Is Your Business Development Approach a Good Fit?

6 Comments

It’s universal: everyone wants to increase production. But what works for an experienced adviser may not be the best approach for a junior adviser, and vice versa.

Consider the junior adviser who:

  • focuses on building a book of clients that fit neatly into a specific niche
  • decides to build credibility by writing for newspapers, providing expert commentary to the media on financial news, and so on

While these approaches might sound promising, they’re unlikely to reap immediate rewards for an adviser who’s just starting out. In general, newer, hungrier advisers need to take anyone who walks in the door as a client; they can’t afford to be as selective as their more established counterparts.

Unless they have deep pockets (or are working with a senior adviser who does), junior advisers typically need to focus on marketing strategies that yield results fast—for example, asking their network of contacts for referrals and introductions. PR strategies and other advanced techniques often require at least two years to bear fruit.

Or, take the established adviser who:

  • accepts anyone as a client, even when he has a full practice and no staff to which to delegate
  • continues to use the same marketing strategies he applied at the beginning of his career

Seasoned producers should be more selective about whom they bring on board. Once you’ve developed a full book of clients, it’s time to narrow your focus to ideal clients and possibly trim your book a bit.

It’s also time to focus on long-term business development strategies—for example, leveraging PR, building strategic alliances, creating a profitable bank program, acquiring a book of clients, or hiring another producer.

What about you?

Do the clients you take and the marketing strategies you pursue reflect your level of success?

    • If you’re a junior adviser, are you getting ahead of yourself in terms of marketing? Do you need to cast a wider net for clients?
    • If you’re more established, have you outgrown your marketing strategies? Do you need to be more selective in taking on new clients?

Joni Youngwirth
Managing Principal of Practice Management
Commonwealth Financial Network
Waltham, Mass.

6 thoughts on “Is Your Business Development Approach a Good Fit?

  1. I respectfully 100% disagree with this post. The FASTEST way to grow your practice and establish credibility is to claim your niche. With the wealth of free and low cost marketing resources available in the Marketing 2.0 world, claiming a niche and accelerating your practice has never been easier. I had ZERO experience in the planning industry (and 14 years in marketing), and I launched my practice’s guerrilla niche marketing efforts on a (very thin) shoestring in 2007. By claiming the new parent market, I created a six figure practice by 2009 — amidst the economic blow-up and a 4-month maternity leave in 2008! Yes, deciding who your ideal client is and pursuing them when you are established I completely support; however, there is no reason to take a “reactive” approach to building your practice before that by taking any client who comes in the door. Nothing grows a practice faster than to have a group of people view you as the expert. Especially when you are new to the industry, differentiating yourself quickly will increase your conversion. How are you supposed to stand out as a newbie when you say you can do anything for anyone?

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  2. Kristin,
    Interesting comment. I’ve written on the niche theme as well (http://www.kitces.com/blog/archives/121-Why-All-Professionals-Should-Eventually-Have-A-Niche….html), with a similar take – most advisors struggle to start their practices because they are completely undifferentiated from anyone else, and therefore cannot generate any referrals because there’s nothing “referrable” about them.

    I think you really sum it up best with your comment: “How are you supposed to stand out as a newbie when you say you can do anything for anyone?”

    Regards,
    – Michael
    Publisher, The Kitces Report, http://www.kitces.com
    Blogger, Nerd’s Eye View, http://www.kitces.com/blog
    Twitterer, @MichaelKitces, http://www.twitter.com/MichaelKitces

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  3. This is a tough one. I think moderation is the best advice. You should probably spend 50-60% of your time developing a niche because this is a long term win, but you also have to have a shotgun approach to building. No one will think you’re an expert with 2 years experience– even with a niche. With that tenure, most are willing to “take a chance” on you.

    I took a 100% shotgun blast approach to building and have an eclectic client base, but in the end I’m working with people who value my advice. And sure their needs are a smattering here and there, but most of this is mitigated with technology anyway.

    In the end should just always present your true self, that’s the niche– you. I’ll admit not being focused has probably hurt in some ways, but at the same time I saw a lot of new advisors focus & work their plan for a niche and fail because they were too narrow, too focused & they missed out by not having a broader focus.

    If you have the support of a senior advisor, developing or deepening a niche is great… but most don’t, most are building from scratch– that being said, unless you are keeping your expenses really low or have a big rolodex of contacts– niche marketing is really risky (and potentially rewarding). Afterall, the risk/reward dynamic never really changes, does it?

    That being said, this is an impossible business where few will succeed, even fewer will rise to the top. If you aren’t going into this business new, with a 5 year timeline you’re either expecting to be very lucky or you’re delusional — commensurate with the the startup rate for any new business owner.

    There is no shortcut, not even focusing on a niche. And as a senior advisor, one should have the insight or size of practice to support the growth rate of someone for 5 years, otherwise this is really just an attempt to have the junior advisors marketing for the senior (and then be fired their 2nd year) – a strategy I see abused all too often.

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  4. I have to agree with Kristin here. Establishing a niche is the way to go. You can’t become well known by helping everyone with anything. This doesn’t mean that you can’t take a client who’s not in your niche, it just means that you are an expert in this specific area. One of my clients markets himself as an advisor to physicians but still has non-physician clients.

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  5. Thanks, Joni, for sparking discussion!

    I agree that junior advisors may need to be less selective to earn a living. Also, until an advisor works with a specific type of client, how can she or he know if that client type is a fit.

    If I were a junior advisor, I’d target a niche, but be open to clients of any type.

    The advantage of targeting a niche is eliminating many distractions. With fewer marketing options, you’re more likely to get things done.

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  6. Perhaps this is one of those political or religious-type discussions. There ends up being no right of wrong. However, I would tend to disagree with the blog post…respectfully of course.

    I am a young advisor. I’m 30 years old and I started out 4 years ago and will inherit our firm from my business partner and father-in-law in about 4 years. So, even at that time I’ll still be young as compared to my peers.

    That said, I’ve found it virtually impossible to gain new business by being a generalist. Of course, I’m not overly idealistic either…I’ll take most any client RIGHT NOW. Of course, the idea of creating a niche is very risky but one would have to assume that a practitioner will do their homework prior to jumping in. If there is a market in need, then great…if not, then move on.

    We’re currently in the niche development stage using a business coach to help us along the way and it’s very exciting. We’ll get there but it’s certainly not going to happen overnight.

    Thanks for the great topic for discussion!

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