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Marketing Mix Podcast with Mark Mersman

Mark Mersman discusses marketing an intangible service in a highly regulated financial industry

November 20, 2019

Joining us on the Marketing Mix Podcast is Mark Mersman, CMO at USA Financial. In this episode, Mark discusses marketing an intangible service in a highly regulated industry, building trust and credibility without third-party validation, and why high-value purchase or investment decisions are the most rewarding challenge. In evaluating the impact of politics and tech on marketing in the financial world, Mark shares his predictions for what the next 5 years might look like for financial marketers. 

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Jeff Ragovin: You’ve been at USA Financial for over 15 years. Can you tell us more about your role?

Mark Mersman: When I started with my firm, we actually had 3 entities under the roof and we have now grown to 7. All of the entities underneath our roof focus on financial advisors and that is our number one client, and then, in turn, their client is the end consumer or the investor. Essentially, what’s really cool about my role is that the independent financial advisors all have their own personal brand that we get to help them build. Ultimately, they need to be able to connect with an entity like ours in order to transact deals with consumers. They come to us, and often times they’re starting from ground zero, and we go through the branding process, the marketing calendar, and the funnel. 

Even though I’ve been a part of some of the launch of entities right under our roof, I’ve also been able to work with over 300 advisory firms throughout the country. I get to see the fruits of their labor and they've made the decision to start their own business. Everyday is something new. I’d be lying if I told you that I loved all the regulation in the industry - that gets to be a bit of a pain for us. While I certainly understand the need for regulation, as a marketer, there are a lot of handcuffs that get put on us. As financial marketers, that’s one of the biggest challenges we have to navigate through. 

Jeff Ragovin: What do you love about your job?

Mark Mersman: The thing that I love the most is the challenge that it brings. In the financial services industry we are selling something that is completely intangible. While you can argue that a stock, or a bond or an insurance product is tangible, the end consumer might not see it in the same light. The challenge we have and what we try to help the advisors with is to create tangibility in an intangible world. We do that by helping advisors create an experience for their clients. You can go anywhere down the street and purchase an investment, or go online and purchase an investment, so how do you create professional contrast so that the consumer is ultimately going to choose you as their advisor or financial professional. 

Jeff Ragovin: What are some of the biggest challenges that you have to deal with in marketing intangible services? 

Mark Mersman: Marketing 101 is to build credibility. Often times, third-party validation is key for building credibility. Third-party validation might include customer testimonials or reviews. The regulation in our industry does not allow that, and so we can’t leverage our advisors from a testimonial perspective which poses an interesting challenge because now we have to build trust and credibility in different ways. Often times, building credibility is going to be done through a lot of PR, creating tangible assets that start to explain the process and not the product. We try to de-emphasize product as much as possible. 

Jeff Ragovin: In the highly regulated industry what are some of the things that work well in terms of marketing?

Mark Mersman: Marketers are always focused on ROI. In our industry its not uncommon for a new client acquisition cost to be a big expense. The marketing we typically see perform well is around events and targeted direct mail. Educational workshops give advisors great opportunities to present their knowledge to prospective clients and to build trust with them. We work with the advisor to define who their target market it. We use that targeting to inform who we send direct mail to. We have started to do a lot of Facebook advertising. It has been an interesting challenge over the years to weigh the pros and cons of leveraging digital marketing versus more traditional methods of marketing, like direct mail. We have found that we can get a lot of people to raise their hand and say “I’m interested” on Facebook, but getting them to convert is not so easy. Our cost to get somebody to raise their hand through facebook advertising might range from $30-40, yet about 80% of them won’t show, versus direct mail which might cost us $80-100 to get them to raise their hand, but they are far more invested and likely to show. We like to retarget prospects for events with a second batch of direct mail, and we find that 40% of average attendees come from that second batch. 

Jeff Ragovin:  Do you see the financial sector getting even more regulated when it comes to marketing?

Mark Mersman: I don’t think regulation is going away. Keeping an eye on the political environment is really important for us because depending on who is in office will define the type of regulation we have to face. The really interesting thing for us is to see the wealth shift take place. As the baby boomers are going through retirement and we start to see wealth change hands, how the next generation of consumers want to interact with their financial professionals will change. In saying that, I think that the role of technology plays an important part. As new consumer groups come into making more financial decisions with advisors, we will start to see a demand to meet virtually with clients. Our industry, from a regulatory standpoint, really doesn’t know how to completely wrap its arms around that compliance wise. When it comes to tech and social media, the financial industry is finally starting to catch up. 

Jeff Ragovin:
 Thank you for joining the Marketing Mix Podcast.

Please note, the above has been paraphrased for editorial purposes