When to abandon a niche practice
Advisers have two choices when it comes to marketing – pick a niche or be a generalist.
When they go for the niche approach, planners must use a variety of approaches to reach their target market. Content is written around specific planning needs, investment approaches can be designed with that market’s specific life and career stages in mind and the adviser’s language may change to include some of the target audience’s native vernacular.
But in being a generalist, marketing creation and dissemination becomes a shotgun approach. Material is applicable to almost everyone. The message and content of the adviser are distributed everywhere in hopes that they stick somewhere. The message can be appealing to a wider audience, but the adviser looks like every other adviser trying the same approach.
As an introvert and someone who generally avoids awkward social situations, I find it difficult to go out and meet teachers I don’t know.
Still, a niche approach may not always be the best option, either. What happens when that niche doesn’t respond? Or they respond, but the conversion of prospects into paying clients doesn’t provide a reasonable ROI? Should you keep going, or move on to another market?
I have faced this problem in my practice over the past 12 months. I’ve been marketing to K-12 educators in Illinois for the past four years. While I’ve reached many in my target market and they are aware of who I am, the conversion of these leads into paying clients hasn’t resulted in the business I need.
IS IT THE TARGET MARKET, OR ME?
In my situation, I believe the problems come from a mixture of both the target market and my own practice management. I’m trying to reach a market whose members, on the whole (and I don’t want to generalize), don’t believe they have a problem. Teachers in Illinois have been told that, as their pension has been manhandled by state government, all problems in their financial future are a result of this and they have no control of the outcome.
But when certain Illinois teachers can earn over six figures by their early 40s, they have a lot more control over their situation than they realize. Some have recognized this and reached out for guidance, but many choose to rely on their 403(b) agent.
I have also contributed to my lack of business success. As an introvert and someone who generally avoids awkward social situations, I find it difficult to go out and meet teachers I don’t know. Writing and content generation are my forte, and this does attract some potential clients, but I feel my efforts could yield better results with more face-to-face situations. I know this hurdle won’t disappear with a different niche market, but having one whose members understand they need guidance may make things easier.
For advisers in this situation, if you didn’t do adequate market analysis on your niche before figuring out your target market, now is the time to do it.
- Does your niche have specific needs, and enough to build a continued marketing campaign around?
- Will they understand how you can solve their issues better than anyone else?
- Is the adviser marketplace for this demographic saturated already (e.g., doctors), or is it being underserved?
- Will your pricing structure be affordable for them, or even suitable for them? (For example, if it’s a pension-heavy crowd, having an AUM model may not serve you well.)
If you happened to build your campaign around a market that doesn’t need financial advice, or at least believes they don’t need it, that may have been some poor planning on your part. If it’s a market that needs specialized advice but your content and brand haven’t reached them, maybe you need to examine the tactics you’ve been using, and change strategies.
TO PIVOT OR ABANDON?
Leaving one niche behind is foolish if there is not one waiting to be tackled.
An important question that needs to be addressed is whether you should abandon your target market completely and go in another direction, or reduce the amount of marketing you’re doing to them, in order to focus on new activities in a new market.
I wrestled with this decision for less than a minute. I love working with teachers. Other advisers in the same market say the same thing. Teachers can make the best clients and they have so much trust in the relationship that to abandon this market segment would be penalizing myself as well as them.
Knowing this, I chose to turn my RIA website, which also hosted my blog and bookstore, into just the blog and store. My RIA would move over to another site with a different branding message, but I would continue my efforts in educating and attracting teachers as clients.
But what if you decide to abandon your target market in favor of another, or to become a generalist? Giving up your previous marketing efforts and gained knowledge of a particular market segment should not be taken lightly.
First, examine what has led to this decision. Is it lack of business or a reduced passion for the demographic? If business isn’t converting, how many tactics have you tried, has it been long enough to see results and should you be exploring any other marketing options before throwing in the towel? Only by understanding the metrics behind your methods so far will you know if you have more avenues to explore.
If the passion has disappeared, I think it is wise to let this niche go and pursue another one. No client will want to work with an adviser who doesn’t truly care about them and their issues, and is just looking to add to the bottom line.
RUN TO A SOLUTION, NOT AWAY FROM A PROBLEM
Often, job seekers are coached to not leave a job without having another one lined up. The same can be said for advisers looking to change their marketing focus; leaving one niche behind is foolish if there is not one waiting to be tackled.
For myself, I am putting aside the focused world of K-12 teachers in Illinois. My new focus will be on a topic that every client I’ve worked with has faced, but also has a large emotional angle to it — retirement planning. My aim is to open up my client base to those who want impactful discussions on this topic, and who are interested in looking at the numbers associated with fruitful retirement planning. While still being a fee-only adviser using an hourly, retainer and robo adviser fee model, I believe I’ll be able to appeal to a larger segment of the market without leaving my first-loved clients behind.
If you make sure you’re always moving forward while also staying true to yourself, the journey is never a wasted one.
One thing I realized as I was working with such a specific niche is that, while I was valuable to those people, my hyper-focused RIA name (Finance for Teachers) was pushing some qualified clients away. As the only NAPFA adviser within a 10-mile radius of my location, I was losing location-specific business as I had niched down. For a new RIA where income is the main goal, that seemed to be counterintuitive to making it long term as a business owner.
If you are wrestling with changing your marketing focus, don’t make the jump just yet. Seek to understand what your next approach will be, and learn from the experience you’ve just been through. Take some time to understand why this approach didn’t work, and what you can take into another campaign. Aim to understand the kind of clients you want to work with now.
If you are moving from one niche to another, this needs to be accompanied by a story, so people can understand why working with you is better than working with another — and also why you made the change. Stories sell, so make sure yours is compelling.
NOTHING IS GUARANTEED
There’s no guarantee that making this change will solve your marketing and client-acquisition problems. I’m aware that, even with a complete rebrand of my RIA, I could still be looking for a job in another 12 to 24 months.
But that’s what we signed up for as business owners. and those seeking to sell a product to the public. We’re not guaranteed success, and many will experience failure. But if you make sure you’re always moving forward while also staying true to yourself, the journey is never a wasted one.
I’m looking forward to exploring a niche and marketing approach that is different from the one I’ve labored in for the past four years. It’s taken a while to not see this change as failure, but as a learning experience. I’m sure I’ll look back fondly on this change as my career progresses.
If you’re looking at following the same path, know that others have done it before and many will do it after you. Choose a new niche that means as much to you as the previous one, and put as much gusto into providing value to these new clients as you did for those gained previously. Who’s to say this pivot won’t be the defining moment of your career?