The 52: Market What Your Prospect Wants

Market What Your Prospect Wants

One of the biggest mistakes I see advisors make is that they try to communicate a message that is focused on what they want for the prospect instead of what the prospect wants for themselves. For example, the advisor says, “We develop a portfolio based on your risk tolerance.” But the prospect is thinking, “Do I have enough money saved up to retire?”

When marketing to a prospect, always focus your message on what their immediate pain point is. Speak in their language. And don’t try to promote messages for things they aren’t even aware they need yet (e.g., we make sure your beneficiaries are up to date.

The 52: Marketing Strategy Changes with Scale

Marketing Strategy Changes with Scale

In the book The 1-Page Marketing Plan, author Allan Dib states that marketing strategy changes with scale. He poses the analogy that it takes a much different approach and investment to build a skyscraper than it does a small investment property.

The same concept can be applied to marketing a multibillion-dollar-AUM RIA versus a $100 million-AUM RIA. Yet many small RIAs look to the largest firms in the industry to replicate their marketing strategy.

Large firms spend money on national TV, radio, print, and digital advertising because they have the money for it to make an impact, and the cost is a drop in the bucket for them. Small firms that try this, even on a local level, will blow through their annual marketing budget in weeks and have nothing to show for it.

Instead of trying to imitate the outsized competition, RIAs should pick a strategy that matches the stage and size of their business.

The 52: You Can’t Market on Customer Service

You Can’t Market on Customer Service

When I evaluate the viability of a niche with an advisor, I always ask what they offer to that niche that other advisors don’t. If I get the answer, “I provide better service,” I send them back to the drawing board.

The truth is, you can’t market on customer service! Sure, companies like the Ritz-Carlton and Nordstrom attract customers based on their reputation for stellar service. But they can do this because they have millions of customers who can spread the word. When you only have 100 clients, you don’t have enough people to generate word-of-mouth marketing about your service.

At the end of the day, being the best at customer service is hard to prove, hard to maintain a competitive advantage for, and even harder to market.

How to Know if You Picked a Good Niche

Building a More Successful—and Satisfying—Business Through Niche Marketing

The 52: The Hard Truth: There’s No Guaranteed Marketing Strategy

The Hard Truth: There’s No Guaranteed Marketing Strategy

Advisors often ask, “What works when it comes to marketing?” The hard truth is that no one marketing strategy will succeed for all financial advisors. So what should you do?

The firms that are most successful with marketing are the ones that use an approach that is suited for their business, skills, and culture. They put their entire focus on that one approach.

Here are the three most common approaches:

• Transaction approach: Firms engage in direct marketing campaigns such as workshops, direct mail, and ads to generate leads.

• Relationship approach: Firms rely on clients, centers of influence, or community connections for referrals.

• Expertise approach: Firms focus on being an expert in a niche market to attract ideal prospects.

To help you uncover the approach that is best suited for your firm, we’ve released a new ebook, 3 Approaches to Financial Advisor Marketing. Download now to choose your approach and start making your marketing effective.

How to Know If You Picked a Good Niche

You can anticipate many benefits when you focus your practice on a niche. With a successful niche, you enjoy reduced competition, higher marketing ROI, and overall efficiencies in your business.

But when you are just starting out, how do you know if you will succeed with your chosen niche? While there is no guarantee, you can filter your niche through the following criteria to see how likely you will succeed.

Pain

Is your niche feeling significant mental or emotional pain regarding their problem?

The more pain a prospect feels about their specific financial problem, the more likely they will act to solve it.

For example, someone who receives a sudden windfall, such as the sale of property or the exercise of stock, faces the very real pain of taxes. Someone who is suddenly single and managing their personal finances for the first time faces the pain of not knowing if they can survive on the money they have. Someone who has more than enough money and just wants to get their finances organized is not feeling that much pain.

Purchasing Power

Is your niche willing and able to pay your fees?

If your niche doesn’t have the means to pay your fees, you don’t have a business. An ability to pay does not mean they have the assets for your minimum AUM fees. You may have to find a creative pricing structure that matches your niche’s financial situation (e.g., subscription, flat fee, or hourly).

Regardless, you deserve to get paid what your expertise is worth, and if your niche can’t pay you, it’s not a good choice.  

Easy to Target

Is your niche easy to find for marketing purposes?

Some niches will be easy to market to, and others will not. For example, finding a list of employees working for one business (e.g., Pfizer) is easy because you can search LinkedIn. Finding a list of people interested in family legacy planning would be harder.  

Can you easily find or purchase a marketing list of people in your niche (e.g., LinkedIn or a direct mailing list)? Can you easily identify where members of your niche gather together (e.g., conferences or associations)? Answering yes to either of those questions is a good sign that you’ll easily reach your niche.

If you can’t buy a list of prospects or determine where they gather, it doesn’t mean that your niche is a bad choice. But it does mean you should be prepared that marketing will be harder for this niche.

Growing

Is your niche market growing?

While you don’t have to pick a niche in a fast-growing market to succeed (e.g., advising clients on NFTs), you don’t want to invest your time and money in a slowly dying market either.

For example, I have seen two instances where an RIA specialized in utility company pension plans that eventually phased out. While some employees got grandfathered in, new employees did not.

It was clear this niche was no longer a long-term feasible client base. In both cases, the firms shifted their businesses away from the niche.

Urgency

Is it urgent for your niche to have their problem solved?

The more urgent it is for your niche to solve their problem, the easier it is for you to attract them.

For example, dealing with the immediate aftermath of a spouse’s death is an urgent need. Someone who has money scattered across different employers and investment accounts and just wants to get their finances organized doesn’t feel an urgency to solve their problem.

