Kitces: More is not merrier with this winning marketing strategy
Marketing is difficult in any business, but I’d argue it is especially challenging for advisors. Tasked with selling the invisible to consumers who can’t tell us apart — and who generally don’t trust us — it’s not surprising that many advisors struggle to effectively market their services.
Industry benchmarking studies show that most advisory firms only spend 1% to 2% of their revenue on marketing — an investment that may not provide any economies of scale until the firm has several billion of AUM. To the extent that they spend on marketing at all, most advisors tend to focus on events, where the marketing spend creates the opportunity for the advisor to create one-to-one relationships with prospective clients.
Yet as the fruitful ZIP codes became oversaturated, even the popularity of buying mailing lists to invite prospects to seminar dinners has petered out. And with ever-fewer unattached prospects — i.e., those who don’t already have an advisor — it’s harder still to continue growing a client roster.
The end result is that most advisors attract the majority of their new clients via referrals from existing clients. That’s not necessarily because referral marketing is a best practice, but simply because when most advisors spend little to nothing on marketing, it’s the only thing left that could possibly lead to account growth.
Yet given most advisors advertise themselves as generalists and compete on the breadth, rather than the depth, of their services, they simply won’t market their services as effectively as they could.
This is precisely why targeting a niche can be so beneficial. When the advisor zeroes in on a narrow client band, it’s much easier to identify specific, cost-effective strategies to market to and reach them.
Formulating a plan: Consider how a niche marketing plan might develop to reach one group: architects.
According to Glassdoor.com, the average income of an architect is almost $80,000 per year, and data from the Bureau of Labor Statistics indicates that the top 10% of architects earn more than $130,000 per year. Of course, entrepreneurial architects have the potential to earn even more. So architects certainly have the means to hire an advisor and pay for advice.
The starting point of a savvy marketing plan might be exploring what architects read. Of particular note is Architectural Record, a magazine that covers both the art and business of architecture, along with the blog EntreArchitect, which helps architects trying to build their own small firms. Would either of these online or print publications accept a guest post or contributing article on a financial topic? Do either have options for advisors to buy advertising that targets the audience? What about a guest appearance on the “Business of Architecture” podcast?
Alternatively, you could start your own blog for architects. Consider topics that might be important to them. Perhaps it’s how to offer employee benefits in a small architectural firm, or how to make partner in a large firm. Could you learn and then share insights into how succession planning works in an architecture firm, or how to structure a buy/sell agreement? What about the dynamics of running an architectural business, and benchmarking results?
Many of these scenarios presume that money is in motion. Qualified professionals clearly need this advice. What’s left to do is establish yourself in the community, and begin to network and find centers of influence.
The largest architectural trade association in the U.S. is the American Institute of Architects, with over 250 local chapters and more than 90,000 members. Another option is the Society of American Registered Architects, which has a handful of chapters in some major metropolitan areas as well. Both have membership options for so-called professional affiliates (i.e., non-architect service providers). This distinction opens the door to attend meetings, volunteer on committees and generally begin to network.
Once within the organization, it’s also feasible to begin identifying who the real centers of influence are — the people who command respect in the community, and from whom a referral or recommendation would be worth its weight in gold. What might you do to reach them? Find them at networking events? Reach out to engage in a partnership? Offer to be a resource?
You also might look to organize your own event, and invite influencers as an opportunity to give them further exposure — and in the process, give you exposure. Could you organize a specialized conference in your niche, or a pre-conference workshop in conjunction with one of the associations or other industry tent-pole events? Could you create your own awards recognition program for architects, or some subset of service providers, giving everyone involved something to talk about?
An even better approach is to attempt to become an influencer yourself. Perhaps you could study some financial aspect of the business and publish the results in a white paper.
Crafting the plan: Realistically, no advisor is likely to pursue all of these marketing channels at once. That’s why it’s smart to strategically choose a few to start, and plan to add more later.
