The best way to succeed is to be successful on purpose, working not just in your business, but also on your business. Following Steven Covey’s advice, “Begin with the end in mind,” the benefits of identifying and specializing in a wealthy niche market are undeniable. By delivering a value proposition that meets the unique needs of a wealthy client niche, your chances of success dramatically rise.
Most advisors don’t serve a niche, and those who do usually fall into one by accident. (An advisor with a couple of dentists as clients receives some referrals to more dentists, and then decides that dentists are a pretty good market to serve.) To be successful on purpose, recognize the value of targeting a niche and then find the right niche for you.
Before settling on a specific niche, it’s crucial to conduct focused market research to determine its size and depth, how best to market to those in the niche, and most important, the unique needs and challenges of niche members. The most effective way to conduct such market research is to interview centers of influence (COIs) — the movers and shakers in the niche.
How can you find the COIs in a potential niche? COIs are highly visible and influential individuals who have in-depth niche knowledge. Either as members of the niche or otherwise professionally related to it, they can help you understand the unique attributes and challenges of those in the niche, as well as its overall viability. Look for key individuals such as these:
o Trade association executives and affinity group leaders
o Trade press publishers, editors, and reporters
o Lawyers, accountants, and other consultants specializing in the niche
o Leading lights and esteemed niche members
Be creative when seeking out COIs. There are trade organizations, consultants, and affinity groups for nearly every conceivable area of interest. If you have any existing clients who are members of the niche, ask them to identify influential niche leaders.
For example, suppose you want to determine the viability of the growing niche of radiologists and other physicians who own stand-alone diagnostic scanning centers (using MRIs, CT scans, etc.). COIs for this niche might include local medical association leaders, local medical trade press editors, professionals (e.g., attorneys, insurance agents, CPAs) who specialize in working with such physicians, and real estate and construction consultants who help locate, build, and set up such facilities. Lastly, the individuals who sell and lease the diagnostic equipment are certain to have a very good idea of how large the market is and who its key players are.
The COI Interview
COI interviews have three main goals. The first and most crucial is to help you determine niche viability, that is, is the niche large enough and wealthy enough to make it your primary area of specialization? Are your assumptions about the niche correct, and are there unique challenges faced by niche members that you are particularly well suited to address?
The second goal is to learn the language of the niche so that its members know you have expertise in their community. For example, when speaking to dentists, you would refer to “physicians and dentists” instead of “doctors and dentists,” since dentists also consider themselves to be doctors. The third goal is to generate referrals, both for other COIs so you can continue your research and for potential niche clients who fit your ideal client profile.
Once you’ve determined an initial list of three to five COIs, the hardest part for most advisors is picking up the phone, dialing and requesting a lunch meeting. Simply explain to the COI that you are a financial advisor doing research on a specific niche, and that his or her name keeps coming up as someone who is both knowledgeable and influential. State that you’d like to discuss the unique needs of those in the niche over lunch, and then suggest a date, time and place convenient to the COI.
Now, think about this for just a moment: Who’s going to say “no” to a request that is both earnest and flattering? Almost no one. Making these calls will be easier if you keep in mind that you’ll very likely get a “yes,” and that for the price of a meal you’ll get focused, in-depth market research.
Conducting the Interview and Following Up
Prepare for the interview by carefully constructing a set of specific but open-ended questions that reflect what you already know about the niche. Then, wait until the menus are gone and ask permission to proceed: “Now that we’ve ordered, may I ask you some questions?” While some advisors prefer to take notes by hand, others like to use an audio recorder so that they can focus completely on the discussion. (Newer digital recorders are quite unobtrusive and can directly upload audio files to your computer.)
Your questions should cover the following areas:
o The primary challenges faced by niche members