Don’t Let Your Niche Get Too Narrow
“The best is the mortal enemy of the good.”
–Lt. Gen. George S. Patton
Having a tightly defined niche as a Financial Advisor is important. A research by CEG Worldwide confirms it – six out of ten advisors they surveyed said that focusing on a niche has been “tremendously or very positive” in helping them attract affluent clients. Only three percent said that focusing on a niche had had a “negative impact.”
So if focusing on a niche is so good, why are any advisors having a negative experience with it?
In many cases, it’s likely that these planners have fallen into a common trap: Their focus is too narrow.
Now in today’s day and age, it’s very difficult to be too narrow. Technology and social media make niches that were almost unheard of a generation ago quite viable now. We’re no longer limited by geography. Advisors can build very successful practices on just a few clients from anywhere in the world. The tighter the niche, the more efficient the marketing becomes, and the less direct competition you have.
So how do you know if you’re being too picky? Here are a few tell-a-tale signs.
- You’re doing everything right – and marketing aggressively. But you just aren’t finding prospects who meet your criteria.
- Your SEO keywords don’t generate any traffic – for anybody.
- You’re constantly turning away clients who need your help, are currently profitable or have room for growth.
- You’re having trouble just staying in business. There are times when you need to take on some business now, even if you think you might have to let them go in a few years. That’s ok. You can’t help anybody if you’re out of business!
Beware of Tunnel Vision
Imagine you’re a fisherman. You might be out in your boat, looking to catch red snapper all day long. You’ve spent long hours becoming an expert on catching snapper. Everything in your rig is set up to catch snapper. Your line, leaders, hooks and lures are all perfect for snapper. You’ve got four lines in the water where you expect the snapper to be running, at the depth you expect them to be running at. But the snapper aren’t biting today.
And a big, fat, prize bluefin tuna jumps in the back of the boat.
You’re a snapper fisherman. So are you going to push the tuna off the back of the boat?
Of course not! You’re going to put the tuna on ice. And you’re going to sell it at the market, so you can make your boat payment and buy diesel fuel.
And then you’re going to go back to being the best snapper angler on the Seven Seas.
See, you’re marketing to snapper. If an awesome tuna jumps in the boat, that doesn’t mean you lose your snapper niche. It just means you’ve made some money towards buying a bigger boat for snapper.
It’s great to have a niche. Focusing on a niche can really improve your ability to add value for your client’s lives. But don’t get so laser-focused on your niche that you turn away perfectly good business.
Take another example: Allen, a planner in Chicago, has long built his practice on advising airline pilots and other highly-compensated airline employees. He knows all the ins and outs of United Airline’s 401(k) plans and benefits package. He knows a lot about the compensation packages of some of the smaller carriers that hub out of Chicago, as well. He knows an amazing amount of detail about these plans off the top of his head. He knows airline stocks very well, too – and can advise clients on stock option exercise strategies and what to do with company stock. He gets a lot of referral business, and doesn’t have to spend a ton of money in mass market advertisements.
He’s the “snapper fisherman” of Chicago area airline pilots.
But if a client has an attorney friend who’s retiring in six months and needs help planning for a secure retirement income, is Allen going to turn that referral away?
No. Or at least he shouldn’t, and here’s why.
First, his niche with airline pilots is already secure and established. An occasional referral doesn’t change that.
Taking on an attorney as a referral from a client doesn’t force him to alter his marketing or advertising approach. Nothing changes. He just has more revenue, thanks to a new client.
The attorney fits nicely into existing work flows. The work Allen does for the retiring attorney is very similar to the work he would do for a retiring airline executive with no company stock. Allen doesn’t have to reinvent the wheel in terms of his own skill set in order to do the work. The attorney’s not a pilot, of course. But in this case, his financial profile is very similar to many of the airline pilots he works with.
The similar financial needs dictate that Allen doesn’t turn away this referral. The suitable product mix for a retiring attorney is very similar to the suitable product mixes Allen might recommend for a retiring airline pilot.
If you’re too focused on your specific niche, turning away a very good client because they aren’t a perfect one is a mistake. Especially if he can refer you to more perfect clients.
Now, in other cases, it might be best to politely turn down the client. For example, if the client is too needy, or if the client really needs a Medicaid expert rather than an investment and retirement income specialist, and you’re not a Medicaid or elder law expert, then throw that fish back in the water for another fisherman! It’s going to take too much time to become a Medicaid expert, and you’re better off taking that time and serving your existing, affluent commercial airline pilots.
Prospecting is a delicate balancing act. Watch this 2-minute video to learn how Don Connelly 24/7 can help you hone your prospecting skills and take your business to the next level.
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