AM radio is not dead! – Ryan Payne of Payne Capital Management

Ryan Payne, President and Co-Founder of Payne Capital Management

Ryan Payne, the President and Co-Founder of Payne Capital Management, grew his company’s revenue 71% from $2.7m in 2013 to $4.7m in 2016.  

Payne Capital Management is a registered investment advisor that provides fee-based financial services for high-wealth clients.  

In this interview with Eversprint‘s Malcolm Lui, Ryan shares how he and his team accelerated their high value sales by:  

  • Generating leads through AM radio.  
  • Testing different marketing channels broadly on a small scale before scaling up.  
  • Establishing a hiring process to find the best advisors.  
  • Positioning for the future wave of millennial investing. 

Actionable High Value Sales Insights:  

When referrals were no longer enough to grow his business as fast as he would like, Ryan turned to AM radio.  

Their AM radio show now generates around $500K of new business annually. When you factor in their 95% client retention rate, that’s $10m of additional lifetime revenue each year!  

How Ryan developed this new source of leads can be applied to any channel, not just AM radio. Here’s how he did it, and you can too:  

  • Word of mouth referrals at some point will limit the growth of your business, as you don’t have control over the quantity and quality of the leads. To scale beyond this level, you’ll have to move from referrals based lead gen to one that targets a larger audience.  
  • To develop new marketing channels, test small first, and scale up on indicators of traction, such as an improving ROI. It can take one to two years of testing, optimizing, and slowly scaling up before you start enjoying high ROI from economies of scale benefits.  
  • The ROI of a marketing channel should also take into account the lifetime value of your customers, not just revenue from the front end.  Ryan’s prepared to lose money on a new client the first year, as he knows he’ll make it all back and then some over the next 20 years.  
  • Provide different tracks for leads who are in different points in their lead-to-buyer journey.  At Payne Capital, they provide a free consultation for those more ready to invest with his firm, and educational videos for those who are still in research mode.  
  • Identify secular trends and position yourself to benefit from them.  Ryan has identified that their industry has an aging workforce that’s about to retire, and that millennials will take a greater interest in investing, and has built a younger team to take advantage of these two trends.  

Payne Capital Management Interview - (computer generated transcript)

Download the "Payne Capital Management Interview - (computer generated transcript)" audio file directly from here. It was automatically transcribed by Sonix.ai below:

Malcolm Lui here. Welcome to Eversprint.com. Today we're speaking with Ryan Payne, the President and Co-Founder of Payne Capital Management, a fast growing registered investment adviser that provides fee based financial services for high wealth clients. Welcome to the call Ryan.

Malcolm, thanks for having me.

When you won your second Inc. 5000 ranking last year, you grew your company's revenue 71 percent from about 2.7 million dollars to 4.7 million over the prior three years. Can you share how you did this?

From word of mouth referrals to radio mass marketing

It's surprising to me to hear those numbers too, they sound good. No I think I think the big thing for us is really shifting from you know we started as a business that did a lot of our business from word of mouth referrals you have a very high level service model which can only take you so far. Here's what I found you. There's only so many people that are going to refer you for doing a great job in any one period of time and you don't have as much control over what people refer business to you. So when we actually start to do is more active proactive marketing and spending and spending money on marketing to you know the old saying if you want to make money you need to spend money to make money. And we get very very focused on mass marketing which we had never done before and one of the bigger successes for us was to do radio. So we actually are on a New York City and Philadelphia some you know some of the bigger AM radio stations which is not very cheap for the airtime but that's proved to be a very very successful business model for us in a way to get our message out to a much broader audience of people that are in our network. And I think that's one of the bigger reasons we know why we are able to scale up so much over that timeframe. It's just moving from a referral type model to grow our business to more actively looking at mass marketing and marketing in general just sort of kind of marketing campaign that we can do where we can get to people that we don't really know right now.

So radio is not a dead marekting channel. Some people would say

Radio is not dead and is an active place for affluent people who are 50 and above.

