Establishing a Niche Market
It is important for agents and advisors who specialize in specific products or services to establish a niche market. This article provides you with the information to help you as you begin to establish your own niche market. Nine steps are explained in further detail, so you will be able to create or improve how you articulate your business.
Estalishing a Niche Market by Bryce M. Sanders
The steps outlined in this article should come in handy as you build a niche market.
Sales coaches often start conversations with their clients by asking them questions like: Who are your best clients? Do you have other clients who do similar jobs? How did you get them? These coaches often advise their clients to identify a type of client they already have and like, and then specialize in products and services that cater to that type of client. All of us are comfortable with this line of thinking: If you need brain surgery, you want to work with a brain surgeon, not a doctor who is a family practitioner. Likewise, when a new medical practice realizes it needs to establish a retirement plan, it would prefer to work with an agent or advisor who specializes in working with medical professionals.
So now that you understand the thinking behind the need to develop a niche market, where do you start in building one? Let’s assume you’ve already read Tom Stanley’s book, The Millionaire Next Door, and know the basics of that book. This information should help you as you work to establish your own niche market.
Here are some steps that will make the process easier:
1.Identify clients in the niche market. You’ve decided you like certain clients and want to work with people who are just like them. Who are these clients? Do you know some better than others? Homework: Develop a list of clients who fall in this niche market.
2.Learn about the industry you wish to target. Each field has certain characteristics that make it unique. For example, people in law enforcement may retire early, often embarking on second careers. Academics might work as consultants and do additional research, and medical practices might require substantial investments in technology.
Homework: What do you already know about your target market, and what can you learn from online research and published articles? Ask your best clients to discuss the challenges of their practice and learn from them.
3.Get the proper licensing and certification. What professional qualifications do you need to operate successfully in your desired niche market? If senior executives in your target field often work with stock options, do you need your Series 7 license? FINRA alone lists 163 professional designations, 73 of which start with the word “Certified.”
Homework: Start acquiring your licenses and designations right away. If you are positioning yourself as an expert, someone will ask about your qualifications.
4.Ask for advice. Since the 1980s and 1990s, PSB Training has suggested that advisors who are pursuing a niche market pose this question to clients in that market: “If you were in my place, how would you go about it?” If they answer this question, you are getting expert advice from an insider. Keeping them up-to-date about your progress often allows you to gain “buy in” as you move toward success.
Homework: Determine what you want to accomplish. Assemble a list of questions, meet with clients individually, ask them those questions and spend most of your time listening to their responses. Take lots of notes and send them thank-you cards later.
5.Join professional associations. Conduct an online search of professional associations to identify the group that is right for you. Ask your clients what trade group they belong to and visit the websites of those groups. Some of these associations might offer associate memberships to people who are not employed in the field.
Homework: Join the group, attend their meetings, and learn the lay of the land. Spot opportunities such as speaking at dinner events. Expect to spend some money on these associations and become a worker bee.
6.Build a prospect list. Years ago, only one of 20 professions required members to have a professional license. Today, that number is closer to one out of three. This data is usually public information and is often free. Use it to develop your prospect list.
Homework: Build your list of prospects, including their names, home addresses and phone numbers if possible. Divide this list into smaller lists of 10-15 names, based on the firm, neighborhood, etc., of the prospect. To find out who these people know, sit down with each of them. For example, show the doctor at ABC Memorial Hospital your shortlist of doctors from that hospital and ask him if he knows anyone on that list. Tell him that that is the type of person you may be able to help or would like to know, and ask him to introduce you to that individual. Homework: During this conversation, make sure you show only one short list—your source will be overwhelmed if you produce 1,000 names at once.
7. Explain why they need to talk to their peers on your behalf. Coach them on how and why they need to have a conversation with their peers. Ideally, the prospect you are targeting has a need or is experiencing a life event, such as joining the medical practice. Another approach is to look for people who complain— they are usually open to hearing about solutions.
Homework: Don’t just ask for referrals and don’t give them a script. Instead, suggest the rationale for your conversation verbally--perhaps by reminding them of a problem you helped them address.
8.Offer to write for publications that are read by people in your niche market. Tom Stanley, whose book was mentioned earlier, says that advisors should write for trade publications that are read by the clients and prospects in their niche markets. Take this advice and start writing, but get approval from your Compliance Department first.
Homework: Assuming that your Compliance Department approves, ask editors if you can submit free articles. Learn about industry issues reported on the publication’s website or magazine before you start writing.
9.Repeat the process. Remember that this is an ongoing process. New professionals enter the field, people retire and their needs change. Layoffs and reorganizations occur, opening up rollover opportunities for you.
Many agents and advisors have become successful by focusing on a niche market. When word spreads that you are an expert in a particular field, referrals should follow, and your practice should thrive.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financialservices industry. His book “Captivating the Wealthy Investor” is available on Amazon.
This article appeared in Advisor Today