Making the Switch to Target Marketing
Newly independent advisor Tom H. of San Luis Obispo, CA wanted to jumpstart his new business by concentrating on referrals and using target marketing to channel his message. "It has occurred to me that I don't have a defined target market," he wrote. "Yes, I have a book of business, and it includes many retired individuals as well as young business owners and random individuals."
But Tom had doubts about the approach, specifically a fear about alienating prospects with a specialized marketing message that didn't fit them: "At the risk of not maintaining a target market, I don't want to leave out possible clients. Is this a sound approach?"
He addressed his concern to Bob David, Horsesmouth Director of Advisor programs and leader of the Automatic Referrals Jumpstart Program. Here was Bob's response:
"I understand how it can be a bit overwhelming to try to tackle too many things at once, especially after going independent. Having grown up in a small University town myself, I know there are some unique challenges. Here are a few thoughts:
- Keep in mind that having a target market does not mean abandoning the clients you have that have been loyal to you as you've changed firms. This would be a de-motivator for you for obvious reasons. It just means that when it comes to your pro-active efforts, you will begin focusing on the needs of your "ideal client" or "target market."
- It is very important to identify your "ideal client." It can be tough, but keep drilling down. Remember that success leaves clues, so start with a hard look at those retirees and inheritors. What do they have in common? What did they do before they retired? Are they affiliated with the University? Or the government? What is the demographic profile—are they men or women? What age? What are their affiliations, passions, hobbies, etc..?
- Consider going one step further and doing a "SWOT" analysis: S—What are your relative Strengths in your market? W—What are your relative Weaknesses? O—What are the Opportunities perhaps overlooked by your competition? T—What are the Threats to your practice? (Could be aging clients, lack of a consistent advisory process, service quality, etc...)
- Consider derivatives of the more obvious categories and maybe move beyond your borders. For example, "Family Owned Funeral Home Operators" throughout CA or retired college professors or retired football coaches, etc...
At first, target marketing can seem daunting, but if you do some digging like Bob suggests, in the end it's a rather natural extension.
For more on target marketing and SWOT analysis, see these Horsesmouth (free registration required) articles:
Many advisors think that by keeping their options open to all potential business they won't miss an opportunity. But the opposite is true. A focused, rich niche can be far more effective. Here's how to develop a niche over the course of the year.
6 Rules to Guide Your SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities, and threats. In order for your marketing plan to work, you must honestly assess your practice in these four areas. If not, you risk failing in your efforts to grow your business.
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