Ep. 85 - Erica Pauly: Understand Your Numbers

From our human condition, we can recall about five to seven stats or things or objects. I don't know if you've ever done any of those things where they put, you know, 10 items in front of you. How many can you name? We can name five to seven, but we are 22 times more likely to remember things and more details when they're told in a story form. So, like psychology speaking, if we can wrap stats and facts in a story for these advisors, their neurons are just strengthening so that it makes a lot more sense. They can retain it a lot more, and again, now they're equipped to make decisions moving forward. So this is why the stories matter. You can look at a dashboard all day or you can look at a graph, and that's fine. But that's step one. If there is not a story being woven through all of that, you will probably forget it and it won't sit well or resonate with you.

This is the Business of Advice podcast, where we help good advisors become great business owners. We are back with another great episode of the Business of Advice podcast. Today we are going to do a deep dive into data, the data that your firm is generating. But also how do we take that and turn it into actionable insights to really grow the business, serve your clients better. And one of the things we talk about all the time is create more profitability in the organization. I am fortunate to be joined today by a longtime friend, Erica Pauly, who is the founder and owner of Track that Advisor and author of Tracking youg Trek. So we'll plug the book here.

Thank you.

And she is going to be sharing her expertise with us. So, Erica, welcome to the Business of Advice.

Thank you. I'm excited to be here.

Well, this is the business of Advice is kind of the world you live in, I guess. So why don't we start just at the beginning? Tell us about kind of your origin, how you came to found track that advisor, and then maybe just even a little bit about what the business is that you do.

Okay, so we were the data people before data was cool. I feel like we've done. We preached this story for a decade before anyone thought, oh, maybe there is something to this. So I started in this industry a long time ago. I started in 2009 as a marketing director for Financial Advisor and loved it. I was an English major, so I thought I'd be writing copy and doing all these things. And that was. That was not necessarily the role of a marketing director for a financial advisor. It's more putting together pieces and fitting the puzzle. But they came back from an event and they had met someone who wasn't doing dinner seminars anymore. And they said, we don't want to do dinner seminars. I don't think we make money on them. Let's scrap it all together and move forward. And I'm sitting here as their marketing person saying, this is a terrible idea and I have no data to back this up. And so I felt like I failing. So I went back to the drawing board and I put all the pieces together. I was doing all the company books at the time and I sat them down and said, look, that's one of our highest ROIs. We are doing really well here. Can we just hold off on scrapping this idea? And that's when I fell in love with the data piece. I did that with them for another four years and then my husband and I moved and relocated and they said, we will hire out the marketing side, but you have to do the data. There's no one in this industry that does that. No one is talking about this. And I said, you're right. Let me start a little company and you can be my first clients. So that was how track that advisor was, was formed was just the fact that someone needed it. I'd been doing it a long time and I'm so passionate about it. I love advisors. I love what they're trying to do. I believe in what they're doing and I just want to be an advocate to them. And that's what track that advisor does for just being an advocate in the data side of things for these advisors.

This will be one of those episodes where obviously it's going to speak very specific to financial advisors because that's your primary audience. But I think anyone who's a business owner, entrepreneur, we're going to dive into just how important, like knowing your business, I think and how you use the data to make smarter, more intelligent decisions. Like you said, the example of like, we want to stop doing this because we heard someone else stop doing it. But then when you actually look at the data, it's like, no, it's our most profitable marketing funnel. Why would you ever stop doing that? And I think not just advisors, but any small business owner, a lot of times you have the tendency to chase like the shiny object and not actually make like data informed decisions. So I don't know how many advisors you work with at Advisors Excel now. I know it's a lot. And so I think that's the other neat thing is like you're really going to be able to give that perspective of seeing this, this data from lots of different offices across the country.

And we've even dabbled to your point. I mean, any industry can use data. We've dabbled in with hospitals, with dental practices. I mean, we've with. With golf Vacation. So we, we've helped a lot of other business owners with the data side, but advisors are my favorite, so we sit primarily in that circle. But you're right, any industry can and should absolutely use it. So, yes, if you're not in the financial space, there's certainly benefits for this conversation as well.

Well, let's kick it off. So like, let's say first conversation with a new client, right. Any business, I think an advisory business, but any business is there's a lot of data. They, they have maybe a lot of times not necessarily organized, they're not sure where to start. Like, how would your conversation go around? What are the benefits of really? I'll say starting with organizing your data and then knowing it and being able to use that. So how would you kind of have that first conversation of why someone as a business owner would want to really, I'll say utilize your services, but maybe a better way of saying, like, utilize data to make smarter decisions.

Yeah. Okay, I'm going to get a little bit psychological and sciency on you here. But it goes in step with. Okay, so there's something called inattentive blindness in attentional blindness is what it's called. So they've done all these studies. And the way that our brain receives stimuli, there's millions of pieces of stimuli that are coming at us at all times. And so our brain and our eye decides what's important, even though there's tons of other stuff going on. So the way that we kind of explain this to a lot of people or our clients is if you watch football, we as spectators or people watching the game, our eyes on the ball, right? The whole play, we're just watching the ball. Is it getting past who's running it? But the play is over. The whistle blows. Let's say a flag is thrown, and all of a sudden you have like five or six commentators that are backing it up and saying, okay, this is actually what happened, right? So this, he's running over here. They're drawing a line, they're circling someone. They're showing us everything that just got encapsulated in that entire one play. And so when we talk to advisors, I'm sitting here saying, we're the comment. So you have your eye on the ball. You are in the business, you are focusing on really specific things, but there's inattentional blindness that happens and you aren't seeing the million other pieces. It's our job to paint that picture for you. Because some details matter sometimes and some of them matter other times. So for us to really bring this into a cohesive story is our job for them. And then they can leverage, then they can make the decision, then they can make, you know, whatever the next play is going to be or however they want to move forward. They have the empowerment to do that. And sometimes they're just seeing the one thing. They're just seeing the ball or they're seeing the one problem. And we can sit here and say this, that's not a problem. But here, here's why. I know I got a little bit psychological on you there, but that proves my point on the commentator side.

