If you’re like many financial planners, you may be reluctant to funnel your time and money into niche marketing. After all, shouldn’t you try to reach as many potential clients as possible with your marketing efforts? Won’t you be missing out on a lot of opportunities when you tailor your message to appeal to a smaller group? Surprisingly, the answer is “no.” In fact, when you cast your net too wide or try to be all things to all people, you’re more likely to fail.
The truth is, focusing on a niche helps you stand out from your competition and eliminates many of the potential objections people have about doing business with you. The key to attracting lots of new clients is to have a marketing message that speaks directly to a specific group.
That said, there are a lot of people out there who might be interested in your financial planning services. How do you narrow your focus and accurately pinpoint which group is best for your business … and vice versa?
First, I recommend starting with your current list of clients. Look for commonalities: whether one group is spending more on your services than another, who you enjoyed working with, and so on. For instance, maybe you notice that a significant portion of your new clients are widows or widowers, or couples who have just had a child. Building on your current strengths is one of the easiest ways to become the predominant expert in a particular area.
Once you have an idea of what your general niche market might be, here are five questions to ask yourself:
What Is the Size of the Market?
You don’t want to look back a year down the road and realize that the market isn’t as big as you assumed.
Is the Marketplace Growing or Shrinking?
How many new people are entering the niche who may need your products or services? For instance, if you’re planning on targeting recent college grads, your market isn’t going to disappear anytime soon. But if you target baby boomers, you have to assume that your pool of potential clients will eventually dry up.
Can You Easily Reach Key Decision Makers?
Are there magazines just for the market you are targeting? Associations? Websites? Are there other people selling products or services to this group that you can joint-venture with or rent a mailing list from? This can trip up people who define their niche through attitudes or behaviors such as “I market to people who want to take control of their financial futures.” It’s tougher than you think to find those people.
How Much Money Is Your Niche Able or Willing to Spend?
You can accept as gospel that some of your prospects will think your prices or commissions are too high. In reality, that has more to do with how well you communicate the benefits of your financial planning services, but the market you choose to sell to will also influence how much you can charge.
Is There Potential for Additional Business?
It’s easier to sell something additional to an existing customer than it is to acquire a new customer. Not surprisingly, a niche that will use your services often is far more attractive than one that uses them only occasionally.
And finally, a friendly reminder of what you already know: You need to be aware of any legal or regulatory issues that govern your services or niche market. For example, as a financial planner, compliance issues may limit what you can communicate on websites and in your marketing materials.