Why is niche marketing important for you? A recent survey from the Client Executive Board, a consultancy firm based in US, shows that 82% of investors said the most important quality in an advisor is one with whom they can connect. This means that clients expect you to possess a deep understanding of their lives. But possessing a deep connection is possible only through specializing in a narrow segment of the market- a niche.
However, many advisors object to focussing completely on a niche. A whitepaper by SEI, a research firm based in US, shows that advisors are under the misconception that they will have to turn away other profitable prospects. Others fear they lack the knowledge to specialize in a single industry or demographic group or risk jeopardizes existing relationships.
Here are a few steps to building a niche practice.
Step 1: Examining your book and defining your niche
Focusing on a niche is about establishing a connection between the advisor and client that is conducive for both parties. Niches come in all sizes and shapes but the narrower the better. Don’t confuse a target market with a niche. Many advisors believe they are pursuing a niche but in reality it is a market segment. For example, advisors serving HNW investors is a target but too broad to qualify as a niche. “Advisors who define their niche in that fashion are saying, “We serve rich people,” says the research.
Another research from wealthmanagement.com shows eight out of ten advisors surveyed in 2013, identified investors with $1 million-plus as their most important target. Here is the way to think about the difference between a market category and niche.
Niches do not necessarily have to be defined by client demographics. You can build a niche around your services. Specializing in things like financial planning, defined contribution services, pension plans and tax management will set you apart from the advisor trying to do it all.
Step 2: Marketing your niche
Focusing your practice means narrowing your audience, which translates to a simple, straightforward message. It should be clear, focussed and benefit driven. Following a niche clientele helps you plan your marketing strategies effectively. All of a sudden your seminars, blog posts, e-mail campaigns, client events—whatever tactics you employ—become much more manageable. You have a predefined audience, a clear message targeted directly at them and importantly, an opportunity to bring like-minded people together. When clients and prospects with similar needs and challenges come together, you’re positioned as the problem solver, the professional with solutions that matter to everyone.
And from that, comes referrals. Clients in your niche or area of specialization will be much more likely to refer you because you know them so well.
For example, if you are targeting professionals, you can consider these strategies:
- Attending the group’s conventions or conferences
- Seek out opportunities to get placed on the program to discuss investment trends or challenges
- Seek out centers of influence who specialize in the same niche
- Post blogs on tax and legislation issues unique to that group
- Join their groups on LinkedIn
Step 3: Servicing your niche
When you follow a particular niche, you will find similarities in your client base. How do your top clients prefer to work with you? Do they prefer monthly contact or quarterly? How do they like investment returns reported? Explore these and other questions and consider building a service model to match the preferences of your top clients. Such an effort will be noticed by existing clients and help you attract new ones.
To sum up, building a niche practice may not suitable for every advisor. But, many prefer not to be everyone’s advisor and restrict themselves to only certain set of clients. Col. Sanjeev Govila, an advisor from Delhi focuses only on families of army men. Building a niche practice requires focus and commitment but it is also highly rewarded.
Reproduced verbatim from the whitepaper ‘Building Client Affinity through Segmentation and Niche Marketing and Service’