Yeah, it's a great, great analogy or way of describing it. One of the things, I think too, we were joking a little bit before we started, like, you've got this reputation as you're the Google Sheets people. You put all the information together for them to look at. But I think the more important thing that you do, and this is what I was sharing with you, I try and tell advisors is like, yeah, it's great that Eric and her team are going to help you organize your data, but the more powerful thing they do is actually coach you around how to use that to make more informed decisions. Can you just talk maybe a little like, what does that process look like? What are you trying to help a business owner see in their business? And what type of decisions are you trying to help them make that you're using the data to make those informed decisions around?

Yeah, so we start with fundamentals. That's really important in data is we have to get the baseline correct. And what we start with, with them is one, where are you trying to go? No two advisors are the same. They all have different goals. Maybe three of them want to get big, but all three of them have a separate process on how they're doing that. So that's really where we begin. You know, what is your process? Are you always closing in a second meeting or do you say you're always closing at a second meeting? Those very fine details matter and they come into play with data. So we start there with them. The organization piece again is very, very simplified. So we give them dashboards. One, we make sure it's clean, which I'll talk about later. Clean data is the most fundamental of all of this. And then we can give them some visualizations, but then we talk through, is ROI a big deal for some offices it's not, because sometimes it can be low if we're in growth mode. So then we can establish, all right, your ROI may not be out of the park, but it's going to be healthy enough to sustain growth right now. Or for smaller offices who are just doing a couple of marketing funnels, referrals, maybe dinner seminars, they want a high roi. They're mostly doing referrals. And so that's our goal for them. So it is establishing, what do you want to do, where are you trying to go, and are we getting there in the correct way? And then once we can see the data, the choice is up to them. You know, there's a saying now that it's, know your numbers, know your numbers. I would fight a little bit on that. And I would say, understand your numbers. Right. We can know our stick rate is whatever it is, but if we don't know why it is that way, we can't move. And so we're trying to just teach them how to move and make those decisions, feel super confident in it.

That's. I think that's part of it. Right. Sometimes you can get frozen as a business owner of like, not making a choice or decision, not knowing. So that's so much of it. I think, giving them the confidence to make those choices, let's maybe dive in at a foundational level. You've talked about that, but, like, what are the key metrics that you are trying to track that you think have the biggest impact on an advisor's business? Like, hey, here's the four to six things that we really are going to be looking at, at least at that foundational level. Like you said, each one may be a little bit different, but these are the, you know, kind of the core ones that are going to be really important.

Yeah. So we call this the track that advisor top five. And for anyone beginning, we will look at these five items. So the first one is stick rate. And what that means is of the people who schedule a first meeting and get on your calendar, what percentage keep that first appointment? The second one is close rate. So of all the people who sat with you through a first meeting, what percent of them become a client at some point later down the road? And those two are pretty common. Most people are looking at those.

Yep.

The other three, a lot of people don't look at. And they all play a role and they all feed off of each other. So number three is Average case size per household. What are we writing from a household standpoint for this? These people. Because you can have a lot less leads if we're writing a million dollar. Average case size, cost per client. Acquisition cost is number four. You could break it into cost per set appointment. We do both. But if we're going to keep it simple, we just would do cost per client. How much are we paying to close these leads? And then lastly would be pending leads or open opportunities, depending on verbiage of the office. How many people in a certain given time or in a certain period are actually working their way through the sales cycle right now? Not just dead leads that you think you might get at some point. So those would be the top five.

And I said this would be specific to advisors, but like going back to that almost any business that's trying to bring in new clients, those are pretty important things to be measuring. Is there a metric that you look at that you found helpful that you've seen? Like a lot of advisors haven't been looking at or have chosen to ignore so many.

But one that we started studying last year really specifically because we were having issues with dinner seminars, specifically was the number of people who say they want an appointment at the end of a dinner seminar or an educational event versus the number that actually get on your calendar. So these advisors will go in, they'll do their presentation. You know, they have their marketing person there and they tell them they booked 50% of the room and tomorrow rolls around and they go to call to confirm or do whatever they're going to do with these appointments and we have an additional 30% fall off. The advisor is not aware of that. They walked out of the room last night thinking they had a 50% conversion and they don't. And it's awful because then I to get on the call with them and do coaching and say we're really struggling to get leads. And they combat me and say no, no, no. At the end of every night I get a text or whatever it is. So that is one that we are really focusing on this year and encouraging a lot of advisors to look at is truthfully how we got on the calendar. Not just said yes or circled yes or whatever that is. So that's a big one.

Yep. I could see that. Because I, I do think I hear that a lot. Right. You probably see it more than I do. But we both hear advisors say, like, I convert 80%. When you actually look, it's like, no, it's like closer to 20.

Yeah.

So balancing that, how so as you're looking at data with an advisor, how I'm trying to figure out how to ask this exactly. How do you help them understand, like if there's a problem there and then what would you do to go about like, okay, how do we address this problem? Does that make sense? I guess in the way I asked it, yeah.

