In Tom Stanley’s book, Marketing to the Affluent, he tells the great story of Otto Kretchmeyer, a German submarine commander who sank more Allied ships than any other submarine commander in the history of the German Navy. Kretchmeyer also lived through the war, which was an accomplishment in itself: Only about one out of every 10 submarine commanders survived the war.
At the end of the war, the Allies asked the commander for his secret. He responded that he did the exact opposite of what he’d been taught in submarine school. In training, he had been taught to surface outside the convoys and shoot his torpedoes in. In the real world, however, he found out very quickly that the most unimportant cargoes were on the outside of the convoys, and the important things like food and ammunition were always in the middle of the convoy where they were most protected. He also found out that as soon as he fired torpedoes from outside the convoy and below the surface, the sub-hunters would come after him with a vengeance. If you have ever seen the movies “Das Boot” or “U-571,” you know you don’t want to be in a submarine when depth charges go off.
Kretchmeyer realized that these tactics would probably get them all killed in short order. So he decided to change strategies, and attack by surfacing right in the middle of the convoys. By doing so, he was able to fire torpedoes in both directions and sink a number of Allied ships carrying the most important cargoes, and he was protected from retaliation because they couldn’t shoot at him while he was on the surface without shooting each other in the crossfire. The technique worked like a charm.
What does this have to do with your financial advisory business? Well, if you are like most people in the financial industry, you have been taught to shoot your marketing messages in from outside the convoy. Cold calls, mass mailings, public seminars, and advertising are all shots from the outside in.
What you want to do is identify the communities of people you want to serve and then surface in the middle of their convoys. Their convoys are organizations, association meetings, private parties, and clubs. These are what I call rich niches. Once you are inside a rich niche, you can develop relationships and then turn those relationships into business. Let’s see how other advisors are using this tactic to build their businesses.
The first example is an advisor named Jeff who lives in the Midwest. One of Jeff’s brothers is a physician; the other is a podiatrist. One of the niches Jeff has discovered is a group of 25 Canadian physicians who live in his city. He has three or four of those Canadian physicians as clients. Because he’s developed specialized knowledge and expertise, he can provide an exceptional level of service to these clients. Jeff makes a point of surfacing in the middle of their convoys. Last year, Jeff was the cook at their Fourth of July barbecue.
All these doctors know each other, and they’re finding out that Jeff is an expert at solving the unique problems that they have. This gives Jeff a competitive advantage over other advisors. Wealthy investors will always chose to work with a knowledgeable, trusted niche expert to whom their friends introduce them and whom they know and like.
The Company Store
My friend Hal makes over a million dollars a year serving just one rich niche, Chevron. In fact, he has limited his niche to two facilities at Chevron: an oil production facility close to his home, and another facility several hours’ drive away. Hal tells me that when the company is about to have layoffs, he starts working his network of contacts within the company and comes up with a list of people who are eligible for a retirement package. Since Hal has worked in this market for the last 15 years, he knows many people in the niche and typically can arrange an introduction to some of the folks who are leaving the company.
Hal claims that he has a 100% closing ratio when he is introduced to someone this way. One of the most powerful things about niche marketing is that if you do a good job for your clients, you’ll get multiple endorsements from happy clients, as Hal does. When a prospect hears good things about you from several people they know, they’re very likely to want to work with you.
Hal tells me that his favorite client is a truck driver who worked at Chevron for more than 30 years and has $350,000 in his rollover. Hal’s father was a truck driver, so not only is Hal an expert in this niche, he has a natural affinity for the people in it.
The Midas Touch
Peter, an advisor I worked with in Texas, was interested in the franchise market. In the right franchises, the owners are prescreened so you know ahead of time that they’re successful.
After a bit of research, Peter decided to buy a Midas muffler franchise. It turned out that you had to have a net worth of more than $750,000 just to qualify, so Peter knew that every Midas muffler franchise owner fit his description of the ideal client, at least in terms of net worth. Peter bought a franchise, and when he attended Midas conferences, he was happy to learn that he was the only financial advisor there.