From the October 2013 issue of Research Magazine • Subscribe!

Identifying Your Ideal Client

Defining which clients you want most will help you find them

A few years ago, I spent an ­entire half-day with the top advisor in the state of Oklahoma working on one issue. Our mission: to determine who was his ideal client.

Identifying his ideal client was key to the other work we were doing for him. We had to create a compelling story, an elevator statement and then a tagline. But before we could even start with those important marketing tasks, we needed to identify the perfect client and their pain.

This turned out to be a much harder project than you would think. Our advisory client, whom I will call Ken, had a lot of financial planning clients and never considered which ones were ideal; the ones he would like to duplicate.

I think of these people as the “heavenly clients.” We want our practice to be filled with these wonderful people. They make our days easy and fun. It is a joy to be around them and every day they make us grateful to be in this business.

Once Ken had the heavenly client clearly in his mind, then all of his marketing materials could be refocused on the needs of this client. Any prospective clients reading Ken’s newsletter, looking at Ken’s LinkedIn page or checking out Ken’s website will be thinking: “This guy works with folks just like me!” This is one of the many steps that can make it easier to secure the relationship with a new client.

Let me run through what we did for Ken, because it can be a great exercise for you and your team. Here is how we helped him identify his heavenly client:

First we zeroed in on his top clients—the ones who were the most profitable to the firm. I figured these were the ones we wanted to duplicate. No need in bringing in more unprofitable clients!

I used my flip charts and we put each of his top clients on their own piece of paper, so we could write down the answers to the rest of these questions under their names. We probably had about 20 clients, each with their own page tacked up on the walls of his office.

Then we put them through a few other screens that I think of as the “likability” factors including: Were they easy to work with? Did they appreciate Ken’s advice? Did they follow the advice? Did they send him referrals?

We eliminated any clients from the survey that didn’t get good “likability” scores.

Once they pass the likability screens, we looked at demographics: What is their average age? Are they married? Do they have children (and how old)? What is their profession? What do they like to do for fun? Are there any common activities within this group?

The final question: What are their biggest financial pain factors?

Once we got through these, we started seeing patterns. That’s what you want to look for when you do this exercise. Most of Ken’s favorite clients had the following attributes:

  • In their 30s;
  • Professional couples;
  • With young children;
  • Shared his spiritual/political values;
  • Liked outdoor family activities, particularly whitewater rafting;
  • Their biggest pain factors were saving for college and retirement.

In fact, these clients looked a lot like Ken, which made it easier and more fun for him to prospect—he was looking for people just like himself.

The demographic of liking outdoor activities played well in his compelling story. We used a whitewater rafting theme and likened the difficulties of financial planning to taking your family on a whitewater rafting trip. It was something to which his clients could relate. Since the advisors and team members in Ken’s firm actually liked whitewater rafting, they took the entire team out for this fun activity and took lots of photos, which they used on their website and other marketing materials.

Our Best Clients

When we went through this activity for our own firm, I came to a lot of conclusions about our heavenly clients:

They are highly educated—everyone has a doctorate degree. This works out great for us, because they appreciate my doctorate degree, education, the books I’ve written and honors. It fits my “teaching” style. I feel my goal is to educate clients so they can make good decisions. My style is a good fit for this group, who like being educated and need lots of background information before they can make solid financial choices.

Most of our heavenly clients are newly married and will start having children in the next few years. They have lots of needs and we can really help them get a good financial start to their lives.

They don’t have other financial advisors, or if they do the relationships are not strong. I am not worried about doing a better job than the other advisor, but it is less stressful for the client if they don’t have to terminate another relationship.

They are concerned about saving for college and retirement. This fits well into our compelling story, which stresses the importance of considering taxes when creating a distribution strategy.

Our heavenly clients have very complex needs. They might need asset protection strategies in addition to sophisticated distribution strategies in retirement. This is fun for me, because it keeps me on my toes and stretches our team.

Our heavenly clients tend to work at the same building as other clients. This is helpful because they talk about us around the watercooler and tend to refer us to their colleagues. They can trust us because we are working with so many of their colleagues.

Our best clients are frugal. They are savers. In fact many live on one spouse’s income and invest the rest. They are not wealthy today, but if they stick with the plan we lay out for them, they will be.

So take some time to identify your heavenly client. It is the first step to creating a heavenly business.

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