And that's a good question because it, it, it will speak to how we're manipulating or looking at data. And that's a question a lot of people have. So again, simple is better with data. So we will always start very, very simple. And we will go through stick rates and close rates all through in average days. Well, maybe we'll look at roi. So I will be looking at a, from a process problem standpoint, if we see the same problem in one area and it's across the board. So let's say it is converting to a second meeting and it is the same problem for every single type of lead and every single advisor that they have in their office. This is a process problem. This is not an isolated incident with one advisor who can't do it or one demographic of people that we can't move to second meeting. This is a problem, process problem. So then we have to address that and then we can go into, we call it digging. So we dig. So we'll start with kind of the very high level. And then I, before the call, I'm digging and I'm saying, okay, what is going on here? You know, is it, is it the appointment setter's problem? Is it a scripting problem? You know, are we setting it and then they're not keeping it? Were they not qualified? So then we kind of go down these rabbit holes and that's what we tell of a lot of our advisors is think of it really high level. And we're going to just keep digging, digging until we can figure out exactly what's going on. So if it's again one issue for everyone and everybody that is a process problem and they can see that very quickly. When we point that out and we talk through that, it becomes a different story. When it's radio people only or educational event people only that we can't do, then we've got another conversation and we, we need to change that sales cycle maybe a little bit for them. The wording, the communication in the meetings and the hardest conversations is when it's one advisor that's isolated and I get to call them in and ask some, play dumb and ask questions. But it's important and that's how we're figuring out how. How it's a problem, where it's a problem. One thing that can happen is cyclical issues, right? So throughout the year, there are trends that we do see. Sometimes they are a reason I want to be kind here in diplomatic, but sometimes the advisors use them as an excuse, right? Like every June we just slow down. Every summer it slows. And I have to fight against that a little bit because I say, well, it's because every summer you stop doing seminars. I mean, so like data speaking, this is why that's happening. It doesn't have to. And also for the advisors who care enough about their data to understand it, they. They recognize that this June is not last June. We have different staff, we have different platform that we're on. We're using a different, different marketing funnels. So we, we can't blame it on cyclical trends. There are them and we, when we do look at them. But I am very careful to just throw that all under the, hey, this is just an annual thing that happens because there's just enough moving parts in the data consistently, if that makes sense.

It does. One powerful, powerful thing there I want to make sure everyone picks up on in this. Especially if you're an advisor who has other. That say, lead advisors in the office. Right. That idea of. But it could apply to appointment setters, a bunch of different roles. That idea of understanding if you have a process problem or if you have a people problem is one of the biggest ones that I see advisors not really do well. Maybe it's the right way to say it. And this is the one where it's hard to do well without really good data. And so I think that's one of those values you provide is like if you don't understand where your problem is, that's a really, really tough one to fix. And being able to benchmark your advisors against each other. Although I will say I think people who are in sales roles, I think competition's a good thing, right. And I think them being able to see that's important because I do think it drives activity and performance. But like understanding where that problem lies, processor people is such a huge part because I've seen so many people. I'll say probably what I've seen more with advisors is they have a people problem, but they try and address it from a process problem is what I probably see most often because how would I say this? It's easier to address a process problem than it is to actually address a thing, person or people problems. So do you do you see that? Maybe this is a way of me asking, like, where do you tend to see those problems more? And then do you have any suggestions for advisors on how to go about. Let's go to the second one, the people side of it. How can they use the data to help address the people problem to where it doesn't feel like they're attacking the person. It's more of a coaching opportunity.

Again, this is my favorite part about data, because let's talk about the people part. They're going to shine somewhere when we use data storytelling, data stories, and I'll talk about those in a minute. There's going to be places where they're really high and where they perform really well. And so we can lead with that, right? We did a coaching call. There was an advisor they're having problems with. He's not bringing in the amount of money that they wanted him to. They're ready to can him. And I'm sitting here looking at his data saying he is the strongest closer of their firm once they get the people to a second meeting. But he's so intense in the first that he's losing everybody. So he doesn't have the opportunity to close as much business because he's losing everybody. So we can go into that conversation and say, hey, look, we're actually going to have you have a conversation with all of the other advisors and train them how to close and come in and get the deal because you are so strong there. The problem is you're losing so many that you've lost all your opportunity between the first and second to even hit your production goals. So when I come in and that's the other thing, people bring me in and then I can just have a conversation because I don't have boots on the ground there. But I can ask questions like that and I can say, hey, I'm told your process is this. Talk to me about how you're doing that in your first meeting. Because what it looks like is something is awry here or. Or your qualification standards are different than everybody else's and why is that? And we can give them the opportunity to say, maybe they're seeing a lot of smart asset leads and they're not qualified. But I've also done my homework and I've dug to see. Excuse me, I've dug to see, you know, you're not seeing more smart asset leads than anybody else. So we can't use that. And so that's helpful in those conversations to give them a positive before we kind of have that harder conversation. But that's usually how I do it.

Yeah, it's probably the conversation I tend to have with advisors the most is because I tend to talk to some of the ones that are building, scaling more and going through some of those challenges as they add people. And that's what I said. I'm like, if you can make it more about the numbers and less about the person, I think turning it into this coaching opportunity, if you want the best for them. The other neat thing with good data is you can show them like, hey, use your example. If we can improve your first appointment to second appointment ratio by 20%, here's what it means to you in the long run. Here's what it does to your earning potential, the amount of families we're going to be able to help and support. So it's just such an easier way to, I guess, have those conversations that sometimes can be tough conversations, but also narrow in on like, where's the problem really at? So talk about the concept of data stories then. I know you said you're going to hit it, so we'll just jump to that.

