There’s an old marketing analogy that says: “If you want to fish, then fish where the fish are.”
For financial advisors looking for new clients, the “fish” might be members of your natural market. Or they might be a target market you have selected beforehand. Both strategies have their advantages and their advocates.
Broadly defined, your “natural” market is the segment of the market made up of people with whom you share common ground. That common ground could be life experiences, cultural preferences, values or other characteristics or interests. Your natural market could be the best place to begin looking for prospects who ultimately will become ideal clients.
Starting with your natural market is a strategy that harkens back decades as a proven business-building model.
“When I started in the business,” says George Hartman, managing partner with Accretive Advisor Inc. in Toronto. “We had something called the ‘Project 100.’ We would say, ‘If you were getting married today, who would you invite?’ The list you come up with would be your natural market.”
While Hartman admits that process is a coarse screen, the point is clear: think about the people you know and how you can recruit them as clients.
Once you have identified your natural market, Hartman says, approach it’s members using a subtle, non-sales approach. For example, tell them you want to solicit their feedback about their overall expectations of an advisor.
As the prospect recounts his or her experiences with previous advisors, you will gain insight into what this prospect values and how you can best serve his or her needs.
“People are willing to help a friend,” Hartman says, “but they probably won’t do business with them right away.”
April-Lynn Levitt, a coach with the Personal Coach, in Calgary, says you need to be strategic about how you approach those you have defined as part of your natural market.
Instead of simply cold-calling everyone you know, she suggests, develop a “network map” that will help you visualize all your personal connections. Having that document, she says, can help you identify other relevant prospects related to your natural market that you might not have considered otherwise.
@page_break@For example, if you are a young advisor, you might think that your natural market consists mainly of your friends, who may be people in their early 30s who are starting their families. After mapping out your connections, however, you might find that you are equally well connected to your friends’ parents – a market segment that you may be more interested in working with.
“Having it drawn out helps, so you can see that the best market might not be immediately what you think it is,” Levitt says. “Visualizing your natural market can help you find commonalities that pop out from that list.”
Greg Pollock, president and CEO of Advocis in Toronto, says identifying your natural market early on is an important component in developing your value proposition.
“It helps you figure out what you are going to do differently,” Pollock says, “and how you will add value for the clients you serve.”
Identifying your natural market early in your career increases the likelihood of developing long-term client relationships. As your clients’ finances become more complex, you naturally will need to climb the competency ladder and grow with your client base. You will begin to immerse yourself in the intricacies of financial planning and estate planning, for example.
“Most advisors and clients typically grow up together,” says Levitt. “It comes back to that early relationship.”
As an alternative to your natural market, Stephen Wershing, president of the Client Driven Practice in Rochester, N.Y., suggests going after a “target” market. Identifying and pursuing a specific market segment will force you to stake out an area in which you can develop some expertise that is meaningful to the group of people you would like to work with.
“Figure out what special thing they will need that separates them from the rest of the population,” Wershing says. “And learn a lot about that before you learn about the rest of the universe of financial services.”
Emphasizing specialized knowledge over a more generalist skill set is a strategy that many advisors have long debated. What is important is understanding that good marketing has always been a matter of finding the balance between skills and client needs, says Alan Middleton, executive director of the Schulich Executive Education Centre at York University in Toronto.
“More detailed knowledge of certain financial instruments and their [appropriateness] for clients is an important evolution of the advisory channel,” Middleton says. “But it all depends on what your clients or potential clients want.”
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