What RIAs Should Know About Data-Based Marketing

What You Need to Know

Asset managers and investment banks use data-driven marketing to great effect.
Experts say RIAs can do the same, but they may need to bring in outside experts and data.
Another key to success is setting clear goals and focusing on the most relevant and reliable data.

Asset managers and investment banks use data-driven marketing to great effect, leveraging both first- and third-party data to generate new client leads and convert potential customers into engaged users of their products and services.

Traditionally, independent registered investment advisors have relied less on marketing, preferring to generate new business through referrals, cold calling and community engagement. Bigger firms have also turned to acquisitions to fast-track growth in an increasingly competitive advisory landscape.

But, as explored by an expert panel during in a recent webcast hosted by ThinkAdvisor’s parent company, ALM, growth-oriented RIAs could likely benefit from rethinking their marketing approach — especially the opportunity to collaborate with external data providers and marketing agencies to create modernized marketing campaigns.

This is especially true under the more flexible marketing rules adopted in recent years by the Securities and Exchange Commission. Advisors still must exercise caution in how they present themselves to the public in published materials, of course, but there is more room today for telling advisors’ stories in an engaging way.

In addition to representatives of ALM, the panel included Stephen Love, group director at Ptarmigan Media. Love and his firm cater to Wall Street’s top investment banks and asset management firms to design custom solutions to grow brand awareness, increase engagement and generate leads.

As Love and the other speakers emphasized, best practices in financial services marketing have evolved dramatically in recent years, reflecting the digitization of the industry and the rise of artificial intelligence tools. By working with skilled vendors, Love said, firms of all stripes can find new sources of growth via data-informed marketing.

Where Does the Data Come From?

Before moving into paid marketing programs, the speakers emphasized, it is important for firm leaders to understand the data landscape as it exists today. Broadly speaking, customer data exists in various forms, and it comes from different sources and systems.

Data that companies gather directly from their customers is known as “first-party data.” Data obtained from partnership or purchased from external sources is referred to as second-party and third-party data, depending on the exact nature of the exchange.

There’s also a newer category called “zero-party data,” which is data that is voluntarily and deliberately shared by consumers through such pathways as quizzes, polls or public website activity.

Not all of this data is created equally, Love warned, but all data can be useful in some way if it is properly contextualized and organized.

The Types of Data

Generally, first-party data comes from a direct relationship with the consumer. It is collected with consent, which matters in the current data-security and privacy environment. It is also generally going to be individualized and accurate — making it useful for inputs into decision-making systems and even AI tools.

The type of information contained in this data can vary a lot — ranging from simple inputs like customer emails and phone numbers to information like purchase histories, support history and loyalty program info.

Second-party data is also individualized, and generally it is collected with consent. This generally includes information like customer feedback, customer surveys and website activity.

Second-party data shares a lot with first-party data, the experts noted, and in the context of financial services it can be particularly useful, given that second-party data providers (like ALM) are in the business of spending time and resources to ensure their datasets are accurate, timely and actionable.

Moving to third-party data is an important step, the panel explained, because it is often less clear to what degree the data was collected with consent. As such, this data is often presented in an aggregate form, potentially reducing its utility in the context of niche financial services marketing applications.

Another downside is that such data is often going to be shared widely for a variety of purposes.  This in turn means there is generally less of a competitive edge to be gained in niche markets by accessing and utilizing the information.

How Marketers Put Data to Work

Asked to detail how financial services firms can engage with external marketing resources, Love gave an overview of the typical process.