Fishing 101. You wouldn’t select the bait without knowing what you’re fishing for.
This same concept can be applied to marketing. Successful marketing is highly correlated, if not entirely dependent, on a crystal-clear definition of your primary target client or member — well before any web launch or social media post. When you plan a dinner party, there’s no point in considering open flame cooking methods or butter poaching until you decide what to serve. And you wouldn’t even determine the menu until you know who’s coming and, perhaps most importantly, (like fishing) know what they like to eat.
Okay. Enough with the analogies.
True story. A financial professional, new to the business (how new? So new he didn’t even have a license), had no clients, no office and no name for his company. Fingers crossed, he assumed he could obtain proper licenses within 90 days. Then he began a journey to gain over $1B (with a B) of AUA and become the #1 producer within 15 months at a firm of 600 financial professionals. He accomplished that ambitious goal.
Several elements of his marketing strategy led to these results but none more critical than the determination of his primary target market on day one. To achieve his original business plan’s lofty goals, the (soon to be) financial professional knew his strategy needed to drive high volume and high dollar clientele. If it did, the strategy could also be attractive to other financial professionals who would consider joining the practice.
Since the business plan was predicated on significant AUA growth, high net worth individuals (HNWIs) were an obvious demographic category on which to build a marketing strategy. But this is exactly the point where many marketing plans fail. They stop at the obvious and don’t dig deeper. The assumption is if you want a large practice, then you pursue wealthy prospects. It’s a common mistake.
In this case, the marketing strategy began with high net worth individuals, however, that was just the beginning. Several drilldowns later, a precise primary demographic was determined, which became the launching point for significant and rapid growth.
Any discussion of marketing best practices — whether they be social media ideas, web strategies, email marketing approaches or event plans — begins with a diligent focus on the primary target market. Success in these respective areas of marketing is the byproduct of narrowing, not broadening, the target. Something about boiling the ocean comes to mind, but I promised no more analogies.
Narrowing the primary target demographic is the first and most important step toward optimizing the results from every aspect of your marketing strategy. Simply put, every other component of your marketing strategy will become more effective as you hone and refine your target audience.
I realize it is somewhat counterintuitive that growth is fueled by narrowing your clientele. But let’s return to the story. This financial professional had ambitious growth goals. He focused on two primary ways to meet his goals: recruit financial professionals into his branch and offer them a clear path to capturing sizable AUA. When focusing on growing AUA, it’s not uncommon for financial professionals to focus on high net worth (HNW) clientele, and that’s where he began. Our financial professional knew that a business plan focused simply on HNW prospects would not drive his recruiting goals and that the magic would come from drilling down.
When you drill down on a target demographic, ask yourself — what is their pain? Can I solve it? And ideally, is your solution unique? A prospect in desperate need of your unique (differentiated) solution is the formula for rapid growth.
Our financial professional’s business model focused on advisory assets. Like many financial professionals focusing on asset management, HNW prospects were an obvious target. But he knew growth would be slow going and highly competitive unless he drilled down. How far, you ask? Two layers? Three layers? Try nine.
- HNW clients. It goes without saying — they can fuel advisory growth. HNW clients have money, and unless they have the time and expertise to manage it themselves, they need professional help. But this is a VERY crowded space. Promoting/marketing a differentiated offering to this audience is challenging and expensive. And what exactly is their pain? Is it performance? Better service? Although you might be better on both fronts, again, winning in this demographic is a difficult, costly and time-consuming fight.
- Business owners can be HNW individuals and have complexity with their financial affairs that you can solve. But this is still very broad and very crowded. And don’t forget that most businesses are unprofitable.
- Profitable businesses narrow the prospected demographic by close to 60% — a good step in the right direction but still very broad — making it challenging to market a differentiated solution.
- Profitable small business owners — this was the turning point that became a very efficient marketing engine. He began to identify pain points that affected a high percentage of prospects in this demographic. Personal finances are often closely tied to the business. Time is an issue for small business owners making them less apt to be self-directed investors. Numerous planning opportunities exist to ease the pain of this audience. Though narrower than an HNW audience, marketing would become more effective and more efficient by narrowing further while also seeking a sub-category that potentially had industry-specific, immediate financial challenges.
- Doctors. However, many doctors are W-2 employees of hospitals and other healthcare organizations.
- Doctors, specifically solo practitioners or partnerships. His firm almost launched with this demographic as its primary target. Luckily, it didn’t. The next pivot unlocked the door to (nearly) free marketing and a highly differentiated offering to a specific target market that — forgive the pun — was in pain.
- There are 157 specialty groups across the medical and dental spectrum. Turns out, most of them do not have an economic profile that makes them ideal targets.
- But 47 of them do. So, the firm launched marketing to doctors from 47 specialty groups. This audience had specific pain points, valued a select offering of unique planning strategies that addressed their pain and was easy to find and target via specific (and very inexpensive) marketing channels.
- For those who read Part 1 of this 2-part series, you may recall the spoiler alert: Knoxville, TN. Soon after launch, it became clear that greater/faster production came from less populated cities. In fact, the #1 producer in the program earned over $3m in one year serving doctors in Knoxville, TN. After one of the marketing campaigns went out, I noticed a very high response rate. I asked the financial professional, “How many of those prospects did you close?” He replied, “All of them.”
As a marketer, I can’t stress enough the importance and value of a highly refined primary target demographic. I don’t think it’s an exaggeration to say that it will influence your growth more than any other aspect of your marketing strategy.
If you have any questions about refining your target audience — and I mean really refining it, way beyond what any marketing book, blog or post will say — please let us know. I’m always ready to share more secrets to achieving $1B asset accumulation within 15 months.