It's hard to believe that radio is not dead. In fact it's a very active place for people that are 50 above and next year. I would say more higher net worth to the mass affluent and that million to 10 million dollar range which is very surprising in the digital marketing. Radio is still alive and well. Believe it or not

Interesting now is this strategy that you just started with right away or did you experiment with some other channels first before finding that radio worked and then you see it up on the radio side.

Test small first, then leverage up what works.

That's a good question. My philosophy is always keep your toes in the water don't go full boat with the strategy if you don't know it works. So we start the radio step strategy on a much smaller station to begin with which was a much lower cost for the air time which was a mild mildly successful. And then we start to leverage up from there when we start to see some success on a smaller scale. We started spending Biggart dollars for those bigger airtime you know for those more prominent air times when we really got our message out there but we really were able to tweak it on a smaller scale initially when we did radio and I think with any marketing campaign the biggest lesson I've learned is we've thrown a lot of money at things where it didn't work because it wasn't tested ahead of time. So I think you know definitely dipping your toes in the water on a small scale to see if that actually works is a really important lesson that I've learned over the years.

Great. How are you tracking the ROI from your radio ad campaigns.

How Ryan calculates ROI

You know for us it's about the assets that we manage. So we just tally up at the end of the year how much in terms of assets under management came from radio and how much do we spend on radio and we look at the revenue we generate from those assets that we're managing and that's how we get an idea about essentially how successful our radio campaigns have been are not

Okay great. Can you share what sort of numbers you can getting from the radio ad campaigns.

You know it's a show not an ad. It's kind of an ad in the sense that to show that advertisers what we do but essentially just to make a distinction. But essentially I mean I would say that if radio cost a half a million dollars a year you know we probably would see revenue somewhere in that range probably a little bit less coming in a year. But the revenues recurring so it doesn't have to come in exactly the same not that we spend on the marketing marketing because you paid a marketing expense once. But once we have a client come onboard and that's a recurring revenue stream. So I'd say it's not not exactly what we put out each year with new revenue we're generating but because the revenue generated over you know ideally many many years. You know we look at that as a good return on that investment. So that makes sense.

Yeah totally makes sense sounds fantastic and given that your client retention rate I imagine is 90 percent plus maybe even 95

Which it

Percent

Is.

Plus

95% client retention rate!

I think 95 percent was for the record. So we're very proud of that

Yeah I mean it's you know the the lifetime value of a client versus the investment you made to acquire them is fantastic. Huge are why

Yet in our business it is I mean if you if you have a good relationship with their clients you service them well I you know I think it's like having a garden and it is going to be very good to you. If you take the time on the service side to really take care of people it's it's amazing that you know longevity with relationships which is a core part of our

So when you said that you're spending roughly 500000 year for your radio show and it's generating revenue of 500000 a year. That happened right at the very beginning or did 500000 a year revenue build up over time.

Willing to lose money for a year or two on if he sees traction

No. It definitely didn't happen in the beginning it certainly did you know beginning to do. I think the thing with anything marketing related and you can probably attest to this. It always takes longer than you think. It's like I'm thinking I had this great idea on the radio I'll be on the radio and people are just going to come in droves. It doesn't really work that way. I think you have to be willing to lose money for a year or two if you're starting to see some traction. You know where it actually is starting to work. But you know I always go with the mindset you know however you think it's going to take and how successful it's going to be. Time is it buy to.

Right now you didn't start off spending 500000 a year. The radio show you started on a much smaller scale and then you scouted up.

How he scaled up their radio show

That's right. That's right. Yeah. So initially we again going with a less prominent time with a maybe a lower you know a station that's not as popular per se. Our costs were a lot lower but it wasn't as acceptable either but at least we saw some success. They gave us the confidence to say hey you know what. You know because there's also economies of scale you know for incremental incrementally more money you can get on a better time. But when you look at the cost per liter however you want to look at it it is much less per lead. When you're on a better station paying more money. But essentially that that more money to pay it get to those better times and get to a better life. So initially paid less but the quality was less in price per lead it was less. It makes sense in terms of what you're getting.

So how are you tracking the leads that are generated from the show. You're making offers to visit your website. Special link and having them sign up at that point and then you know it's coming from the radio show or do you have other ways of doing it.