Okay. And that's essentially what we do with all of it. The prospect story is what we're most known for. So I'm going to get psychological on you again. But from our human condition, we can recall about five to seven stats or, or things or objects. I don't know if you've ever done any of those things where they put, you know, 10 items in front of you. How many can you name? We can name five to seven, but we are 22 times more likely to remember things and more details when they're told in a story form. So like psychology speaking, if we can wrap stats and facts in a story for these advisors, their neurons are just strengthening so that it makes a lot more sense. They can retain it a lot more. And again, now they're equipped to make decisions moving forward. So this is why the stories matter. You can look at a dashboard all day or you can look at a graph and that's fine. But that's step one. If there is not a story being woven through all of that, you will probably forget it and it won't sit well or resonate with you. And we can't make decisions based on that. So the stories are where we come in and we are linking the entire sales process for the advisor and then we are overlaying it with benchmarks. We're overlaying it with. If we're looking at all the advisors, like all of the Advisors are on there so we can see who's doing well, who's not. Or we can look at it by marketing funnel, so we can look at referrals, are doing, radio, is doing, seminars, are doing overlaid over benchmark. So all the points that we're looking at is similar to what I told you on the top five, but the prospect stories, just the sales process. So stick rate for first meeting, what percent convert and set a second meeting. So how many get on the calendar from there and then how many keep the second meeting. So stick rate for second meeting. And then we give them two close rates. The first one is that kept first to client, which we talked about earlier, of everyone who sits in a first, what percentage end up closing? And then we give them their close close rate. So from your second meeting, how many people did you actually close when you offered the clothes? Some people are on a third. Like if that's part of their process, we'll measure the kept third to client. But that one matters too, because once we get them all the way there and we've done all that investment, are we losing them right then, did we not prep them well enough? So we plot that all in a graph. We put our benchmarks on there so they know what's normal, what's not, and then we tell the story of what's going on. And they will retain 20 to 25 data points right there because it's all woven together. So I'm very passionate about that.

You know, I mentioned this earlier that, that I tell advisors I feel the value you provide. I mean, you're graded to sheets, right? So we don't want to take that reputation away from you. I think part of it is you get the chance to work with so many advisors, helping them make these, you know, course corrections and figure out that you're able to use some of that collective wisdom of like, hey, here's what's working for other advisors, here's what we're doing. How, how much of that do you see is like some consistent patterns of like, hey, here I don't. We can make up one. Let's say it's. They're having a problem with the first appointment stick ratio. Like, how often do you see, like, the solutions are maybe somewhat universal. Like other advisors have done these few things and this is helping. And how are you able to coach around that?

Good question. And it's so fun having done this so long because now I have those things just right at the front of my mind because I've seen them work and We've had these discussions before. It was kind of like let me go hunt that down and see who changed that. But yeah, for each point in, in the prospect story there's one or two solutions that we find consistently will fix it. Let's sick rate for an example. The sick rate is not a sales process problem, right? This is before the advisor even sits with them. So one, this is not an advisor problem. This is more the front end, the marketing side. And we have to go into scripting. Is there something with the scripting? Are people, are we letting people cancel too easily? Is there some training that we need to do there? Another thing that we need to look out, there is days between when they called and when we can get them in. Is this, this, you know, potentially could be an issue of we are too busy or again we are not training up the appointment setters well enough to just say hey, I have this date or I have this date. Which one works instead? They're, you know, the, the prospect's like it'll work in three weeks and we get them in in three weeks and then they don't stick. So those are two just for the stick rate that we, that we see a lot of as it, as being an issue. Sometimes it's just lead count, right. Like there's so many leads coming in that we to have kind of a lower stick rate. You can't really but they feel like they can because there's so many leads coming in and so that sometimes we'll implement like a discovery call or an intro call that's a 15 minute call prior to a first appointment. There's a lot, you know, there's a lot of recipes and ingredients that we can throw in there to them. But I would say those are top three first to create specifically that we'll throw out to people.

That's good and that's what I, that's why I say to advisors like I feel your value is in that. Like let's understand the data, then let's figure out what we have to do to go fix it. And you get the chance to do that with a lot of people and get that the reps in there. Let's talk about another big topic. This is probably, well I would guess this is the one advisors tend to be most interested in out of the get go with your background as a marketing director. But that is the marketing funnel. So how are we tracking where our leads are coming from? The different marketing things that we're working. And you know, candidly, you know one of the Things we talk a lot about is just, and I know you do really well for advisors is what is your ROI on those different funnels? But I want to ask you a few questions around that. So just the idea of marketing one, how do you recommend advisors go about tackling if they have. You know, I think one of the things you've seen here is like we're huge proponents of you should have a lot of marketing funnels going that all kind of compound and work well together. So like I say, if you're on TV and radio and doing digital, you should be doing live events, you should be having referrals. How do you recommend like tracking like where that lead came from, especially if they do have a lot of different funnels out there. I'll start that have a few marketing funnel questions, but I'll start with that. One.