Our hypothetical advisor might decide that his ultimate goal is to do planning for experienced and successful architects who built their own architectural firms and who are looking to retire out of the firms they built. Similar to planning, architecture is something that experienced practitioners can do well into their later years with a small subset of clients that they enjoy working with.
As a result, the advisor decides to focus on architects who want to retire into their practices, harvesting the value of the business they built with an exit sale or internal succession plan, where the architect continues to work part time as a consultant to the firm he sold.
Accordingly, the advisor begins to work on his niche marketing plan to reach retiring architects.
The first step is to build a website for architects who want to retire into their practices. The advisor then starts a blog where he begins to write about the philosophy of retiring into your practice, and the benefits of being able to maintain a continuing stream of income. Eventually, the advisor will collate the first two years’ worth of blog posts into a book for retiring architects.
Then, he begins finding affiliated professionals who can help facilitate the internal succession plans or external acquisitions that would be necessary for an architect to have a liquidity event, including banks that do lending for architectural firm succession plans; consultants that can help structure the deal; lawyers who are experienced at drawing up the terms and accountants with experience doing valuations of architectural firms. These experts are invited to contribute guest posts to the advisor’s new blog in their respective domains of expertise, as it all applies to architects retiring into the practice.
Once the blog is humming, the advisor joins the AIA and begins attending meetings at his local chapter, and volunteers for the membership development committee. Volunteering also gives him additional opportunities to start building relationships with some of the key influencers in the local chapter.
Next, the advisor offers to present his retirement strategy thinking to a local AIA chapter, with the hopes that if it goes well, he can begin to offer the presentation to some of the other 250 chapters, and begin to network his way further around the association. If the presentation is popular enough, he’ll try to pitch it to the national conference next year.
Meantime, he distills a sample of this work into written form, with an eye toward writing a quarterly column on the topic with leading industry trade publications.
Additionally, the advisor begins to develop a survey on part-time consulting work of experienced architects, an area that has never before been studied. What is the typical age of experienced architects who later become consultants to their old firms? Are they paid a retainer fee or an hourly rate? What kinds of projects do they usually engage with? How many hours do they typically work?
To broaden the reach of the survey — and to have a better place to publish the results — he also reaches out to two mid-size architectural trade publications with a healthy mailing list, and offers them each one exclusive article write-up about the survey results and subsequent white paper, in exchange for the opportunity to send the survey to their mailing lists.
The end result: an entire full-year marketing plan for this new advisor niche, with far more detail and specificity that the typical advisor’s marketing plan. Once there’s a clear target niche, it’s suddenly much easier to identify the tactics and targets for your marketing efforts.
The two-hour plan: The caveat to all of this is that you need to identify your niche before trying to understand the most important issues to people within that niche. You also need to formulate a clear value proposition that is actually relevant to them.
With that foundational work done, formulating the marketing plan to reach prospective clients simply entails deciding which of the various available strategies are most appealing to the style and approach of the advisor.
At a high level, prospective niche marketing strategies include:
Creating your own content platform: A content platform, where you both demonstrate your expertise and invite people to engage with you, should be the central hub of any inbound niche marketing strategy. In a world where most advisors can be successful with no more than 50 to 100 core clients, your platform doesn’t need to have broad reach. Just building a platform that can narrowcast deeply into your target audience can be more than enough. Depending on your content style, the platform could be a written blog, a YouTube video channel or a podcast.
Contributing content to build awareness: Once you’ve built a hub to showcase your expertise, it’s time to get the word out. This means sharing and distributing your content on other platforms where your niche audience can be found, to lead them back to your website. This could mean submitting articles to industry trade publications, a guest post to other industry blogs or an appearance on an industry podcast.
Building your network: People do business with people they know, like and trust. Consequently, you have to get involved in the community you’re targeting.
Choose an association to join, whether local or national, or some other community group. And don’t just join — it’s crucial to volunteer, because that’s when you really begin to form relationships that can ultimately support you and get a referral stream going.
