Via Barron’s： Top Advisor Explains Huge Return on Marketing
Marketing and communications is expensive, and advisors everywhere are dubious about its value. But Steve Cassaday wants you to jump in with both feet and run the function in-house rather than farming it out.
The right time to get started? “Day one, when the door opens,” he says.
Cassaday heads Cassaday & Co., a $2.3-billion-AUM, 1,900-client firm in McLean, Va. He’s Barron’s top-ranked advisor in the state, and 33rd on our just-released Top 100 ranking for 2018. He tells me that having an in-house marketing operation, while expensive, has probably helped the firm attract hundreds of clients it otherwise wouldn’t have.
Cassaday’s two-person communications team makes sure that everything clients see or hear about the firm—from digital marketing campaigns to seminars, from media interviews to website copy—is impressive. “We want our competitors to look at it and go, ‘Damn, that’s really good,’” he says.
Starting his firm in 1993, Cassaday studied thriving businesses for clues to their success. “The common thing for people who went from scratch to being significant was marketing,” he says.
At first, he handled marketing himself. As the firm grew, he turned to agencies, with poor results. “The firms’ (focus) is so diluted—they’re talking to all kinds of industries and businesses,” he says. “They don’t get the nuances.”
Insourcing is more expensive—the firm shells out seven figures a year. Other advisors go pale when Cassaday shares his marketing budget, but he presses the case.
“There is no place in the investment universe that you can put money where the return is as good as your practice,” he says. “It’s a tax deduction, and the ROI is embarrassing.”
While it’s hard to quantify marketing and communications’ return on investment, Cassaday guesses it’s between 150% and 200%.
New firms might have to starve a little while waiting for the payoff. In the two and a half years after launching the business, Cassaday spent his life savings and made payroll on credit cards. But the marketing ultimately helped the business achieve a critical mass of AUM, which “allows you have cash flow, make your firm the most compelling choice in your community,” he says.
Cassaday hired several different people over the years before finding the best fit for the position. That’s marketing and communications manager Michelle Tigani, assisted by associate Brooke Orlando. “This position is about personality mostly, and the skill sets are virtually impossible to measure in advance,” Cassaday says. “It’s a real gut hire.”
Once you’ve found the person you trust to manage the firm’s image, “get out of their way and empower them to run the department like a separate business,” Cassaday advises.