Great question is probably our number one question that we get. So I love answering this. For mass groups of people, there's two ways to do it. If you have a succinct method and process that you're using. So we have some people who, they lead everyone from TV into an educational event or everyone from radio goes into this certain funnel of events. They don't let them schedule an appointment. If that's the case, we actually do two sets of data for them. So there's a primary source knowing that a lot of these people came from radio, but. But they came into our office from the educational event. So we would call it a primary source and we would call it an appointment source. So there's two that does not work if it's all over the map. So there's very few people who have that as a specific written down process. For most people, it's like what you mentioned. We just have 15 things going on and they've told us they've heard seen us on tv, but they've also told us radio. But then they came to our event. What we tell people, and we have to have best practices because we get asked this all the time, is mark them down as the thing that made them set the appointment this time. Yep, that's the best thing that you can do because they are not coming in to you. Yes, they may have heard of you on the radio three years ago, but they're not coming in now because they heard you on the radio. They're coming in now because they just went to the event last night and it was just time, it was time for them to retire or whatever it is. So we tell people based on whatever drove them to the appointment today. That should be their marketing funnel and.

That'S where we draw the good way to track it. I've never asked you this question and it just kind of popped in as we were talking through that. Have you seen any correlation between the more marketing funnels that you have going and a higher maybe return on investment on those funnels, a higher conversion? Like, is there any proof that shows that the more marketing funnels you have going, the better you're going to do? I guess is a simple way to ask that.

It's a great question and we're going to find out. I'm in the middle of a white paper study right now on our clients looking at what their marketing ROI did prior to radio and TV and then four years of doing radio and tv. So what has your marketing and specifically seminar ROI done after adding tv, after adding radio, year over year over year? So I'm hopefully actually wrapping that up next week. So I don't know yet. I do personally do personally from just my mind's eye of doing coaching one, there's growth easy. I mean the more, the more they're on, the more they're spending. It just forces them to grow. So I can say that without a doubt. And we'll measure that in there as well. The ROI is going to fluctuate the first few years we spent and particularly on tv. It's expensive and they may not have a positive roi, but that's no reason to worry. And I want to put that out there to people. There should not be an expectation to make money specifically on tv, even in a marketing situation for two years. So just we see that over and over because it will eventually build and they will all work in tandem and then our marketing ROI will be fine. So I will let you know more on that. But I do think having all of it wrapped in together, it gets a little volatile for a second and then it evens itself out. But regardless, all of those practices grow. All of them.

One of the other marketing funnel questions. So you heard us say this before too, I'm sure. But one of the things I see is advisors may go from, let's say live events being their primary marketing funnel, which is they're spending an hour with someone building that relationship. And then when they come here, they may add tv, they may add radio, digital, and those leads are just so much colder. Right. It's not someone who spent an hour with them in person yet a lot of times they'll try and process that lead in the exact same way. Anything you've seen in the data on like how they should be addressing or handling those maybe maybe differently or things that can speed that process up some.

Yes, anytime we start any sort of new marketing funnel, we want to take all of our preconceived notions of what a lead does and throw it out the window. That's step one. So do not have an assumption about them. Digital. Digital are great. They can pull great roi. But you have to sift through three times the amount of leads to get that ROI and for it to be worth your time. It works. I'm not not anti it but we have to have the correct expectation of that radio. I'm a huge proponent of radio. It is not going to have immediate results like a dinner seminar where you get their hands raised and they sign up on the blue sheet. That's not radio and tv. But what we're seeing with radio particularly because people are now in it longer. The radio leads are not as, not as many. The volume is not as high as it used to be. But the close rate has skyrocketed so they're acting like referrals now. So the longer you're on radio you get these long term listeners and they just listen every Saturday or they hear your spots and it's over and over and it's repetition and by the time they're ready they're in and they are closing at an extremely high rate. So that may not happen immediately. When you get on radio maybe you get some one time calls and we struggle with close rate but over time I just see it over and over again as they become long term listeners and then they start acting like a referral which is fabulous from a ROI standpoint.

That's good. You published a special aggregate study from 23 that really looked at just all the data across all the advisors. And I think one of the things you talked about in there was just the percentage of business that was generated by existing clients and referrals. And and sometimes I say that's maybe the COVID blessing as advisors realize how many diamonds were that they were standing on top of or diamonds under their feet there. But would you just talk through kind of what that showed and just where the opportunity really is there.

Covid certainly turned a corner there and last year as well, I mean last year there were a lot of kind of replacements and refinancing going on. But regardless, typically we want to see 30 to 40% of a company's business coming from referrals and existing clients. And I tell people a lot of times that is that's kind of the bare bones, like we should be getting 30 to 40% and some offices are not. And so to them, I want to encourage you, getting referrals and doing existing client business is going to pay the tab for all of your other marketing efforts. So if we, if we're not focusing on that, we, we're going to be so concerned with chasing that marketing ROI of all that money. But we've got these secret sauce things that are just going to pay for that, so don't let that slip your mind. But in 2023, 61% of business came from existing clients and referrals, so it nearly doubled what we had always seen. And the point I wanted to bring out to that was everyone is always so concerned about their marketing dollar and they, you know, their ROI and all of that. And, and that only represented 40% of the business, like 39% of the business that was brought in. Right. That's, that's wild to me. I don't know if it'll look that way this year, but I had to point that out to the nation because it was pretty cool to see people digging in and doing their due diligence on their current book of business and then referrals as well.

