Higher Profitability with Niche Marketing
"Choose the niche that you enjoy, where you can excel and stand a chance of becoming an acknowledged leader." ~ Richard Koch
Niche marketing is more of a context for marketing, rather than a marketing approach. Niches represent a specific pool of individuals who are targetable prospects. These individuals tend to share similar challenges often unique to the group; they represent a business opportunity and should complement your strengths and personal interests. Examples of niches with these characteristics are general dentists and general medical practitioners (e.g., GPs or internists).
These professions tend to be tied to a chair or examination room and have appointments back-to-back in many cases. Medical and dental insurance puts stresses on incomes resulting in high and/or growing patient loads. These niches represent a business opportunity because their income is well above average. It would be helpful for advisors to have the experience of having worked in the field or to have clients already in these fields so that they can understand their pain points and concerns.
Niches generally respond predictably to marketing activities and financial solutions. Many advisors have targeted physicians. However, physicians can be challenging because of their self-confidence. They are also a challenge to get time from, yet they have been sought after.
Niches must be narrowly defined (e.g., not doctors, but anesthesiologists or gastroenterologists or radiologists). Individuals in narrowly defined fields:
- Tend to share a common culture.
- Share affinities.
- Read the same professional journals.
- Attend the same meetings or conferences.
- Have more of a tendency to know others in their sphere.
Niches need to be active communicators and be affordably accessible.
Women are not a niche, retirees and pre-retirees are not niches. The commonality among women, retirees, and pre-retirees is not there. There is no single common culture, no common way to access them, and there is no shared affinity as a larger group. If, however, you narrow the focus to women executives in your geography . . . or to IBM employees retiring from New York or Austin, Texas . . . or, for that matter, to women retiring from IBM in New York City, you have defined niches.
Seek Introductions Within Your Niche
In some cases, COIs specialize in the same niches in which you may be interested, so you can use your COI marketing strategy with them. You can focus your LinkedIn searches on specific professions or organizations.
If you hold intimate events, you can invite a client to dinner and ask her to bring one of her friends in that same niche. Putting people into groups can create a feeling of proprietorship and relationship with that group. This feeling is an important element to your business development efforts. It can make you feel a level of comfort and confidence as you move forward. You have made an investment in the group and the individuals in that group.
Invest in a Niche.
Prepare yourself to work with that group by:
- Reading about the group in publications they may be reading,
- Understanding their demographics and psychographics,
- Interviewing group members and COIs who work with them,
- Joining their organizations, and
- Networking with them.
In addition, identifying group members who may be prospects and researching them will also prepare you for marketing to the group and individuals within the group.
Profitability from niche marketing can be higher because:
- Marketing costs are lowered,
- The prospecting is easier,
- The pipeline is larger,
- The closing rate is higher and quicker because of natural trusted relationships, and
- The referral flow is better because of word-of-mouth.
Commonality within your marketplace makes you the master of the trade and enables you to spend your time better and be more focused. However, for a niche to be productive, it must generally have at least 200 to 300 prospects in your access area that are well-to-do and well positioned from an income perspective. Most important, you should have a level of comfort in working with the selected targets.
Getting Started With A Niche
- Select two or three niches that fit your business, that you like, and where you have an “entry point” via contacts and/or knowledge to leverage practitioners or employees (e.g., law firms, medical/dental practices, firms you have previously worked for)
- Read about the group in publications, understand their demographics and psychographics.
- Interview group members and COIs who work with them.
- Join their organizations.
- Network with them
- Identify group members who may be prospects and research them.
From a marketing perspective, niche marketing allows the advisor to become an expert in how to reach prospects in the niche rather than relying on a more helter-skelter, one-off approach to finding prospective clients. It also allows you to develop a marketing plan tailored to that niche based on in-depth knowledge of the niche’s wants and needs. A custom-designed approach enables you to leverage your marketing efforts to reach prospective clients in that niche.
From a planning perspective, niche specialists leverage their time and solutions by offering the specific financial needs of the niche, so you become an expert in the financial products or services to meet them. You do not need to know everything about all the solutions the business offers but need to know well how to meet the needs of the niche.
Since niche members tend to know each other and interact, the goal is when their talk turns to investing, your name comes up as the expert and the “broker of record” in the selected niche.