization side—planning for and managing changes and transitions outlined here as well as those who may be dealing with aspects of succession beyond the legal agreements and spreadsheets. In other words, they are dealing with the messy, irrational, really hard stuff of leading and coordinating people.

A Final Note About the Shadow Side of Marketing

Just getting more clients will not solve all your problems but it is sure to generate new ones. If you already struggle to get to important goals, you will find it harder when you have more clients. This is normal and predictable.

More clients mean more work. Growing your business inevitably results in organizational growth and the need to coordinate more moving pieces and people. If you already feel stressed or overwhelmed, get help now! Problems are much easier to prevent than solve.

The Investment Conundrum for Advisors

Fiduciary Fee-Only advisors are masterful at helping their clients invest in building their ideal financial future. While these advisors may be open to investing in marketing services, they often find it much harder to justify investing in organizational support. Perhaps they believe they should know what they are doing. In fact, they would not be dealing with growth if they did not know how to grow an advisory business. Growing an organization, any type of organization, is another animal altogether.

If you need help traversing the predictable challenges of growth discussed here, invest in that help in time so you can get more clients while building a more profitable and enjoyable business for yourself and the next generation of owners.

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Jody Jacobson, PhD, MSBA, is a consultant and executive coach focusing on sustainable growth strategies, managing changes and transitions, cultivating next-gen leaders, and effectively addressing women’s issues in the advisory space. She can be reached at jody@jodyjacobson.com or on Facebook.

image credit: istock.com/William_Potter