Offers a no cost financial review on their radio show to generate leads

We just offer a complimentary Financial Review. So each week we allot x amount of reviews that we'll do at no cost if you call in. So that's essentially how people get to know about us. We also were given the opportunity to download a video series something that's maybe a lower ask to get to know who the firm is and get comfortable with us. But essentially it's through our offer for doing a no cost Financial Review upfront is the way that people essentially come in the door and get to know who we are and what we can do for them.

Ok. And when you do talk to them that's when you ask them how they found you how they heard of you. Say I heard it. I heard this through the radio show. Or do you have a special phone number that people are calling that's only used on the radio show or special links on your Web site. That's also tied to your radio show

It's very immediate so we say you know essentially if you call the next 10 minutes and you call an 800 number you can call for the review and at that time you know we have advisers that will follow up and give you a call because it goes to a voicemail initially so we know it's directly from the radio. We know exactly what time it came in because there was offer. So you know with radio it's pretty easy to track which I like about it. So the results are very tangible whereas a lot of marketing obviously that's not the case. So you know with this type of marketing it's very very clear you know when the offer comes in for people to call and essentially from there that we will have them in our database. They don't show up for the meeting or you know it's not the right time we have that that you know that's essentially how we build out our list of potential customers for our

Cool. Now your radio show it's only broadcast locally around your offices your on your greater metropolitan area where you're located. Or is it a national sort of radio show.

I mean sadly for all listeners across America and not everyone can hear our show we on the web. Now we heard the New York City market in the Philadelphia market. We have offices in both those places and New York is a pretty vast market which is kind of nice but any idea at some point sure I do great to Internet and be national as well. But we are not of his time

Ok. So if people want to check out your show what station is it on and at what times can they hear it.

The New York area. It's on ABC. And that's it. It airs on Fridays at 9:00. And you. This and Saturday again at 12:00. And if you go to the bush dotcom you can actually get the show and you can subscribe and get the show right to your e-mail or listen to it right over the web.

Ok cool I'm going to check that out. So for the radio show that you do you do it all in-house or if you hired a team and an external team to help you produce it and create the content and manage everything.

How they create weekly radio show.

We initially started where we had another group create the content essentially and then we would have a lull during the show. We've since then do our own show 100 percent we have an outside producer who puts it all together but we create the content every week and it's an hour long show. So you know every Sunday I sit down and I just come up with content for the week ahead. And my father and I grew on the business 50/50 partners. We would do the show together during the week and we recorded on a Thursday and then it aired throughout the weekend. So it became quite a production from what we did initially and again dipping your toe in the water and then really getting embracing it right. That's how we do things.

So each show is one hour long per week how many hours do you and your dad spend doing what you need to do to get the show up and running and ready to go.

I think collectively is probably about three to four hours because I put all the content together on a Sunday. We record the show takes about an hour during the week and then Bob my partner my father he does the market commentary every Friday after everything transpired and the market for the week. You don't have to wait till the end of the week. You know what happened in that that's probably about an hour prep time for him to get that done. So you know I take her take it's about three hours plus probably really realistically it takes two to put the whole show together.

Cool. And are you able to do is all you know in your office with the equipment you have are you or does it require you to go to a studio somewhere and get it done.

Yes we do it virtually we're not in the same location so I have a Quitman here in the office. And then Bob does it from you know he's he's in New Jersey in the summertime Florida in the winter time so he does his home office. So we essentially get linked up online and we do the show virtually together. That makes sense. But all the equipment we do a freebase Fanhouse and everything set up right here which is great.

Yeah it's fantastic how technology allows people to do that. Now it's is a huge time saver not having to travel to a studio in a huge money saver and not having to rent a studio

Yeah it's awesome. I mean it definitely that's using technology to your advantage for sure.

Yeah. Can you. Can you share a little bit about your conversion process. You have people who listen to your show to hear the offer to get a free consultation free analysis of the current situation. You know what they call the number to schedule call. So two questions what happens. How do you follow up with people who don't show up at the scheduled time and how do you follow up with the people who have to go through your process and decide that that now is not the right time to move forward with the plan you might create for them. What's your follow up process for both of those people.

