How advisors are finding like-minded clients.
As a former engineer, Tom Horton, president of Horton Financial Planning in Shelby Township, Mich., has found a natural niche among engineers and technical managers, primarily in the automotive industry. "As a career-changing engineer, I market mainly through acquaintances and my university alumni association," he says.
When Horton entered the financial planning field at age 49, established planners warned him that engineers would make terrible clients. They said that engineers were "too anal, they want to see where all the numbers came from and want to analyze the plan themselves," he says. "Then, I would admit to being an engineer, and their faces would turn red."
Horton says he's found the opposite to be true, perhaps because his clients know him as an ex-engineer. "They seem very comfortable with a high-level overview of where they are and what it will take to get them to where they want to be. They are impressed that I use my own spreadsheets to do the analysis work, rather than a commercial software package. Like me, they want to know that the numbers are accurate and have been analyzed correctly. I have never had an 'anal' client (knock on wood)."
Each client in a new facility has become a source of referrals, especially when layoffs and early retirements sweep through that company. After two years in business, Horton says the lesson is to work with people like yourself. You want to feel comfortable with them and they with you. Once you've found your niche, concentrate your limited marketing time on it alone. "I wouldn't turn away other clients, but I no longer look for them," Horton says.
Now that Horton has become known as the engineers' go-to guy for financial advice, his marketing strategy consists of stimulating referrals and staying active in the organizations to which the people in his niche market belong. Writing for their publications, attending business functions, and placing an occasional ad are all he needs to do to keep his pipeline full.
Get Niched--Drill into a Profession
Niching yourself makes sense--no matter which niches you choose (you might want to mine one or two at a time). Lucrative niches include doctors, lawyers, medical professionals, professional athletes, executives within a large company, non-profits such as community foundations or the United Way--and yes, even engineers.
Smart advisors will find and specialize in serving small but profitable market segments. For big advisory companies, these market segments are often too small to serve profitably, but for small or midsized companies (a description that fits most financial planning firms), serving unique market segments can be profitable indeed. Niche marketers (and service businesses in general) often rely on the loyalty of key clients to maintain profitable sales and/or service fee volume. While breaking into a niche may be difficult, once you are established as the go-to expert for that particular group, you can rely on word of mouth supplemented by traditional but targeted marketing activities such as ads, client/prospect dinners, participation at key charitable events, focused networking, and PR tactics.
Getting a toe in the door is often the first step. Turn off the phone and e-mail and get out a note book and pen--or type up a list on your computer. Get focused and brainstorm alone or with your team. Who do you know in various niches in your community? How can you get an introduction to the right people? Who are the right people? Now outline your plan of attack and faithfully execute it.
Beyond Professions--Think Affinity Groups
Think beyond "just" professions, such as doctors, pro athletes, and engineers. Think about all the "affinity groups" that exist in your community.
Do you ride a Harley Davidson? More and more school teachers, executives, and affluent individuals do, too. How about contacting the owner of the local Harley Davidson showroom and suggesting you co-host an evening or weekend event? Dan Danford, an investment advisor in St. Joseph, Mo., has done just that. He and the owner will co-promote an evening event with light refreshments. He'll talk about boomer lifestyle choices and making sound financial decisions. The shop owner will invite folks to stay and talk on the showroom floor. Danford will also give everyone who attends a complimentary copy of Lee Eisenberg's book, The Number: A Completely Different Way to Think About the Rest of Your Life. An alternate title might be Mitch Anthony's The New Retirementality.
Think about all the associations in town. How can you niche market and penetrate those circles?
Ron Kelemen, who lives and works in Salem, Ore., wanted to go after doctors. His strategy? Join their association, write for their publications, become one of the sponsors of the new doctor welcome dinners, place attractive ads in the newsletter they read, and submit his firm for inclusion on the "Best Advisors for Doctors" list that Medical Economics magazine puts out. He even subscribes to (and reads) Medical Economics--and is sure to keep issues of the magazine in his lobby. That way when doctors come in for an initial or subsequent meeting, they can clearly see Kelemen's commitment to understanding and serving their profession.
According to Kelemen, it's imperative you speak their language. You must understand the market's "hot buttons" and be prepared to communicate with the target group as an understanding member--not an outsider.
If you'd like to drill down and explore connecting through associations in your community, a free resource to try is www.weddles.com/associations/index.cfm.
Consider Ethnic Ties and Family Roots
Niche marketing can be cost effective, too. If you are a part of a certain demographic or ethnic group, you understand the group's culture and needs.
Advertising on ethnic radio stations or in targeted print publications, which have considerably lower rates than stations that program for broader audiences, could be a cost-effective way to get the word out. The goal is to stretch your marketing budget to enable you to advertise with greater frequency or to use a more comprehensive media mix.
Art de la Rosa, a financial planner in Diamond Bar, Calif., is targeting the Hispanic community and the middle market working class through a series of seminars, mailings, and ads. Last year, he self-published a book called Wealth Grows When Your Cash Flows, a workbook he sells via his Web site. He also uses the book at his seminars. Better yet, the book bolsters his credibility.
"People are impressed when they see I've authored a book," says de la Rosa. His Five-Minute Daily Financial Planning Workout promises to "help you save thousands of dollars each year, plan better, and turn your money into wealth." Fliers, ads, and mailers show young Hispanic families reading or studying the newspaper, playing with their kids, or looking at a stack of bills. Headlines range from "Worried About Running Out of Money?" to "What Would Happen if Your Paycheck Stopped?"
"I've been very successful with this approach," says de la Rosa, who was recently featured in local newspapers. While the articles were great publicity in and of themselves, the eye-catching photo of de la Rosa holding his book up and looking into the camera, along with the headline "Living Proof of Planning" made the article especially useful in future ads and mailings.