CTA’s often struggle to create promotional materials. They’d rather just trade. This episode explains why fancy tear sheets and pitch books are unnecessary. We also discuss common problems that render most CTA promotional materials ineffective, and when to put promotional material to work in your business.
Welcome to The Profitable CTA, the only podcast that helps commodity trading advisors grow their businesses and boost their bottom lines. I’m Kelly Hollingsworth and I’m very glad you’re here because CTA profitability is suffering, and in this show we talk about how to fix that.
In every episode, we discuss a common problem that undermines CTA profitability, and the problem for today is too much information that you’re delivering to your customers in the form of promotional material.
I’m thinking about this problem today because I’ve been reviewing a whole bunch of CTA promotional material–pitch books, tear sheets, websites, and I have to tell you guys: I get paid to read this stuff, and I love the CTA business, and I’m still finding it a tough slog to get through. So the question for today is, if I’m feeling this way, what are the chances that your prospective customers, who don’t love you nearly as much as I do, and who are not getting paid, are going to take the time to go through all the stuff that you’re sending to them?
I’m going to guess that the chance is pretty slim. So the first thing I want you to notice about CTA promotional material is that for the most part, no one is reading it. You are spending your time writing it, and you’re paying for graphic design and legal review, maybe even some printing, but the truth is that promotional material is like a resume. You get a few seconds of someone’s attention, if you’re lucky, and that’s it. So what can we glean from this?
The most profitable CTAs use the least amount of promotional material
The most important thing I can tell you about CTA promotional material is that less is more. My most profitable clients use a track record: one page showing their monthly returns. No performance statistics. No bells and whistles. No charts and graphs. Just the monthly returns, with the annual and year-to-date returns at the bottom, and maybe their AUM, and that’s it.
Why does this work? One reason is because people buy when they get absorbed in a story, and a track record tells a story that everyone can understand—the folks who are in this trading program have made money. That is a story that describes a destination–a place that everyone would like to go.
The other reason that there’s an inverse relationship between the amount of time a CTA spends on promotional material, and the CTA’s assets under management, is that the more time CTAs spend worrying about pitch books, the less time they spend focusing on their trading performance. A distracted CTA is a dead CTA, so please allow me to promise you that if you want to pitch your pitch book project right out the window, go ahead. You’ll be in good company, and very profitable company, if you do.
But, if you feel that this is incomplete, if you feel that you need to have a wardrobe of some promotional materials to wear when you go out into the world and try to find customers, here’s what I have to offer you to make them more effective.
Effective Promotional Material is Distilled to the Essential Message
The global advice here is that if you’re going to use promotional materials, distill it down to the essentials. I say this because lately I’ve been seeing 80-page pitch books. The typically CTA tear sheet is actually tear sheets. A one-pager is now four or five pages. Why is this happening? Too many reasons to count, but today I’ll discuss three.
Promotional Problem #1: Stating the Obvious
The first is that many promotional materials take up way too much space stating the obvious. Here are a couple of examples:
- “We trade for institutions and high-net worth individuals.”
This is a very common statement in promotional material, and the question to ask here is, who else is there? Low-net worth individuals? They’re not your audience. Just as Cartier and Tiffany don’t put in their ads, “Listen, we only work with rich people,” you don’t need to state that you don’t work with people who can’t afford to work with you. That’s something everyone already knows. There’s no reason to put it in your promotional material
- Our program commenced trading on x date.
Another “stating the obvious” problem that I commonly see is “our program commenced on x date.” If you have a track record is included in your tear sheet, there’s no reason to tell people the date when the track record commences. There are certain times and places where that fact is required by regulation, but it’s not required in your promotional material, and you don’t need to put it in there, because your customers can see by when you track record starts by looking at your rates of return. You don’t have to tell them the date.
- You passed the Series 3 exam.
Another fact that states the obvious is that you passed the Series 3 exam. The Series 3 exam is not a credential. It’s the bare minimum to get into this business in a registered capacity, and if you’re operating a registered CTA, it goes without saying that you’ve taken the exam, or met an equivalency of the exam. Not everyone has to take it.
This is the kind of stuff you can leave out of your promotional material. Why do you want to leave this stuff out? Because it distracts your prospect from the valuable stuff. It’s just noise.
So when you’re distilling your promotional material, take a good hard look at every sentence, bullet point, and fact in there. If something is so obvious that it simply doesn’t need to be said, delete it. Save yourself the space.
Promotional Problem #2: Irrelevant Information
The second common problem with CTA promotional material is irrelevant information. This problem perpetuates because most CTAs copy the promotional material that other CTAs are using, and they think, if all of those other CTAs are talking about certain stuff, however irrelevant it may be, then by golly, I’m going to talk about it, too.
