When banks lack the resources to put marketing muscle behind their investment reps, some advisers are finding creative but inexpensive ways to get their messages out.
Advisers in smalltown and big-city Minnesota and a regional sales exec at KeyCorp in Ohio shared their strategies for finding prospects without spending a lot.
Gary Gahler, an Investment Centers of America rep at Pine City State Bank in Minnesota, has made himself something of a media celebrity in his community.
He has been dispensing sound, if generic, financial advice over the local airwaves since February 2001 - and making money at it. He credits at least $100,000 of his $500,000 of production to leads turned up by his radio show, which is broadcast Tuesday and Thursday mornings at 8:30.
Mr. Gahler, who works from a compliance-approved script, presents the show live from his office, while the radio station announcer does the other side of the conversation, from the script. For $20 a show, the program is broadcast live on FM and later, in a recorded version, on AM radio.
"It's a 10-minute, Paul Harvey-esque thing," Mr. Gahler explained. "The announcer introduces today's investment topic at the Pine City State Bank office, which might include stock prices for companies that affect local businesses - there are Ford and Chevy dealers in town - and then I'll move on to 401(k) rollovers or IRAs."
He gets his ideas from promotional pieces he receives from wholesalers and from reading the financial news, Mr. Gahler said. Then he writes a script, leaving blanks for specific stock prices, and sends it to ICA's compliance department. "I do four or five presentations at a time, which lasts me a month," he said.
Pine City's 10,000 residents have access to only two local media outlets, the radio station and the town's weekly newspaper, in which Mr. Gahler also advertises. But it is the radio show that makes the difference to his business. "I communicate with thousands of people at once, far more than I could manage at any seminar."
ICA encourages its reps to follow in Mr. Gahler's footsteps, asking him to present talks about his radio show at regional and national conferences. He now distributes his scripts to a dozen or so reps in eight states.
"They don't pay me," he said, "but ICA has a profit-sharing plan, so if others do well, it works for everyone." He said he has no radio training whatever; "it was just a case of getting a decent script together."
Jon Kvasnik, the sole investment rep covering five bank branches for Cherokee Investment Services in St. Paul, has found out the hard way that spending fistfuls of dollars does not always pay off. Like his competitors, he used to invite clients to a pricey local steakhouse for their lunch-and-learns. "I tried that once, with very little conversion," he said. "I fed 180 people at $30 per head, and 90% of the people there weren't even qualified, so I never did it again."
Mr. Kvasnik's clients are much happier, he said, being addressed at their everyday eatery at $9 per head. "That's where clients go when they choose for themselves, not some high-end restaurant," he said. "They prefer it."
Because it is a fixed price, he knows exactly how much the exercise will cost, around $500 with tax and tip - not too steep given a captive audience of 50 people. Mr. Kvasnik's guests, who pay for their meals with the coupons he passes out, must give him their name, address, and telephone number to qualify. About five of every 40 people at these lunches becomes a client, he said.
Mr. Kvasnik has used other tools to heighten awareness of his services. For example, he distributes "retire-mints," 2,500 bags of candy, through BankCherokee's drive-up kiosks just before IRA season and through tellers on Fridays, when Social Security checks are deposited.
"The idea was just to get it into their heads," he said. He also has leveraged BankCherokee's marketing relationship with the area company that maintains bus-stop benches to put his name and phone number (with the obligatory broker-dealer small print, of course) on a bench at one of the city's busiest intersections.
Eric Baldwin, a regional sales manager at Key Investment Services in Sandusky, Ohio, and an industry veteran with 26 years of experience, said he uses Snickers bars and Life cereal boxes stuck to the walls or ceiling of the bank branch where he works to market his services.
Of course, customers want to know why a Life box and a Snickers bar are hanging from the ceiling, and that gives reps the opportunity to say, "we take the 'if' out of your financial life" or "your financial independence is nothing to snicker about." On Fridays, each branch buys a cake wishing an anonymous party a happy retirement. Walk-in clients each get a slice. When they ask who is retiring, the bankers reply "You are! And we have an expert who can help you." Mr. Baldwin admitted this is a little trite but said it gets results.
Like Mr. Kvasnik, Mr. Baldwin learned the hard way that big expenditures do not necessarily produce big sales. Costly print ads in publications such as Barron's tend to get lost in the mix, he said, and he has had better luck attracting clients through an event in a bowling alley than he had at a four-star resort.
If something looks like it cost the bank a lot of money, he said, "it looks like the advice will come at a high cost, too. We're dispelling that myth."
Mr. Baldwin also has generated significant business using a marketing effort that cost even less than a Snickers bar. The idea is beguilingly simple - use a paper punch to puncture statement stuffers and business cards, prompting questions from potential clients. A KeyBank employee or investment adviser replies: "We can fill your financial holes." Corny, but effective.
"We use a tracking sheet for how many times a client has been shown [marketing material with a hole in it], whether that has led to an inquiry, whether the client made and kept an appointment, and how much business was done," Mr. Baldwin said. "We've been doing this for three weeks now, and we've seen a 35% increase in business just on this one activity."
