CHICAGO — “It seems as though you’re saying that word-of-mouth influence and niche marketing are one and the same,“ Andy remarked as a segue to his question, “But is niche marketing all that it’s cranked up to be?”
Word-of-mouth influence and niche marketing are not synonymous, but they do have a cause and effect relationship. The more an advisor works within a niche, the faster that word-of-mouth influence travels. This was highlighted in our 2018 Advisor Research, where we asked 980 financial advisors about their marketing. We discovered that:
- 71 percent of those bringing in $20-plus million in new assets per year have a niche that represents 25 percent or more of their revenue.
- 48 percent of those bringing in $20-plus million in new assets per year have a niche that represents 50 percent or more of their revenue.
- Word-of-mouth influence was the most effective marketing strategy.
The data shows that niche marketing is a core focus of elite advisors and that word of mouth is the primary way their niches grow. Great to know, but which niches bring the most riches? Here’s a rank order of the most common niche markets for that $20-plus-million group:
- Business Owners
- Specific Company
- Religious or Ethnic Group
- Next Generation
- Military Veterans
- Professional Athletes
This list isn’t rocket science. You’ve probably got most of these types of clients in your book of business already. So let’s explore the steps of how niche marketing can play a bigger role in your business.
Step 1: Identify your primary niche
The majority of our survey respondents identified their primary niche through their existing clients. It only takes a handful to begin developing a niche. Start by looking for similarities within your top 25 clients. For instance, if you have five physicians within your top tier of clients, start with physicians.
Step 2: Become an expert in your primary niche
Nearly half (47 percent) of our respondents claim they developed their expertise from their clients. This requires asking questions, uncovering the specific needs of this group, learning their lingo, and so on.
Step 3: Develop an advocate
This is easier than most advisors realize. How so? If a client has helped you gain expertise in your niche, there’s a good likelihood they’re willing to serve as your advocate within this community.
Step 4: Get involved
The idea is to be seen, to become one of them. Get involved in the charities linked to your niche. Host events, social or educational, that are appealing to your niche. This is what accelerates word-of-mouth influence.
Step 5: Source names and get introductions
Sourcing names and personal introductions within your niche, just like outside your niche, are the core activities in affluent client acquisition. The difference is that within your niche word-of-mouth influence travels faster and your advocates will be more proactive getting you in front of potential prospects.
You too can reap the benefits from word-of-mouth influence working on your behalf. Go for it, use these steps as a roadmap to develop and/or strengthen your primary niche.
Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing, and Retaining Affluent Clients. www.oechsli.com.