Looking for a niche? You probably already have one



I was working with Gary and Brendan, partners in their financial planning practice, to put together their client advisory board. We got to the stage of the coaching process where we identify candidates to invite. “So what is your target market?” I asked. “What is your niche?” They replied that they did not have one – that their client base was a mishmash of all different kinds of people with all different kinds of needs, no theme, no pattern. This could have made the process of identifying the right clients to be on the board more complicated because ideally your board would be composed entirely of clients from your target market.

Okay, I responded. Tell me about some of your favorite clients. Well there’s Joe, of course. We really want him on the board. He is a retired teacher. It would be great to have Chet and Mary there as well. Come to think of it, Chet is a retired teacher, too. Then there’s Jim. Hey, he is a retired teacher also.

It may sound contrived, but that was a real conversation. (The names have been changed)

I was reminded of this during my webinar last week for Horsesmouth. Wendi Webb, who consults with advisors and hosted the webinar, mentioned during our conversation about niche markets that one of the first things she does when helping advisors identify a niche is to segment their clients. Most of the time, it emerges that the advisor already has a niche without realizing it.

I have the same experience with advisors. One of the challenges is that we need to think of a niche in new terms. As I have written before, I niche is not a profession or an age range or a stage of life – a niche is a need that the group shares. This is different than how most advisors have thought about it traditionally. So, when considering a target market they tell me their clients don’t come from one particular industry and that they are all different ages. But when we begin talking about what the advisor does for them, what kinds of services the clients need from them and what kind of work the advisor has done for them, we often gradually realize that there is a theme. There are things that ties all these clients together. And often it is not a great distance from discovering that theme to describing a niche market.

If you are searching for a niche to specialize in, start by segmenting your clients. Include categories for what kinds of financial planning challenges you have helped them with and what kinds of services they need from you. You may find, as Wendi and I have, that you already work in a niche market and simply needed to discover it.

2 Comments

  1. Barrett PorterAugust 23, 2013

    Stephen. I'm wondering how you respond to this scenario:

    Say you have a type of client group that shares a need, but half of your current clients fall outside of that niche. In my case, I feel completely connected and engaged with the other 50%, but I usually hold myself out as an expert in my niche (blog writing for example). In your experience, when non-niche clients get wind of this, do they start to feel less connected to their advisor? Do you suggest that an advisor slowly transitions towards having all of his clients fit the niche by moving the other clients to a colleague? Or do you feel that non-niche clients won't really care if your marketing and blogs talk mostly to a group in which they aren't a "member."

    Reply
  2. Stephen WershingAugust 27, 2013

    Barrett,

    In the short run especially, as long as you maintain the same level of services and personal attention, they will not feel less connected to you.

    Focusing on a niche should bring the opportunity to develop expertise at the financial planning needs peculiar to people in that niche. For your clients outside that target market, they may, over time, feel like you are less a fit for them. Some may eventually move to a new advisor, though most will probably not care as long as you continue to do for them what you always have.

    In the long run, it makes for a stronger brand to have as many of your clients from your niche as possible. But those existing clients outside the niche will likely stick with you.

    Thanks for the question!

    Reply

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