Their sales conversion process

You know it's a great question. So basically you know someone calls and they want to review we put them right in our database and put on the calendar if they had to cancel or they don't show up. We send them a really nasty e-mail and I'm just kidding. That joke. No no we can't afford to get them on the calendar you know we have the adviser or whoever took the meeting because they're theropod over a couple of weeks but if they just fall off the face of the earth they're just on our our e-mail campaign from there where essentially they get you we have a market commentary comes out each week we do a lot of videos we call the money minutes each week we just give helpful financial tips and then essentially they do come into the office. It's really at to meeting process where during the first meeting it's really discovery we learn a little bit about them what they're trying to do what they're trying to do. I mean our whole process is goal oriented. So it's really trying to help people get from point A to point B to really trying to understand what they're trying to do and then what we'll do is we'll do a full analysis of their portfolio we'll look at all the fees they're paying.

What risks they have in their portfolio what kind of income it generates and they'll come back in and walk them through a whole plan. We'll put together based on what their goals are and then we'll analyze their portfolio to say hey you know either you're doing everything right or here the tweaks we would recommend that you make to get that are on track to get your goals. And then people from there can decide if you know they hey this is what I want to do this is what I was looking for not. So it's a no obligation review but I think it's very powerful and one of the successes of our firm too is just that we do everything from really planning it tends to approach you know to my advisers or certified financial planners. We are fiduciary so we do a lot of things on the planning side that I think really differentiate what we do versus just your typical brokerage firm per se.

Right now your radio show and the process yet line is that that's more geared toward your potential individual high net worth clients for your corporate clients of a different process.

Well I guess I would define the differences and we really work with individuals helping them get to their goals. But we also on the corporate side per se I think we do a lot of retirement plans for businesses especially for working with business owners there's a lot of ways that you can customize the plan for you to save more money pre-tax than a traditional 4 1 k plan. Also just pricing them out a lot of retirement plans are extremely expensive. And there's a lot of hidden costs in these plans. So because we're an independent adviser what we'll do is we'll go out and shop and help you know a business owner or a corporate executive who runs a plan who will help them find better options or reduce the cost on the plan because that's one of the big things that I find there's a lot of these plans have been in place for a long time and a lot of times are run through insurance companies and things like that and they have a lot of hidden costs in there. So are reducing cost on plans. It's been a really important part of our business for a couple of years as well.

Ok so you know when you grow your business 70 percent over the span of three years was it would you say it was primarily driven by the radio show that did it for you or is it also by the follow up systems that you put in place or was it you or was it perhaps how you adjust in fine tune your services as you had had as you had described to me just now to better meet what people were looking for.

Mass marketing the game changer

Good question. I think it's a combination of all three. But I definitely think you know I think we already have great processes in place and we've really been fine tuning those. Year after year which is great too but I do think the game changer is still in marketing. You know I go back to doing things like radio there's some other things that we do digitally that I've been working to we're on a couple of different platforms as a recommend adviser but I think just proactively going out and mass marketing as opposed to just we're marketing through people like our services and continue to use us to refer us as the reason why our revenue jumped such an astronomical level

Right. What other platforms. Mark me Qenos did you try before you landed on radio at the distant worked out.

Mentalists is to continue to think about

Yeah.

Other marketing channels Ryan's tried: social media, lead generation

We tried a lot of different things and we hired a social media firm for a large sum of money to help with our web presence which we sold viro return of investment from us. We tried it was not successful yet different services like promise that they would deliver leads to you for X amount of dollars a month. You know just different little. Yeah I'm always willing to try something that's probably good and bad guys like having the marketing budget down a little bit. And you know radio doesn't work everywhere. You know it's been more successful in some markets and not as successful in other markets so finding the right time finding the right market for used and critical also so that you know we definitely have definitely had a fine tuned out as well that I think the online strategies are trickier for sure. The traditional strategies have worked better for us than the ones that are maybe more would say new media per se.

Yep. Have you tried Facebook. Because you know I'm on Facebook and I see the Fisher Investments hitting me up with their post and their ads on a regular basis. You know I took a look at them. They're spending you know tens of thousands of dollars every month on on paper take ads time assume that it's working for them. Is not something you looked into yourself. Facebook ads

I don't

And

Know.