And not that we don't see it. Right. I think specifically advisors with us are pretty good at it, but, but I think the big takeaway for me is like, if you're not devoting, I don't know if inordinate amount of time is the right way to say it, but a large amount of your time to your client experience, how you're servicing, communicating with clients, but then also the processes around getting referrals and going back to your existing clients to make sure that situations haven't changed. We talk a lot about the annual review process, all of those things. I think a lot of times are taken for granted and advisors focus so much on like spending money on new, you know, client acquisition or new lead generation. When the reality is like, man, you should be spending more time back here because one, the ROI is incredible, you know, but, but it's also the, it's the easiest way to generate new business or new revenue also.

It is. And I love when that catches fire and they start seeing that too. And I love being able to have that as a resource to tell them this is what people are doing. So hop on it.

The other thing I've seen, I'm sure you probably see it somewhat in the data, but depends on, part of the challenge is kind of depends on when A client would onboard with you and those things. But what advisors are starting to realize too, which is really neat to watch, is it's, it's crazy. I would never tell an advisor, stop marketing, but is their, their business gets bigger and grows. Like a higher percentage comes from referrals in their existing client base. So it's almost like the opposite. It's like the bigger you get, almost the less you have to market because so much of that, you know, as your book grows and which is natural. But I just don't think advisors think about that as like, man, I say this all the time. Like your business is just going to keep getting easier, right? Because it's your amount of clients and your amount of networks grow. Like the business is going to get easier because of that existing client and referral activity too.

Totally. And that recurring revenue and, and that goes to as well. Knowing their data, right? If they know that that's what's coming in, even from a book standpoint, which we haven't even talked about. But if they know that that's what's coming in, they can plan for that and be super secure and not feel like they're missing out. Like, FOMO is very real for a lot of these advisors and they feel like they won't grow or they won't get to that point unless they're like that guy or that girl up on stage. And that's not fair to them. And so again, for them to understand that and know that and truly get the full picture, then they're not afraid. And then they can say, okay, yeah, maybe we don't need to do that funnel over there, or maybe we need to do five over there because this is my goal. So it'll get them there eventually. They just got to dive in.

You just said something. I'm not sure how to even ask this, but, you know, I think a quote we use a lot here is comparison is the thief of joy. And you know, one of the things I tell advisors is I'm really fortunate and I get this seat to watch where an advisor was at when they joined us to where they're at today. Many of them just get to see where they're at today, right? They don't see the 10 years and all the work and all the struggles that they went through to grow to where it is today. But have you been able to use the data to help advisors maybe get out of that comparison game a little and just focus more on like, no, here's where you're doing really well and just Focus on the successes, because that can be a challenge a lot of times. So just, I don't know, you said something that made me think that, you know, seeing the person on stage, but. And some of that could be just, you know, not chasing the shiny object, also making smart decisions, but just. Any thoughts there at all?

Yeah, we hear all the time. Right. You all will have a very big event. And then we get a lot of calls of, oh, I want this dashboard. And so. And so looks at this and does all these things and we have to sit here and we will say, yes, I'm not going to be a no person. However, I do push back and I do say, well, hold on, they're doing this much production. These are all their marketing funnels. This is why that probably matters to them. But you're doing these and this is your staff and this is your volume. So this is why these matter to you. And so just reframing that to them. Going, going back to the commentator on the football, you know, Right. They're not giving us all the stats of every player on the team, right. Where they're just going back to recap and say, this is what's happening right now in front of you. This is what matters. So sometimes I have to. It's not mean. It's just in a kind way, like refocus them to say, that is great and you can aim for that, but you will never be that. Like, you're not trying to be them, you're trying to be you bigger or you with a better roi. And you doing that is not going to look like them. And so we do have to reroute them sometimes. And sometimes it's the shiny ideas. We'll have people come back and say, I'm just, you know, I'm not getting enough leads. I need to spend more money. And I look at their stuff and their cost for appointment is just fine. And it's under benchmark. And I can sit here and say, no, that's. That's not it. We don't need to go spend more money. We need to focus on the leads you currently have and why we're not closing them. And they also know I have their back. That's what's cool is I am for them. I'm. That's all I'm for. I'm for their vision and I don't have anything to gain by telling them. Whichever type of advice I tell them, it's more of, you told me this is your goal, but we're trying to get there. So we gotta refocus. So I know I went on a roundabout way there, but yeah, we have those conversations a lot, particularly after large events.

Well, and I think one thing that has helped, and this is where I think you've been a huge value add to the advisor too, is like they, you know, we, I think one of the things coming out of COVID that we were able to do is really look at all our advisors and realize that they fall into one of three categories. You know, it's not, not everyone's trying to be this CEO and build this massive organization and we call it optimized scale CEO. You know, it's like the three types of businesses. But where I saw so much of that happen is they would try, you know, if they're an optimized advisor, which we would say is like, I don't know if lifestyle practice is even the right way to describe it, but you love meeting with clients and that's what you want to do. And you want to build a small, efficient team and optimize everything to maximize profitability. But then they'll compare their numbers to someone who's like a CEO and just the comparison doesn't work. That's what I also appreciate you've been able to help them see. Well, let's actually look at other advisors who are building a business model like yours, and this is the type of business you want to build. So let's not worry about what someone who's got 20 advisors under them and is in six cities is doing. Let's focus more on the type of business you're trying to build.

Yeah, it's different.

I don't know if there were same question there, but it's just, I think the value that you can provide. So. Okay, I want to ask some little different question. And again, probably going back to what I said earlier, I get the benefit of seeing where someone started and to see their growth over this time. So. So I remember when you left Colorado, moved to Arizona and started this and to see what it's grown into today. So as you have grown and scaled your business, what have been some of the biggest challenges for you as you've tried to grow and scale?