If there is no urgency, don’t automatically eliminate the niche—but be prepared for a longer, more difficult sales and marketing process.

Dominance

Is it possible for you to dominate this space due to a lack of competition?

How much other competition is there in your niche? If there is a lot, it may mean you need to niche down further.

For example, there is a lot of competition for financial advisors serving business owners. If you choose business owners as your niche, you will probably want to be even more specialized so that you can dominate the space.

You may work with individual partners within a business who want to sell their stake. Sure, your competition may deal with clients like these, but you can become the dominant expert if that’s all you do.

Complexity

Is the niche’s primary financial problem complex enough that most other financial advisors can’t address it adequately or profitably?

Complexity is one of the key factors that will help protect your dominance in a niche.

If your niche has an issue that takes a lot of time and research, most advisors will not adequately serve these clients. But once you have worked with several of these clients and developed the expertise and a process, you can profitably serve these clients in a way the competition can’t.

Experience

Do you have personal or professional experience with this niche?

It’s important to choose a niche you have experience with, either professionally or personally. You may already have a handful of clients in the niche. Or you may be in the niche yourself.

For example, if your niche is families with special needs children, it’s OK if you don’t have any clients in this niche if you have a child with special needs. You have experience with this niche because you are part of this niche.

Credibility

Do you have credibility working with clients in this niche?

If you have no experience working with your chosen niche, it will be hard to convince the first few clients to work with you.

For example, I once spoke with an advisor who thought airline pilots would be a good niche. But he had never worked in the airlines and didn’t have any airline clients. He had no established credibility, which would make that niche very difficult for him. 

Access

Can you access the niche through an existing network and opportunities?

How much access you have to your niche will make all the difference in your ability to market. Say you want to work with physicians at Kaiser—this is not an easy group to get in front of. But if your spouse is a Kaiser physician, they can help you gain access to that network.

The best-case scenario is if you are a member of the niche (e.g., your niche is special needs planning and you have a child with special needs). But if you aren’t a member, you will want to make sure you have other ways to access the group.

Expertise

Do you have the skills and knowledge to serve this niche?

Finally, do you have the expertise to serve the niche? Now, when you are just starting with a niche, you won’t have a lot of expertise, but you should have some basic skills to serve this group.

For example, when I started my business 13 years ago, I had worked for an RIA in marketing for three years. While I definitely was not an expert with my niche like I am today, I had the basic skills and knowledge to help my first few clients.

What’s Your Formula for Success?

There is no exact calculation to tell you whether a niche will succeed. But go back and look at your answers to the above questions. If you had only a few yeses, you might want to reconsider your niche. Your likelihood of success increases with the more affirmative responses you have.

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About Kristen Luke

Kristen Luke is the President of Kaleido Creative Studio, a marketing agency that helps transform Registered Investment Advisors and their employees into experts in a niche, making it easier for them to stand out from the competition and attract ideal clients. Over the past 16 years, Kristen has consulted with hundreds of financial advisory firms and shared her marketing expertise via industry conferences and publications nationwide.

The 52: Other Industries Have Discovered There Are Riches in Niches

Other Industries Have Discovered There Are Riches in Niches

Many advisors I talk to think they can’t make enough money focusing on a niche. The easiest way to debunk this myth is by looking at another industry—gyms.

Boutique fitness studios (think Orangetheory, CrossFit, barre, Pilates, yoga, etc.) account for more than 42% of all gym memberships, making up nearly half of the gym industry revenue.

The average cost of a monthly unlimited membership at a boutique studio ranges from $110 to $360, while a national “all things to all people” gym like Gold’s Gym or 24 Hour Fitness is less than $50 per month.

If the highly competitive gym industry has learned that a niche approach of offering one service to one type of client is the key to growth and riches, I hope financial advisors can learn the same!

Source: https://runrepeat.com/boutique-fitness-statistics.

The 52: Look to COIs for More Than Referrals

Look to COIs for More Than Referrals

It’s common wisdom in the industry that centers of influence (COIs)—attorneys, CPAs, etc.—can be great referral sources. But it can take years to gain the trust required for their referrals. Yet even while you are building those relationships, COIs can still be valuable in helping you get in front of prospects.

When you meet with a COI, ask them, “I’m looking to get in front of more [insert niche] clients. If you were me, how would you go about doing that?” Their answers can help you uncover possible marketing channels you’ve never considered. Some COIs will even offer to introduce you to other relationships to help you get in front of your niche. So instead of trying to mine COIs for referrals, use these relationships to expand your reach within your niche.

The 52: How to Know If You Picked a Good Niche

How to Know If You Picked a Good Niche

How do you know you made the right decision when picking a niche? We use these 11 questions to evaluate the suitability and viability of a niche for financial advisors:

1. Pain: Is your niche feeling real mental or emotional pain regarding their problem?

2. Purchasing power: Is your niche willing and able to pay your fees?

3. Easy to target: Is your niche easy to find for marketing purposes (e.g., purchased lists, associations, groups, social media targeting)?

4. Growing: Is your niche market growing?

5. Urgency: Is it urgent for your niche to have their problem solved?

6. Dominance: Is it possible for you to dominate this space due to a lack of competition?

7. Complexity: Is the niche’s primary financial problem something that takes a lot of time and research for the first client but would be easy to scale once you have developed the expertise and a process?

8. Experience: Do you have personal or professional experience with this niche?

9. Credibility: Do you have credibility working with clients in this niche?

10. Access: Can you access the niche through an existing network and opportunities?

11. Expertise: Do you have the skills and knowledge to serve this niche?

The more yeses you have, the more likely you will succeed with your niche.