Working in a niche: Five things to think about
Written by Phil Bray on 09/08/18
I’m currently on holiday in Devon and a chance conversation with a stranger, as we shared a picnic bench on South Sands beach near Salcombe, (if you’ve never been, it’s gorgeous and highly recommended) led me to think again about one of our favourite topics; niche marketing.
We encourage all our clients to carefully consider the benefits of specialising in a niche and then develop a deeper understanding of their target market.
To their credit, most advisers and planners understand the concept, and many see the benefits. However, just occasionally, when we ask who they prefer to work with we get met with the answer: “Anyone.”
My response (usually with a smile on my face, although occasionally through gritted teeth) is something along the lines of: “Really? So, you’re happy to work with first time buyers in Aberdeen looking to save into a Lifetime ISA?”.
Cue backtracking and a conversation about the benefits of niche marketing.
Practice what we preach
Niche marketing isn’t something we heard about on a course and decided we could make a quick buck shouting about. It’s something we live and breathe every day.
As you (hopefully!) know, we are an agency specialising in working in financial services. Of course, necessity is the mother of invention. There are two things I know anything about: financial services and marketing. Deciding to start a business aimed at helping financial advisers and planners with their marketing wasn’t therefore a difficult decision.
Since then, we’ve stuck to our niche principles. Despite our ambition to grow the business, we only work in financial services (as well as aligned professions) and I can’t see that changing.
However, not all financial advisers and planners understand the benefits of working in a niche. If you can be counted in that number, you’re on the fence, or you’re a fully paid up member of the club and are therefore interested in the subject, here are six thoughts on the topic.
1. Working in a niche isn’t a weakness
In fact, it’s completely the opposite; it’s a sign of strength and confidence. You are so good at what you do, you don’t need to consider working with other types of clients.
2. People want specialists
If you are unfortunate enough to suffer from a bad back, the only reason to visit your GP is to get a referral to a specialist.
The same is true (or at least it should be) when it comes to your money.
Take Final Salary and Defined Benefit pensions: do clients want to take an irreversible decision based on the advice of a generalist, or a specialist who regularly advises on this area? Retirement is another case in point. Do clients want to entrust the next 20, 30, even 40 years of their life to a generalist, or someone who specialising in retirement planning?
My money is on the specialist every time; they have the in-depth knowledge and experience required to produce the best outcome for the client.
3. The fear of missing out
I occasionally hear advisers and planners suggest they don’t want to specialise fear of missing out on other work.
They aren’t. We are yet to come across a niche which isn’t big enough to satisfy the growth ambitions of the business owner.
There are numerous advisers and planners who a living proof that by focusing on a niche you aren’t missing out on other opportunities. In fact, you are becoming a true expert, a specialist, in the type of clients you choose to advise. And building a stronger, more sustainable business, for it.
4. Marketing becomes easier
Focusing on a niche allows you to truly understand your target clients:
- What they think and believe
- Their aspirations and fears
- Their problems and challenges
- How they communicate and the social media channels they use
That makes marketing easier. Once you understand and can visualise your target clients, it becomes far simpler to create a marketing strategy and plan. It’s also easier to develop your key messages, tone of voice and communication strategy.
It also helps avoid the “shiny new thing” syndrome, which sees those afflicted continually trying different things, just because they are new. “Does the opportunity fit my niche and is it consistent with my marketing strategy?” Two answers of “no” means you pass and crack on with your agreed strategy.
5. Your marketing ROI will increase
Marketing to “anyone”, without a strategy and plan in place, is a sure-fire way of wasting your marketing budget, increasing your blood pressure and leading to a general dissatisfaction with marketing.
Niche marketing allows you to focus your spending on the channels which are more likely to be effective in attracting your target clients. Take paid adverts on Facebook as an example. Working with ‘anyone from anywhere’ will see you spend significantly more on wasted clicks than a more targeted approach: for example, working with people over the age of 55 within 20km of your office. The same is true with Google Ads and almost all other forms of marketing.
Niche marketing leads to a more focused approach, allowing you to spend less to achieve the same, if not more, than a more generalist approach.
It’s not all about marketing
Working with specific types of clients has many other advantages aside from the benefits it brings to your marketing.
Personal development is easier, so is building your advice and investment proposition; the same is true when it comes to developing processes in your business. Furthermore, you won’t be creating the legacy problem that so many firms have; clients they have taken on but wish, perhaps years later, that they hadn’t.
In fact, I can think of almost no downsides to working in a niche.
It might mean putting your gut instincts to one side and a period of feeling rather uncomfortable, but hopefully we’ve convinced just one or two sceptics of the benefits of specialising in a niche.
We believe that doing so is hugely positive for your business. The reason so many don’t is usually a matter of confidence; either that they don’t have the specialist knowledge (this can be rectified), that they are missing out (they aren’t) or that for some other reason, working as a generalist beats being a specialist (it doesn’t).