Yes. So again, with data, it's complex and it's a lot. And anything that is complex that looks simple, I mean, anyone knows this, it's because there's been thousands of hours poured into it. And so for us, we had to figure out how to make it as simple as possible for these teams who don't really want to look at Data and make it appealing to them. And the scaling part is interesting because I am not a strong, hungry entrepreneur by nature. I love order, I love process, I love the data. And so the scaling aspect has been scary for us, but great because we brought people on our team to help grow our practice to allow me to continue to do what I'm really passionate about, and that is taking something that's very chaotic and making it simple. So the scaling part has been awesome because it's been referral only. And we're doing really good work. We're doing excellent work. As much as I want to be a perfect company who never makes a mistake with data that isn't real life, but we are excellent and we are excellent in what we do, and we're the only people really doing it. So that's been our trump card because no one else wants to do this. But it's worked and it's grown and we have seen huge success and we've been able to help people start understanding the beauty that can come from the data once they're willing and vulnerable enough to dig into it.

I think being able to watch your journey and growth is really neat to see. You found this niche and then have exploited it's not the right way, but just really taken advantage of. There was this need in the marketplace that really wasn't there that you can go fill and have done it. I think also, as you said, with excellence. Where there was that stretch where I think one of your biggest challenges was trying to onboard new advisors because you had so many calling for a long, long time. How do you manage that? Like, the business started growing quickly and I'm going to ask you two questions. So they're both maybe around hiring and staffing. So how did you try and navigate that? Like, I want to take advantage of this opportunity of all the advisors that are calling, but we also have to do things with excellence and balance that. I'll start with that one, then I'll ask you a second staffing question.

Yeah. The onboarding stage used to take a long time, and it's because we were trying to teach them everything at once and have them eat the whole elephant. And I realized very quickly that's not going to work. We also realized we have to segregate it, right? There's. There's an aspect for the advisor that's important. There's an aspect for the team that's important. So we have dissected it a little bit and said, my team works with your team. They onboard your team, they help Them understand just the day to day support data entry part. But I work with the advisor so I'm not even part of that conversation. I work with the advisor and say this is what's important. These are the, the dashboards and the visuals and the stories that you really need to be focusing on. So by separating that out, it wasn't all of us trying to help all of them. It was much more streamlined to great. Your support staff needs to stay what they're doing. They need to own that process. They need to feel comfortable with that. We are their advocate there, but then I'm an advocate on this side. So that's how we were able to split it up a little bit and get teams onboarded very quick. It's a very, very quick onboard process because they need it and they need it yesterday.

It's been neat to see how it's evolved. So the other staffing, and this is an interesting. I introduced you at the beginning as the owner and founder of Track, that advisor. I think very often the owner or founder also has the role of CEO, which you don't have. Molly's actually the CEO of Track, that advisor. So we've talked before and we're talking even before of knowing what the things you're best at are and then. And you know, trying to put the right people around you, which you've done really well. But maybe just talk like to that, like what went into that decision of you not being the CEO, how that came to be.

Yeah, I, it was around 2019. Molly had been with us for a while and I just, I'm a perfectionist by nature and get into the weeds by nature and it makes me really good at what I do. But one of my huge weaknesses is that I, I don't want to make a mistake. So I don't dream very big and I am slow to move. I'm kind of the no person a little bit. And we were just realizing it was thwarting our growth. You know, I was so afraid of stuff and I just wanted to do the data storytelling and I didn't like the big dreams. And here I had Molly, who is so that, I mean, just entrepreneur by nature, loves the dreaming. She's, you know, she, she's got the big visions and she'd run 500 miles an hour if we let her. And we'd worked long enough together that I came to a point where I was like, hey, I am so struggling. I hate owning this company. To be candid. I was at a really low, low place and I Don't remember him. Yeah, I wasn't vocal about it, and. And I said I have to fill the gaps. I have to figure out my weakness and how do we fill that and that. And that was Molly. And she has been an incredible blend for me. So we work so closely as a team. I'm still the owner and I'm still the founder, but I get to do what I love to do and what I really feel like we are called to do. But she is out there, you know, running 500 miles an hour and doing the EOS stuff and doing all the things that I just is not my jam. And I will participate in it because that is required of me, but I know it's not my strong suit. So that is how she's come to be in that role.

It's the reason I wanted you to share it. You know, I say even here at Advisors Excel, when we started, there were three of us who were able to divide, and little did we know we had some very complementary, like, skill sets. And now with it just being Dave and I, we have very complimentary skill sets that allows both of us to probably do the things we're good at, but then, you know, it's the other person's kind of good at the things one of us doesn't like so much. I've watched it, you know, as Molly stepped into that role. And I just think for any business owner that's listening, right, Whether it's someone you're bringing in at the CEO level, partner level, or just being very thoughtful about surrounding yourself with people that are good at things that you're not good at, and then empowering them to go do those. What it does to the business is just spectacular. I think so many times if you're the founder, the owner, you feel like you do have to hold on to so many of those things. But what really grows and scales the organization is like spending your time on what you're great at and then going and finding people that can, you know, do the things either you don't like to do or that you may not be that. That gifted in also.

Yeah, we, as in our entire team, they're. They're amazing. It's because we're very strategic. We don't just hire randomly. It is very much, you know, what does Molly not want to do that I don't want to do? And it's the court, the support side, right. Dealing. Dealing with staff and all that. And we have an incredible team that are just amazing. And I'm so thankful because I wouldn't be here and Track Advisor wouldn't be here if we hadn't made those decisions and moved that direction to get me to where I'm functioning, like, in what I was born to do. So it's really, really cool.

