Do Your Prospects Know If You Are the Right Advisor?

I once asked a group of about 700 advisors whether a prospective client would know if he or she was right for their business, based on a visit to one of their websites. The response was the data equivalent of uncomfortable silence and shuffling of feet.

It got me thinking, as these things do. Was the issue with the messaging on their websites or was it more fundamental?

Was the issue, in fact, a lack of definition around who the ideal client was in the first place?

Your prospective clients will never know if you're the right advisor, if you don't know if they are the right clients for you.

While a relatively high percentage of advisors say they have defined their ideal client, the work is often incomplete. It's not that hard to define your ideal client. However, it’s much harder to use that definition as a filter for new clients and to take the actions necessary to build a business around the needs of that client.

Why Worry About Defining Your Ideal Client?

Defining your ideal client and building your business around that individual matter because:

  • When you focus your time and energy on the clients for whom you can do your best work, you trigger meaningful growth
  • You differentiate yourself from other advisors when your business is built around the needs of a defined client
  • Life’s too short to work with people who drain you of energy (or maybe that's just me)

5 Steps to Defining Your Ideal Client

There are five steps to getting all of this right.

  1. Define the work you love to do
  2. Define the characteristics of your ideal client
  3. Assess the fit and opportunity
  4. Define your client acceptance criteria
  5. Assess impact and define new processes

Step 1: Define the Work You Love to Do

Define the scope, depth or type of work that energizes you.

Defining your ideal client starts with you and the work you want to do. Let's face it, ideal clients wouldn't be very ideal if they didn't need or value the work you are passionate about delivering. To create clarity on this issue, start with a simple question. When was the last time you were completely energized by the work you were doing? Keep that answer in mind and ask yourself if you were energized for any of the following reasons:

  • The type of work you were doing (e.g., investment management versus financial planning)
  • The complexity of the work (e.g., sophisticated insurance planning for business owners)
  • The scope of the work (e.g., narrowly defined versus comprehensive)
  • The situation of the client (e.g., helping a client through a divorce)
  • The needs of the client (e.g., working with a client on legacy planning)

You may have been energized for completely different reasons than those listed but it's a place to start. Define the work you love and ensure your ideal client is a target for the work you've just described.

Step 2: Define the Characteristics of Your Ideal Client

Identify the characteristics of the clients for whom you can do your best work.

Ideal clients meet three criteria:

  • they value the work that you want to deliver
  • they are a good fit for your offer
  • they energize and inspire you

Before going on, I'll digress with a quick definition to distinguish between your target client and an ideal client. Your target clients describe the potential population of people who are right for your business. Your ideal clients are a subset of your target market. They are the right fit for the work you do and have the qualities and characteristics that energize and inspire you.

The descriptors of your target audience might include: geographic location, professional, industry, gender or age. However, to get to the ideal subset, you'll want to apply two filters.

1. Which clients are the right fit given your offer and approach? This might include:

  • Minimum assets
  • Investment philosophy
  • Willingness to put all assets with you
  • Willingness to work with the team

2. Which clients are the right fit for you, personally? This might include:

  • Values
  • Personality
  • Communication style
  • Approach to life

If you need some help in getting specific on your ideal, here’s a quick exercise. Start by thinking about a few clients who drain you of energy and a few you love to be around. Write down why you thought of each of those clients and you’ll get close to your ideal.

Step 3: Assess Fit and Opportunity

Assess if your ideal client definition fits with your goals, identify potential gaps and ensure those clients represent a significant opportunity.

Once you have defined your ideal, you can ensure you’re on the right track by answering three questions:

  • Do I have a passion for working with these clients?
  • Are there any gaps that I need to bridge to work effectively with these clients and is bridging those gaps possible? (For example, there could be a gap related to specific expertise, brand or technology.)
  • Do these clients represent a significant financial opportunity?

Step 4: Define Your Client Acceptance Criteria

Clarify the clients for whom you will or will not work.

At this point you might wonder how you'll use this definition of your ideal client. To link your definition to concrete action, it's important to recognize that there's a big difference between a preference and a deal breaker.

Your deal breakers define your client acceptance criteria, so establishing those is a logical next step. To a great extent, this step tests how serious you are about working with your ideal client. Simply stated, your client acceptance criteria will answer the question: Is the client right for the business?

Once that has been established, segmentation kicks in to help answer a different question. How right are they?

In order to define your client acceptance criteria ask yourself the following question. What aspects of my ideal client definition, if not met, would cause me not to work with a prospective client?

If your answer is none, go back to Step 1 because you aren't being tough enough with your definition. This step forces you to determine if each part of your ideal client definition is truly a deal breaker or simply a nice-to-have.

As you think about your client acceptance criteria, you'll run into a harsh reality. Can you reasonably assess if a prospective client meets your definition of the ideal client? Creative questioning should take you a long way, but you may find that some of things you are seeking don’t emerge until you are deeper into a relationship.

Step 5: Assess Impact and Define New Processes

Identify and define any changes that need to be made to the business to support working with your ideal client.

The final step is to assess if, based on your ideal client definition, anything needs to change in your business. That might include processes such as on-boarding, client reviews or the scope of client reporting. It might include other – sometimes substantial – changes. Those include updating your website to make your ideal very clear, upgrading your credentials or refining your client communication process. This is where courage lives.

Let Prospects Know They Are Home

Your ideal client is very much about how you run your business because it leads you to define client acceptance criteria. However, the process is as much about the message you send to the outside world and the extent to which prospects can see themselves in your description of the ideal.

Get it right and prospective clients will know they are in exactly the right place for them. Defining your ideal may take some time but you’ll find it will put you on the path to growth and deeper personal engagement.

Related: Your Clients Aren’t Your Marketing Team