Pay per click ads

We try. We have tried it and we use a lot of the same methods. In fact I think Fisher stole one of our newest ideas but that's another story altogether basically took the same name and everything but. But I don't know that it's been that successful for them as well. I mean he's a mass marketer and he's probably the 100 pound gorilla in our space. I mean he's really successful but he's just television. You know they market a lot of different channels so I'm not sure if their ROI on digital been great or not because they market through so many different channels and they have the money for it but that's because they're great marketers. I mean this is the perfect example of someone who I would say you know from a service product side of things I don't think they're the greatest which you know not. I don't think they're not doing the intensive kind of financial planning that we're probably doing but their marketing just so much better than theirs and they've been around for longer too that there's so much bigger and I would tell that to Jeff. He is a great marketer and I don't know necessarily though that digital marketing is where their successors.

Right. Yeah they do that. They do have their fingers in a lot different pots there and also what they have. Right. Because they're so big and a multibillion dollar worth of a huge right they have the cash flow to support doing marketing across many different channels simultaneously.

That's right. Yeah. Which and it being I think about that all the time as every time we grow. I've a lot more money in marketing because I you know I you know it's exciting and I really like that part of the business. But you know it is hard because it's like you know you got to make sure you have your profit margins as well. So it's always the Amarasinghe and that's because I think once you really get into the marketing side you see some success with it. You're always thinking about what else can you do from a marketing side. And of course your budget is never in line with what you'd like to do.

Yeah

Oh yeah.

What what other marketing ideas look promising to you that you are keen on testing out.

Other promising marketing channels: TV and digital

That's a good question. So well we do we do a lot of TV which has been that's I think that's starting to pay dividends as well. When we were on CNBC Fox Business News and places like that and I think just the credibility for our firm that's been a big deal because we're probably myself for one of my other advisers on TV now. Once a week. So I think from the pain capital branding standpoint that's been a great avenue to get our name out there and give us credibility. So I want to keep expanding that I think that's a really exciting place to be and I mean we really have a lot of hope for the digital side we just haven't been accessible yet. And then again we do mention we do these videos every week which I think are actually becoming really good. We did them very high and with just different caps I would do a lot of tutorials and things for people on how to build a budget. So yeah I'm excited about the Web I just don't feel like that we have mastered capturing the market on the web and I don't think a lot of financial advisors have. You know I don't know how successful. I'm sure somebody out there is killing it but I haven't found that magic formula formula yet for the web.

Right. Yeah I've spoken to a number of registered investment advisors right here from my former background in the investment banking side. And for them marketing was always a challenge because they're always fearful of going live too far in the marketing and having the various regulatory bodies come down on them. How are you juggling that.

Not being marketing minded is a big mistake

I think we just think we're just careful what we say. I don't think we offer anything you know. From a marketing perspective they get to into detail because I think he can get into trouble right when they start talking about real returns and things like that. So I think if you keep your message abroad and you're giving people practical tips you're never really crossing that line and I think also just inherently people that are in my business are terrible marketers and they don't like to market. They may just use me as an excuse. I mean I think we've seen them exploit things like radios so well it's because just people in our space don't market. So just the fact we're doing something is about like 10000 feet above what most people are doing because they just you know they're they're not necessarily that they're not marketing minded which I think is a big mistake.

Right now I take it that capacity the people you have on board can handle more business. Some of the registered investment advisors I spoke with said they just can't even handle more business they're like referring people to their competitor down the street literally because they just can't take on more people. Have you had that problem and how did you solve it.

Becoming more of a business owner than a financial adviser

Yes. Once the business really started to grow rapidly again with things like radio and other things that we've been doing just that you saw revenue expanded so much I just came to a point where I realized that you know I'm probably more of an entrepreneur business owner than a financial adviser per se. So I do the financial advising to some extent but I have a whole team of financial advisers that we have European capital and we in them right in-house. Most come right through our internship program. So you know they do business the way that we want to do business because we have a real belief about how we run things and that's worked out really really well. So yes this point now we just have a team of advisers and it keeps growing as the business grows. And you know we've got a great system of community learning where younger advisors learn from the other advisors and we do a lot of work on Mastermind groups where we get together in groups and we talk about solutions. And it's it's really become a collective in terms of the knowledge base and the training for all our advisers which I am really proud of. I think that's worked really well.

