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« Talk about your clients in your marketing – not yourself | Main | No, Angie, Client Advisory Boards Are a Great Idea! »
Wednesday
Sep192012

A Niche Is A Need – Avoiding The Biggest Mistake Of Marketing

 

Maybe you've heard that successful marketing starts with defining your niche; know who you will market to before you start. And when they do it, most advisors make the biggest mistake before they ever begin. The people they target are not a niche at all.

Here is the challenge: a niche is not actually a demographic or a profession or an affiliation. A niche is a need. A successful niche identifies a tribe of people who share a common need that is not shared by the general population. It is what separates one group from the rest of us in terms a financial advisor can address.

It is not a description. You can describe a lot of groups that share a lot in common but do not have a unique need. If they don't have a need, what you can do to appeal to them is limited. My favorite is advisors who tell me that their niche market is women. Women is not a niche (I spoke with Mark Tibergien of Pershing Advisor Solutions last weekend, and will write more about that soon.) Women make up 52% of the population – that's not a niche, it's the Grand Canyon. There is nothing I can think of that could meaningfully tie together the needs of my 18-year-old daughter, a 45-year-old corporate executive, and an 87-year-old widow. And unless there is a common need, it is difficult to design an advisory solution for them. It is pointless to define your target market based on the restroom they go into.

A niche is certainly not a bank balance. I hear some advisors say they specialize in high net worth individuals with over $1 million to invest. That is not a need but a resource. People don't define themselves by what they have in the bank. There is nothing in particular that I need simply because I have $1 million. I think of myself a lot of ways – husband, father, someone with kids of a prior marriage, a small-business owner, a cook, a dancer. I don't think of myself as someone who has $1 million.

Another common "niche" is retirees. But, like women, that is just too big a segment with too many varied needs. There is a big difference between a 42-year-old who no longer has to work because he just sold his Internet company and a 67-year-old former plumber. They are likely looking for very different things from an advisor. "Retirees" is not a niche. People who retire from a specific company, or from a certain profession, or who still have teenage kids after they retire could all potentially be niches. I work with one practice who has made significant strategic decisions to highlight their expertise in the benefits plan of a major local employer. When that employer declared bankruptcy, this practice sent out a single e-mail saying they would have a seminar on the implications of that filing on the company’s 401(k) and retiree health benefits and put 600 people in a room. Retirees that share a common challenge is a niche. But just being retired is not.

All marketing begins with the niche. When you choose yours, make sure that what you have selected describes a group that will respond to the special solution you have to offer them. What do you describe as your niche?  I would love to hear some of your ideas in the comments.

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Reader Comments (7)

"A niche is a need". I like that and II like your article. It brings out a very good point that demonstrates the importance of selecting a more focused niche from the market segment you've isolated. A female executive preparing for retirement represents a specific need. A young physician recently out of residency or fellowship represents a separate need from a physician business owner close to reitrement age who has a practice to sell as well as retirement goals.

September 19, 2012 | Unregistered CommenterCindy Trammell

Great job of telling us what niches are not. Very valid points. Give us examples of valid niches that have common needs.

September 20, 2012 | Unregistered CommenterSEA

SEA,

Good point! I will have to make that the topic of another post. in the meantime, I have posted sample "trigger phrases" to clue people in that they are being described a problem that an individual advisor can solve, and you can get some idea of niches from that. The page is in my "web extras" section to accompany the book. If you register for the site, meaning create a user name and give me your email after clicking the "Register" link, you will see "Trigger Phrases" pop up as a new menu choice.

Let me know if that helps!

Steve

September 20, 2012 | Registered CommenterStephen Wershing

Steve, great post. I talk to so many advisor friends that, as you said, have the "grand canyon" as their client niche. Women, retirees, business owners - all generic groups of people.

November 16, 2012 | Unregistered CommenterRobert Henderson

Robert, thanks for the comment! You're right - so many advisors have such a general audience, it is not hard to understand why they cannot stand out from other advisors in their marketing. What's your niche? I want to hear from people about what interesting segments they have carved out. Do you want to start that conversation?

November 17, 2012 | Registered CommenterStephen Wershing

I know you recorded some video tips while at the Business & Wealth Management Forum in Denver - one on picking a niche. Will you be posting them soon?

December 12, 2012 | Unregistered CommenterMarie Swift

Thanks for the question! Yes, I will be posting some tips in the next couple weeks. Stay tuned!

December 12, 2012 | Registered CommenterStephen Wershing

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