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Portfolio > ETFs > Broad Market

Centers of Influence

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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.

Finding COIs

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

o The size of the niche and the approximate average wealth of niche members

o The best ways to market to niche members

o The trade, social, community, and affinity groups and organizations that members of the niche and their spouses belong to

o Who your competitors in the niche are, along with their value propositions

o Industry events and publications of interest to niche members

o The identity of other niche COIs and professional advisors to niche members (attorneys, accountants, etc.)

Over time you will be able to refine your questions, asking for confirmations of specific facts. For example, you might say, “I’ve been told that retirement planning is very important to niche members. Would you agree with that?”

Close every COI interview with two final questions: “If you were me, knowing what you now know, what else should I have asked you?” and “May I give you a call if any additional questions come up?”

Follow up after the meeting with a handwritten thank-you note. Later, if the information you gained in the interview results in any specific successes, send another note or give the COI a call to keep him or her in the loop (while keeping client privacy in mind, of course). Finally, maximize the benefits of your COI interviews by using your new knowledge to write a white paper or trade magazine article. This is the ultimate frosting on the cake — one that builds your credibility for marketing and positioning purposes.

The Ultimate Center of Influence

Ultimately, the greatest center of influence determining your success is … you. You must choose to:

o Be successful on purpose

o Recognize the value of niche specialization

o Identify niche COIs and not be coy about calling them

o Conduct focused interviews to determine niche viability

o Conduct all necessary follow-up flawlessly

A word to the wise (and eventually wealthy): The most successful advisors in CEG Worldwide’s coaching program consistently find that COI interviews are an invaluable step and key turning point. These interviews deliver something that is notoriously deficient in our industry: real, honest-to-God, market research. So choose a niche, identify its COIs, and launch into lunch by picking up the phone.

Patricia J. Abram is a senior managing partner with CEG Worldwide in Florida; .


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