Okay, I've had you on a long time. Let's hit these lightning round questions at the end. You've probably heard them before, so they can be short answers, but the first one is starting with COVID and just. Just. It made people reevaluate things. Is there a lesson you took away from that time that you feel like you're going to carry forward for the rest of your life?

Yes. Keep it simple. I. In around that time was when we made all these shifts and I said, what are the top four things I have to do every day? And that's it. That's. I mean, every single day, it's God, my family, running and work. Like, if I can just do those four things and spend time on those four things, I'm going to be so healthy and focus on what's right in front of me. So we've been. We do that with Track, that Advisor, keep it simple, too. We don't overcomplicate things, but that's. That goes for both personal and work.

That's good. Okay, second question. What is the one thing that you've done that you feel took you or helped you graduate from being a good leader, entrepreneur to great delegate?

We just talked about it, but I would not be in this position, we wouldn't be thriving like we are if I hadn't delegated and got the right people in the right seats. So that's been huge for us.

How. And not that I asked this earlier, you know, we went through that journey ourselves and over the last 20 years, and it's probably the hardest thing to do as a, you know, a founder, entrepreneur, but it's also the most freeing and the thing that is going to drive it. How did you navigate that? Like, was it difficult for you, or did you reach a point where you were just so frustrated that it made it easy? Any just words of wisdom there?

Yeah, I was so frustrated that it made part of it easy now that I'm in a healthier spot. That's actually what we have to navigate, is me getting my fingers back in there sometimes. And, you know, Molly has to have a hard conversation with a client, and I'm like, well, maybe you should say it. Like, you know, And I start getting in there and she's like, erica, you overthink everything. So just let me handle this. And then so that now is where we have to do that dance. And I really do need to kind of keep my side of the story street clear because I need to let her run and do her job now that I'm not so exhausted when we made that decision. So it's more about the long term benefits of it and knowing if I can continue to stay out, we will be better for that.

What I think you've done so well. And I try and tell advisors this all the time because as they do hire and delegate, sometimes they're not sure where to spend their time. Right. They're so used to doing things that once they're not doing those, they, they tend to jump back in and mess things up because they're bored. And I'm like, don't let your boredom from not doing what you're used to do. You have to figure out how do you refocus that energy into things that can really add value that only you can do. So I think that's great. Okay, third question. Is there something you're doing this year to drive your own personal growth and development you're excited about? Yes.

It's not business related, but I am attempting to run a 50k which is 36 miles in October. So we'll see if I get there. I don't know when this is gonna air, but that's a, that's a goal. And, and I have so much of my best ideas and best business thoughts while running. And so to me already I feel like there's been so much helpfulness coming from training for this, but I've never done anything that far. I've done a couple marathons and 36 miles feels pretty daunting, but I really wanna tackle it this year.

You'll get it as much as you run. We'll talk about how people can follow you and they'll see your running escapades on there. Yes, there's always something. Fourth question, can be your own book, as you know, but what is the one book you've probably recommended most to other entrepreneurs or business owners?

Yeah, good question. So this one is much more in our niche, but I think it's a great book for people who are wanting to understand data storytelling and just what it is and how they can better themselves at it. It's called Effective Data Storytelling. It's by Brent Dykes, D Y K E. And it's all about how to understand data and how to get it in good visualization format and how to create the story from it. And I know that that's a little bit more niche specific, but I bet your audience has probably never heard of it. And I think it's a great book for them if they want to dive into helping themselves. Start understanding data.

Excellent recommendation. Okay, final question. What's the best piece of advice you've ever received?

Received this one. I had to sit on this one for a minute. But I do think the best one is everybody talks, but be the one that gets it done. And I'm just, I'm not a boisterous, life of the party, like in a crowd type of person, but I am authentic and I do what I say I'm going to do. And I think that has served me very well, particularly in a world where there's a lot of shouting and a lot of noise and a lot of people claiming things. We have a saying in our office of over promise or under promise and over deliver. And that's what we want to do. I feel like I can just kind of be trudging along and continue to get stuff done while there's lots of people making lots of promises, but we don't have to be loud about it. And you can still be an amazing company and provide excellence without shouting it from the rooftops. So that's kind of our mantra.

That's great. I love that. What I also love, it's funny is you have helped our advisors sift through some of that noise. You know, we joke a lot about all these marketing experts that have come out of the woodwork since COVID you know, and promise big results and you're actually able to show them if that happens or not. So I appreciate that too. Well, Erica, thank you for the time today. It's been fun to see your journey back over the past from a long time ago, decade plus. Yeah. So I know we hit on your book. How are other ways for people to follow along? Stay stay in touch with you or get in touch with you?

Yeah. So you can find me on LinkedIn. It's just Erica Pauly and if anything that I said, you know, resonates with you or you have questions, you can email hellorack that advisor.com we have a ton of resources for people who aren't clients, but we want to be a resource for the community. So I post a lot on LinkedIn. I might be have another book come out here next year and I would try to just continue to put out stuff for people to learn a little bit more. But yeah, LinkedIn is the best place. Any questions they can email hellorackthatadvisor.com awesome.

And I know a lot of people listen are already using you and are huge fans, but I know a lot are going to have their eyes open today just on how data can help them make such important and wise decisions about the business that I think it's a really important thing. So appreciate you taking the time.

Thank you so much for having me. It's a pleasure to be here.