Here's an obvious point that, sadly, too many advisors are still missing. In order to increase their business, advisors should focus on a niche. But Chip Roame, managing principal with Tiburon Strategic Advisors, finds a majority of comprehensive advisors define their niche as "high-net-worth individuals."
"Well, duh ...there the ones with the money," Roame said recently at Tiburon's CEO Summit XIII in San Francisco.In order to stand out, the advisor needs a more specific niche, or segment market. According to Roame, the benefits include:
- Increased flow of referrals - Target marketing will lead to improved prospecting results due to an increase in real and perceived value. Also, the advisor's reputation spreads much faster in niche markets than broad markets. Having a niche market will positively affect public relations. Lastly, the advisor is better able to use time and money.
- Decreased competition and a better close rate - Competition decreases as advisors establish themselves as experts in a particular niche. Segment marketers win every time.
- Lower cost to serve clients - Isn't it easier to serve incremental clients in similar situations?
Roame points to Milwaukee-based planning firm Cleary Gull as an example of a firm that's doing it right.
"They market heavily to pilots," he explains. "They have questionnaires on their Web site that are tailored to each individual airline. They know the ins-and-outs of the industry, and they also know that when pilots sit next to one another in the cockpit for a six hour flight, they talk to one another. As a result, they're referral base is amazing."