This week I’d like to share a special guest post from my friend, James Pollard. James is a management consultant to financial advisors looking to get more clients. He recently released The Ultimate Financial Advisor’s Guide to Getting More Clients, which is available here for $97.
His guide is filled with good ideas and smart insights for advisors looking to grow their businesses. My favorite section below is a subject I am passionate about: embracing a niche. Most of the advisors I work with are true specialists, which makes our marketing efforts much easier and more successful. If you haven’t yet embraced a real niche, read the tips below and start thinking of a few specialties to try out in 2017. I hope you enjoy the post!
Do Yourself a Favor; Embrace a Niche
By James Pollard
Financial advisors who aren’t getting as many clients as they want often try to overcome the challenge by casting a wider net. They assume that if their current marketing approach isn’t getting any new clients, it’s because they aren’t going wide enough. They think if they expand their reach to a wider range of prospective clients, their problems will be solved. Some advisors are successful without having a niche market, but don’t do that to yourself. Your path will be a lot easier if you specialize in a particular area.
Oh, and I hate to break it to you, but “small business owners” or “young adults” isn’t specialized enough. What kind of business? What type of young adult? Every advisor, when he/she starts out, is given this little packet that talks about finding a niche market. Yet, so many advisors fail at it. In my professional opinion, I estimate that upwards of 95% of advisors aren’t being nearly as specialized as they should be.
Take me for example. I am not a “management consultant”. I am a consultant, yes, but I only work with one particular industry – the financial services industry. More than that, my services are specifically tailored to a certain type of person within the industry – financial advisors. Going even deeper, I solve a specific type of problem – getting more clients.
If you’re a financial advisor who wants more clients and you had to choose between me and a general management consultant who works with everyone, who are you going to choose?
Don’t Cast a Wider Net
Paradoxically, casting a wider net for prospects/clients actually reduces the effectiveness of your marketing. By casting a wider net, you become less differentiated, less unique, and less appealing to anyone in particular. When you go wide, your number of prospects may be greater, but fewer prospects actually become clients.
Benefits of Specialization
Being a specialist separates the experts from the generalists, and most people prefer working with experts. The most affluent investors definitely prefer working with someone who specializes in working with those with similar circumstances. Working with a wealthy attorney who is responsible for his own retirement is a completely different ballgame than working with a corporate executive who has stock options and benefit packages.
When you specialize, you now have a powerful answer when people ask why they should work with you. It’s because you specialize in working with people just like them! Specialization becomes even more powerful as the years go on because it allows you to commit your time and professional development in a definite direction. You won’t stress yourself out trying to become an expert in several areas. Instead, you will go deep into one area and continue to develop an extraordinarily high level of expertise. All of this makes you even more attractive to your chosen market and makes it difficult for your competitors to break through.
We’ll go into more detail about this in the rest of the guide, but choosing a niche will allow you to do stuff like:
- Easily find prospects by typing their title into LinkedIn and other search engines. (For example, all I have to do is type in “financial advisor” into LinkedIn and I can find thousands of prospects. You can do the same with your niche.)
- Easily get referrals. If you work with nothing but teachers, who do you think is in their professional network? You guessed it, more teachers! No more “do you know anyone who could use my services?” Instead, you’ll be asking something like, “Who do you work/who is your closest colleague that could benefit from what I’ve done for you?”
Remember how I said you can increase your income by increasing your productivity? Well, what do you think the lead-to-client conversion ratio is for a generalist? Pretty low! Let’s assume that you work with everyone who has a pulse and for every hundred people you contact, you convert one into a client. That’s a 1% conversion ratio.
Now let’s assume that you change the way you do business and only work with a certain market. You approach that market with a message tailored to their needs and you speak their language. Even if you only convert one out of every twenty people in your target niche, your productivity will have increased and you will have increased your income FIVE TIMES! If you were making $100,000 as a generalist, you would be cracking half a million, my friend.
Because of its direct effect on your income as an advisor, leveraging your personal productivity should be a primary focus. Since people in a particular niche share the same hopes, fears, and financial concerns, you will soon know every objection, problem, and concern that your target prospects have.
Eventually you can design systems, including prepackaged solutions, to help deliver your services more efficiently, further increasing your income. One of my newer consulting clients was having great difficulty finding the time to prospect for new business. When I told him he should spend at least two (preferably four) hours per day prospecting, I thought he was going to have a panic attack. Trying to calm him down, I asked what he did all day.
Do you know what he told me?
He said he did research all day. He dug himself into a hole and was desperate to get out. All of his clients have different circumstances and problems, so he is constantly spinning on a hamster wheel, trying to keep on top of their changing needs.
Wouldn’t it be so much easier if the bulk (or all) of your clients are in the same industry, with the same goals, the same concerns, the same investment options, and the same service needs?
McDonald’s doesn’t waste time trying to serve burgers, then salmon, then sushi, then pizza. They do hamburgers… over and over and over. They have systems in place that enable that hamburger to be the same wherever you go. It’s a product that can be delivered efficiently and consistently anywhere they put a franchise. You should aspire to build your business the same way.
Did you know that 80% of a typical salesperson’s time is wasted talking to poorly qualified or unqualified prospects? When you target a particular group, you can spend most of your time talking with highly qualified prospects who have clear potential to become clients. After all, you will be positioned as the go-to person in that industry. This one technique alone can significantly increase your marketing productivity and your income.
What Does a True Specialty Look Like?
Here are some niches you can explore as a financial advisor:
- Any professional group – physicians, attorneys, realtors, teachers, police officers
- Entrepreneurs in a particular stage of business – these people are a little harder to find, but you can break it down by startup and mature businesses.
- Corporate services – this includes stock options, deferred compensation, 401(k) plans, etc.
- Executives – very easy to find on LinkedIn. I know someone who does nothing but set appointments via LinkedIn with executives.
- Professional referral sources – we are going to talk about this later in the guide. Essentially, you need to make some CPA and attorney friends!
- Retirees and pre-retirees – you can specialize in IRAs and the transition to retirement.
Here’s one of the biggest differences between me and other coaches…. I do not advise you to specialize in one niche from the start. If you have never had any niche market before, do not just pick one and go after it. Pick two or three different markets and start to build business that way. Over time, one market will begin to emerge above the others as the one you want to “marry”. Once that happens, you can go all the way and develop the expertise required to be a real specialist.
This post is an exclusive excerpt from The Ultimate Financial Advisor’s Guide to Getting More Clients. Buy the guide here now.