Is It Safe to Expand My Niche?
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View Membership BenefitsBeverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Dear Bev,
We have a niche market focused on practitioners in holistic health fields. We have several clients who are chiropractors and acupuncturists, for example. Our minimum account size is low, $500k to start, and many in practices such as these have that much and more saved in retirement and non-retirement funds.
The issue of what this niche means to us has come into focus. We are debating whether to expand our niche or whether to expand at all. For example, is a physical therapist a holistic health provider, or a doctor who uses mostly natural medicines? We are in the process of revamping our website and accompanying materials and find ourselves facing this dilemma. It’s been very helpful to us in marketing to have clients in the field of holistic medicine. We have put on numerous events, shared detailed information about the work we’ve done in the field and have received countless referrals from existing clients to others they are connected to in the community.
Does it dilute our message to expand our niche to people who would not consider themselves holistic health professionals? Do we stay narrowly focused or find ways to enlarge our universe? In discussing this with a friend who is a physical therapist, she shared that many holistic professionals consider themselves to be in a separate class and talking to others outside of the market we are dominant in might be perceived negatively.
I am being pulled by our team as we figure this out. I understand the desire to capture as many opportunities as possible. But our focused niche has been successful for us and can continue to be so.
How narrowly do others define this? Could we enlarge our universe a bit without being all encompassing? We’d appreciate any insights you have on what others do in this area.
B.J.
Dear B.J.,
You are talking about one of my favorite topics – having a niche market and staying true to it. I applaud what you’ve done by identifying an area of need and marketing to that niche with specific tools, language and solutions. On many occasions, when I’ve talked about a niche with advisors, they have said they don’t want to be too narrow for fear they will lose out on opportunity. Or they say they are capable of handling almost every financial situation that may come along, so why should they not seek all opportunities available. It’s tempting to say you can be all things to all people, but it makes marketing much more difficult if the entire world is your niche market!
When you have a niche, as your team has learned, you can focus language, talk about the different things you have done for others like them, and tell stories about how you have helped a chiropractor or acupuncturist “just like them.” It allows you to connect immediately and show you both understand their needs and have dealt with many others living similar lives.
How narrow is too narrow? That is difficult to answer and depends on factors I’ll ask you to consider as you revamp your marketing approach:
- Do others such as the physical therapists you reference operate significantly differently from the acupuncturist? For example, are they both in private practice running their own firms or does one work for a larger organization where one runs their own business? Perhaps the messaging is more about the complexity of what they might be dealing with rather than the discipline they focus on. I doubt your approach works well for the chiropractor because they are a holistic healer. I’m going to guess it works because you understand the intricacies of what they deal with every day, how they bill and collect, what retirement plan options are available and so on. I would look at the underlying structure of the needs first and speak to this.
- Could your messaging be a more general “wellness” oriented one? If you were to speak in general wellness terms, not just holistic medicine, this would allow you to encompass the physical therapist or the doctor who may lean more toward organic medicine. It could be an opportunity to link a financial wellness message with a health-oriented message too. This way you are speaking the language of a broader group but still staying true to your core constituency.
- Will you offend or otherwise turn off your existing client base if you expand your messaging? This is important because while I might be able to suggest ways to enlarge your reach and stay true to your core message, your client base may find you have started speaking to people they cannot relate to and don’t understand. This could be challenging if you are getting referrals from your existing clients and people go to the website and find a mixed message there. I can’t answer this for you, so you want to consider the client seat. It’s possible you could gather a small group of clients and run a focus-session to ask them about the messaging and how they interpret what you are saying now compared to what you may consider using in the future. Sometimes going to clients is the best and most direct approach!
- Is it possible to speak to a couple of markets at once? In my business, for example, I have a deep connection with financial advisors. But I also work with many other financial services firms such as banks, retirement providers, asset managers and large investment firms. While what they do might be slightly different, much of what they are wrestling with as core to their business is the same. I can modify what I do to meet their needs. Is this an option for you? Could you have part of your website be devoted to the holistic practitioner and part be devoted to general wellness? Could you extend the messaging to encompass both without alienating the other?
You are in a great place to have identified this niche, to keep focused on it, and to be asking the important question about expansion and dilution. Consider the answers to your question from a couple of different vantage points including involving your existing clients in the dialogue. You could safely expand what you are doing and still stay niche-oriented, but explore it in depth before you make a final decision.
Dear Bev,
Decision by committee. It’s the way our firm operates. We are almost a full year into discussions about a new logo, new name and new marketing materials. I get the idea of collaboration and consensus, but I don’t get the desire to be unmoving.
We have people who talk to hear themselves talk. Once the talking is done, nothing happens until we get together to talk again.
How do I move this forward when I don’t own the firm and am not a major shareholder? I’m one of the senior advisors sitting at the table and I’ve ceased talking. It gets us nowhere and we have the timeline to prove it.
F.S.
Dear F.S.,
You’ve laid out what I often fondly refer to in my work as the “culture of nice,” wherein everyone is included, every voice is heard, no one pushes back on anyone else and decisions can be made only when everyone agrees.
You would think the culture of nice would be, well…. “nice.” But unfortunately, it leads to underlying considerations that lay dormant and don’t get addressed. You are raising one from your note. It sounds very nice to be making decisions by getting consensus, but unfortunately not all decisions can (or should) be made by committee. In fact, something like a logo or new name could be created by a few people and then rolled out in an organized and thoughtful manner to the rest of the organization. Because not everyone had a voice in creating them doesn’t mean they won’t embrace them.
What do you do if you are not in charge? That’s the stickier problem. If you bring up the problem caused by consensus management, it will appear you don’t want to take in other’s opinions or hear their insights. If you illustrate how long the process has taken and how little you have to show for it, you will be the naysayer and the person perceived as negative. If you do nothing, you will likely continue to be frustrated and disappointed. You may even eventually pull yourself out of the process – or even out of the firm.
The best approach is to have a discussion with your firm leader(s). Ask them to define a successful outcome, both quantitative and qualitative for this effort. Do they care about final outcomes for the name and logo, or do they care more about everyone being engaged and involved? It could be the latter, in which case you will need to understand this is the cultural direction for the firm. If it is the former, perhaps in a non-confrontational way you could ask them about obstacles to getting the decisions made. It’s possible they see the problems, but they don’t want to insult or offend anyone by pushing a decision through at this stage.
You could be a sounding board for them and guide the discussion so they open themselves up to think differently. But set your expectations appropriately. They could place a higher value on collaboration and inclusion than they do on end results. Be prepared for this possibility.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. She is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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