Why doesn’t this work? Well, for one thing, most CTAs are struggling to find customers. Do you really want to copy what a struggling business is doing in its promotional material? I don’t think so.
In my mind, the better tactic is to think about whether a promotional strategy is actually effective. To be effective, promotional material must excite your prospective customer and motivate him to allocate. Unfortunately, the stuff that customers care about is buried beneath stuff they don’t care about at all. This is the irrelevant information I’m talking about, and here are some common examples.
CTAs love to talk in their promotional material about things like:
- How long you’ve been registered
- Who their service providers are (they name their attorney, their accountant, or their administrator if they have one)
- They also like to talk about where they’re located. I’ve actually seen two-page timelines in CTA pitch books where CTAs discuss in painstaking detail their migration from one city to another to the next, as if their various business locations over time are of historical significance. Like they’ve been migrating on the Lewis and Clark trail or something.
With subject matter like this, ask yourself, “What’s in it for the customer?” Because I can assure you, every time your prospect glances at your stuff, if you’re lucky enough for a prospect to take the time to glance at your stuff, this is the question that’s front and center in his mind: What’s in it for me? If it’s not apparent in the first five seconds, or these days, probably three second, you’ve lost him. It’s your job to distill your message–what‘s great about your CTA–to its essence. Not your customer’s job.
So how long you’ve been registered, who your lawyer is, and where you’re located, these facts don’t provide any benefits for your customer. What they care about is whether they’re going to make money. That’s it.
This is not to say that some customers don’t ask about some of these things before they invest. Maybe they’ll ask you, in a due-diligence inquiry, some of these questions about your lawyer, your location, your administrator, things like that. But few customers actually care about this stuff, and they’ll never ask at all. Ig they need to know, they’ll see it in your disclosure document. So don’t get confused. The purpose of your promotional is not to regurgitate information that’s in your disclosure document. It’s to excite your customer, and of course you must do this in a complaint fashion. But it’s definitely not the purpose of promotional material to drown your customer in details, and that’s what most CTAs are doing.
If it seems difficult to break away from the pack, and deviate from the standard of promotional material that struggling CTAs are using, ask yourself this: would Coca-Cola use expensive TV time, or valuable real estate in a print ad, explaining who their lawyer is, how long they’ve been incorporated, or where their headquarters are? NO. Why not? Because when you buy a Coca-Cola, all you want is a cold drink. That other stuff, all of which may be terribly important to them, doesn’t matter to you at all. That’s why they leave all that stuff out of their Super Bowl commercials. Struggling CTAs would do well to do the same thing.
Promotional Problem #3: You just don’t know what to say
This brings me to the big problem, the elephant in the room with CTA promotional material. It’s this: Many CTAs find that when they remove obvious and irrelevant information, all they have left is a track record.
And this brings me back to my first point: that’s all you need. What Madison Avenue knows, and what CTAs who are struggling with too much promotional material would do well to observe, is that the most effective message is actually very short, and very simple. Complicate it, weigh it down with facts and pages and stats and charts and graphs that are either obvious, or that are confusing, or that don’t capture what your customer finds important, and confuses him and what do you have? You have customers who don’t see the value in your stuff, and a distraction for yourself, and as I said earlier, a distracted CTA is a dead CTA.
Good Promotional Material is Useful
Now, with all this being said, there are times when CTAs are well-served by a great piece of promotional material. It’s not that I’m against promotional material. It’s that I’m against ineffective promotional material confusing your customers, driving them away, distracting you, and eating into your profitability.
Good promotional material, on the other hand, is the stuff that really works, and I’m never opposed to that. It’s rare, but you know it when you see it.
A great example where CTAs can effectively use promotional material is a well-designed webinar that helps CTAs leverage themselves. They can use it as a standard sales presentation. This saves you time, because it saves you having to explain the same thing over and over again. A CTA is one of the most scalable businesses there is, unless you become a bottleneck because you are trying to find the time to have the same conversation with different people over and over again. That is a huge scaling problem, and it can be solved by a well-designed webinar. If this is something you would like some help with, to put to work in your CTA, let me know. I can definitely help you with this.
This brings me to the end for today. Before I close, please be advised that this podcast may constitute attorney advertising. Also, although we discuss general business principles against a legal backdrop, you shouldn’t take anything I say here as legal advice that’s applicable to your situation unless you actually hire me as your attorney and I know exactly what your situation is. If you want to talk to me about doing that, email me, firstname.lastname@example.org, or go to profitablecta.com where you can access my calendar and schedule a call with me. Thanks. I look forward to speaking with you if you’d like some help with your CTA, and I look forward to connecting with you in the next episode.