At a minimum, be certain to start showing up for any kind of networking events the organization offers, so you can begin to make connections.
Finding centers of influence: Establishing relationships with key influencers — the people in positions of power or visibility who may be able to drive significant referrals or other opportunities for you — is equally important. Begin to identify whom the key contacts are in your target niche.
Traditionally for advisors, these individuals were attorneys or accountants who could refer. But in a niche, the best contacts may be completely different. It could be leaders of associations or volunteer groups. It could be an influential columnist or blogger. It could be key consultants who are themselves viewed as thought leaders and whose recommendation would cast a favorable halo effect on you. For instance, one advisor targeting doctors found a powerful ally in the administrator who runs one of the more popular blogs and forums for doctors seeking financial advice.
Attending conferences and events: A natural extension of the networking process is to seek out national conferences and events. Initially, you might simply be there as an attendee, but this also provides a chance to see how the event organizers structure the content and agenda, and to better determine whether an opportunity could arise in future editions to speak about your expertise.
Alternatively, if you can’t find an event in your niche that is worthwhile or accessible, consider creating your own event and working to attract people to it.
Engaging in thought leadership: One of the best ways to establish yourself in a niche community is to position yourself as a thought leader — someone who can provide unique insights and perspective. The fact that you approach the niche as an advisor — in a niche where there probably aren’t very many other “financial people” — provides some immediate opportunity. But the key is not merely to push out what you already know, but to teach your target audience something about its world.
For instance, if you’re targeting professionals in a particular industry, you might gather data and publish a benchmarking study on how to run their businesses more efficiently — or perhaps instead a subset of their business. Or if your niche is divorcees, you might publish a white paper on the top financial issues to consider in the first year after divorce. If your niche is consultants in a particular industry, you could publish a white paper on what it takes to transition from being an employee to a consultant in that industry, or how to set up your own personal consulting business.
Advertising: As noted earlier, benchmarking studies indicate that the typical advisory firm only spends about 1% to 2% of revenue on marketing, much of it targeted on activities like client appreciation events rather than outbound advertising.
Yet arguably one of the primary reasons that so few advisors spend on, or find success with, advertising is because it’s so untargeted. Within a niche, the advertising can be much less expensive. Are there trade publications in which you could advertise? What about on a blog or podcast? Would it be worthwhile to sponsor a conference or similar event to gain the desired visibility in your niche?
Paying it forward: As you build your own platform and visibility, another strategy to deepen your marketing is to use your platform to pay it forward to others. For instance, you might invite outside experts to provide guest blog posts on your website, giving them an opportunity to benefit from your growing audience — and in the process, making them grateful and providing them with an incentive to return the favor.
Similarly, consider creating some kind of recognition award to celebrate successes in the community — whether it’s recognizing the best providers in a certain category or the most successful people in the niche. Indeed, they may want to use your recognition award in their marketing, which would give you the opportunity to gain visibility for your brand based on their promotional efforts.
In fact, this is why many organizations sponsor various types of industry awards events and programs; it’s actually a good opportunity for the organization that provides the award to get visibility.
Of course, most advisors will not pursue all of these strategies — or at least not all at once. Nonetheless, once a specific target niche is selected, it’s often relatively easy to identify initial marketing targets and tactics in just a few hours of online searching. That exercise effectively kick-starts the advisor’s marketing plan and begins filling in the blanks for each of the desired strategies.
It is so much easier to formulate a marketing plan once you’ve narrowed your focus to reach a specific niche clientele or other target market. Identifying specific marketing channels tends to bring costs down and potentially offers a much better return on investment for your marketing dollar.
So what do you think? What is your current marketing plan? Do you think it would be easier to establish one if it were targeted to a particular niche? Have you found any marketing tactics to be particularly effective with an advisor niche? Please share your thoughts in the comments below.