Sounds like it. Now you have a system where you have interns from the local universities working for you on the investment side. And then those are the people that you're essentially having a nice long drawn out interview process and then you make offers to them if you feel that they're the right fit upon their graduating and being ready to work full time is that how the process works for you to find new people.

The value of interns

That's worked really well for us. Yeah we've had the internship program because someone who's an intern you get a real good feel for what their work ethics like what they're like as people. And I'd say that 90 percent of our advisers have come or 1880 80 percent. I this to getting hired that were not from our internship program but that has been a tremendous advantage for us it's worked really well. So I'm a big believer in interns pay your interns as well. I don't have three internships. You get that quality when you do that. And yes that's that's essentially how we basically have sort of almost every position in our firm which is kind of crazy. I and most of my advisors are millennials which is completely against the trend and women. So it's not your typical financial advisory firm internment demographics

Now how has that been helpful in growing your business having this non typical mix of people on your team.

The value of a non-typical mix of team members

I think it's been a really advantageous because two things number one. You know there's going to be a real shortage of financial advisers. There's many years where firms just weren't hiring. So you have an aging industry in general. You have a lot of people that are under retiring in this business over the next couple of years. So from a long charities standpoint I think it's a huge advantage and I just think that young people are very good at picking things up quickly especially with technology and everything else you need to have your fingertips today. And I think you know I think you have to realize they can learn on their feet faster than anything you think you know and you're really good at. People can copy you and do it better than you eventually. So put your pride aside. You know young people have to have the ability and the skill set to get there. And I found with women specifically they're very organized at a young age maybe more so than men. I know I was much more disorganized when I was in my early 20s. And when it comes to planning you know that organization and having that discipline are really critical. So I thought that women specifically make a very very good financial advisers and it's kind of ironic that there are you know you don't see a lot in the industry. I think that's going to change a lot the next couple of years.

Interesting what other changes are you seeing in the industry that's coming in and what are your plans to take advantage of those of those trends either ride with the trend or if it's an adverse trend getting out of the way.

Positioning for millennials

That's right. That's right you have the right trends right. I the people that I seen I think I'm excited about is millennials. I see you're starting to get very excited about investing. You know when CEOs have saved a lot of money the last couple of years starting family is now their son to get interested in financial security. And you know it just grass roots we're getting a lot of money has come to the office asked me for advice. A lot of a lot of like their parents did 20 years ago when the baby boomers were really starting the family formation and things like that. So it's just cool to see a new generation invest embracing investing because I think for a little while there after 2008 we had the market meltdown and things like that. I think there was a shying away from Wall Street and investing in stocks and bonds and more traditional investments and I kind of see that coming back like you know it became unpopular. Now it's becoming popular again and I think it's cool to see a whole generation now embracing the market. It's a great way to create wealth and it's just nice to see the young generation now taking part of it.

And you have a team of millennials as financial advisers and that's got to be huge plus when it comes to building building rapport with your potential clients especially when the millennials are coming.

The thought crossed my mind now Kim

All right. I really appreciate the time you spent sharing with me your insights about how you grow your business.

My pleasure. Thanks for having me on the show.

For those individuals who would like to work with you and your firm what's the best way for them to contact you should they visit you at your website. Payne see AMCOM spelled p like Peter a y and e CM dot com is the best way to reach your team.

Perfect. Yep go right to a website that you can get plenty of information about our farm right there on the website. That's a great way to get connected with us.

All right. Awesome. Again great talking to you. I really enjoyed our conversation.

Thanks Malcolm. Real pleasure.

We've been speaking with Ryan Payne, the President and Co-Founder of Payne Capital Management about his company's rapid growth. For interviews with other fast growing companies or to learn how we can increase your firm's high ticket sales through automation, visit Eversprint.com.

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