If there’s one thing I wish I’d done in my own business earlier, it’s niching down my marketing to focus on attracting a narrower audience. Of course, having a narrow focus isn’t necessary for every type of business, but for financial advisors, it represents a potential gold mine.
In this article, I’ll be sharing some insights into
What Exactly is Niche Marketing?
Let’s face it, there’s no shortage of Financial Advisors, Investment Advisors, Financial Planners, or any other professionals who consumers see as doing what you do. So it would make sense that you find a way to differentiate yourself from the masses of competitors out there.
While many advisors might ‘think’ they’re doing things in a different way than their competitors, or offering a different investment or planning approach, or provide a different experience… these differences are almost never truly understood by your prospects.
However, when you choose to differentiate yourself by marketing around a particular niche, it becomes much clearer to everyone what you do, and for whom you do it.
To be clear, there are two approaches you can take to niche marketing:
1. Focus on marketing to a narrowly defined type of individual, based on one or more characteristics of who they are… and, more specifically, aspects about themselves that they recognize.
For example, instead of
- Government Employees
Try narrowing your target to…
- Employees of the US Postal Service
And, instead of
- Men who are 55+
Try narrowing your target to…
- Conservative men between 55 and 65 who are serious game hunters
Or, instead of…
- Business Owners
Try narrowing your target to…
- Owners of closely held family businesses valued at $5 – $25 million
2. The second type of niche you can consider focusing on is a specific service or area of expertise you offer. It’s kind of like being a doctor who specializes in Ear, Nose, & Throat. You’re not someone who sees patients for any and all medical need. Instead, you only solve problems in one small area of the body.
Well, the same concept can be used for Financial Advisors. It’s possible to have a niche focused around pretty much any type of financial product or strategy out there… from ethical investing to tax minimization to mutual funds.
What Niche Marketing Doesn’t Mean
Whenever I raise the topic of niche marketing, Advisors will invariably push back telling me that they don’t want to paint themselves into a corner and restrict their ability to help lots more people.
But they’re 100% wrong. Niche marketing doesn’t reduce their chances to get more clients. In fact, it does the exact opposite… which I’ll be addressing in more detail in just a moment.
But first, I want to clear up a bit of confusion about niche marketing.
Just because you market to members of the United Auto Workers doesn’t mean you can’t work with someone who doesn’t work in the auto industry. Niche marketing is only limiting the messaging you use to position yourself in the market. But there’s no reason to turn away business – assuming you believe you can be of help – if it doesn’t fit into your niche marketing category.
And one more thing…
Once you’ve got one niche marketing focus up and running, there’s no reason you can’t start marketing your services to a different niche as well. Of course the likelihood is you’ll be far too busy with too many clients in your first niche that you’ll not see a need to expand.
So now that we have a clearer idea of what niche marketing involves, let’s have a look at 5 major benefits you can expect when you start using it:
Benefit #1: Raise Your Visibility in a Crowded Marketplace
There are a whole lot of Advisors out there who look and sound alike. And any casual glance at the many Advisor and Wirehouse or Broker-Dealer websites doesn’t help the average consumer figure out why to choose one over the other.
Why is this the case? Because most Advisors are trying to cast a wide net using general language chosen to speak to as many people as possible.
But as I learned back in Marketing 101, “if you’re trying to speak to everyone, your message is being heard by no one.”
Let’s say you’re a high school teacher considering what to do with the money amassed in your 403b. You drive by Edward Jones and Merrill Lynch offices (not to mention half a dozen retail banks) going to and from work each day. You see ads for T. Rowe Price, Fidelity, and Charles Schwab on television and in the paper. And, finally, you’ve met a few Advisors in your area who have all given you their card and offered to chat when you’re ready.
One Advisor happens to specialize in working with educators. The others don’t seem to have any particular focus (though a few of their websites make it seem like they work with people with a lot more money than the average high school teacher).
Who are you going to be more likely to want to speak to first?
All else being equal, most teachers are probably going to want to work with someone who understands their personal and financial situation rather than a general “full service” broker who is less familiar with the specific needs (or opportunities) presented by a public school teacher.
Benefit #2: Save Time and Money by Focusing on Less
A lot Advisors do what I call quasi-niche marketing. Instead of going “all in” on a single niche, and producing marketing materials that helps them garner a reputation as a specialist, they try to hit multiple niches at once – and do a lower quality job as a result.
For example, I’ve seen some Advisors with websites that have multiple pages with the same general information, but the headline and a couple of sentences are changed. They might include a dozen or more pages like:
- Financial Planning for Physicians
- Financial Planning for Attorneys
- Financial Planning for Fitness Trainers
- Financial Planning for College Professors
- Financial Planning for Business Owners
…and so on.
Not only do they have web pages for each of these professions, but they also have created white papers and blog posts and maybe even podcast episodes around each of them too.
All that work can take a lot of time or a lot of money paying someone else to do the work for you.
And that doesn’t include the additional time needed to find and send the right white paper or send a link to the right podcast episode when you find out what profession someone’s in.
And if you’re an Advisor who spends time networking or speaking to build your business, you’ve got a lot more events you need to attend if you’re going to connect with people in these various niches.
Of course, when you focus on just one niche, it’s easier to prioritize your time and marketing dollars around fewer (and more impactful) opportunities.
Benefit #3: You Can Be More Selective
Niche marketing doesn’t mean you’re going to build a reputation around your new niche overnight, but when you invest consistent effort you’ll find more of your business being built because people come to you, rather than you chasing after clients.
And, assuming you’ve chosen a niche that you enjoy working with (which only makes sense to do), you’ll be able to fill your pipeline (and your client list) with people you want as clients.
Niche marketing also give you the ability to tell prospects who you DON’T work with.
Let’s say you can’t stand clients who think they know more about the market than you, and second guess any recommendations you make because of some talking head they saw on television. Wouldn’t it be great to be able to pre-screen folks like that before they become your clients?
Niche marketing can help you do that!
Benefit #4: Extract & Receive Referrals More Easily
Referrals are at the core of most Advisors business growth strategy. And yet, actually getting referrals can be challenging.
Many Advisors I know have struggled through awkwardly asking for referrals. Others are consistent in asking, but seem not to generate the right referrals or get them in the quantities they’d like.
One of the biggest barriers to getting your clients or circle of influence to send people your way may simply be that they don’t know who to send you. That’s because, if you’re a “full service” generalist Financial Advisor, the list of people they know who might benefit from your services is probably pretty long.
But when you focus your practice around a specific niche, say “women going through a difficult divorce,” it’s a LOT easier to know who to send your way.
And, using the above example, it would make sense to maintain relationships with specific professionals in your C.O.I. like divorce attorneys, couples therapists, or CPAs with high net-worth family clients.
Benefit #5: Earn More Money
A successful practice is often measured by the amount of income produced. And when you use a niche marketing approach, you’re likely to attract a lot more money than if you try to build a book of business with generalized marketing.
Again, let’s consider the similarity to the medical profession. Generalists might make a good living. But specialists are typically more highly paid for their work.
Like their medical counterparts, Financial Advisors who use the niche marketing approach are able to charge more because they are perceived as bringing a higher value of knowledge to a more specialized group of clients.
In essence, you can charge higher fees and/or work with a higher level of AUM because you’ve put the time and energy in to earning the types of clients who appreciate the things that differentiate you from the rest of the crowded marketplace of Financial Advisors.