Why you absolutely need a target market
By Michael Goldberg
Knock Out Networking
Why do you need a target market? So you know how to spend your marketing time! Having a target market helps you determine what to learn, what to read, what to write, where to go, what to say, who to meet and how to get referrals. How’s that for a value prop? Bottom line: Having a target marketplace makes you much more focused (advisors are notoriously not) and much more referable.
I've written about target marketing many times before, but since having a target market is the third component of my networking action plan (NAP), it needs to be repeated. But first, (as per the last two blogs) you must be ready and have great people to model.
By the way, isn't everyone your target market? Everyone needs what you offer in terms of protection plans, asset management and retirement strategies, right? Well, not really, because everybody’s situation is different. Besides, you can’t market to everyone! In fact, if you’re looking to meet everyone, anyone, someone, the result is very often no one. Still with me? In other words, if everyone is your target market, then no one is your target market. And no one equates to no business.
Your target market is simply those you serve best and, therefore, wish to serve most.
So if your target market represents where you do your best work, why on earth wouldn't you focus on doing more of that kind of work? Is it because you don’t know who you should target? You don’t want to exclude anyone from becoming a prospect? You don’t know where to start? You don’t understand the benefits of having one? All of the above?
Target marketing is not a new concept, but it still creates a lot of confusion. It’s no wonder so many advisors have a go at starting a difficult business without one. It’s like searching for the buried treasure without a treasure map. You need an X to mark the spot!
It is especially critical to have a target market if you are just starting your practice, or if you want to grow your practice significantly. I don’t think it’s the only way to grow your practice, but it’s one of the easiest and most effective ways. Especially if you plan to network! Why make your networking and other marketing efforts more difficult than they need to be? Before you jump to conclusions, if you think your target market is pre-retirees, than you don’t have a target market. If your target market is small businesses, then again, you don’t have a target market. Entrepreneurs? Recent college grads? The affluent marketplace? Individuals? Not target markets. You must be much more specific. Small businesses in the retail industry with organizations like ABC Lumber. The more specific you are, the more powerful your strategy can be. Then you’ll know
where to go, what to say, and to whom!
Here are some suggestions to help you find or create your target market.
Focus on an industry or profession where you have an interest and passion.
Do what you love and work with people who do something that you love. Mike, an advisor at one of my client firms, is a gym rat, a fitness nut. He is very focused and disciplined with his fitness regimen — not so much with his prospecting regimen. Since I box and am into weights and fitness, Mike and I had a lot to talk about. When we got together, I got the sense that that’s pretty much all he wanted to talk about. He got so excited talking about supplements, weights, boxing and fitness.
I told him, “You've been an advisor for three years. I have to be honest with you, Mike. It seems like you hate what you do.” He said, “I know my stuff, but I’m just not excited about it. You’re right.”
“What if your target market becomes people who work out: trainers, gym owners, the GNC franchisees, the companies that make supplements and exercise equipment and athletes who walk those paths?” He looked at me in awe and said, “You can do that?”
Mike did that and his production soared. In fact, he became a certified trainer so he could stay focused on his target market. Make your vocation your vacation and work with people that do the things that you love, and you will love them too. It's great when your prospects and clients are passionate about the same things as you. It could be mutual interest in an activity, industry, profession, or demographic. The key is establishing some common ground.
Discover who needs what you do
Another way of determining your target market is to focus on an industry, profession, demographic, vertical or market segment that needs what you want to do most. So if you are passionate about long-term care, it’s evident that your target market needs to be senior communities, assisted living communities, estate planning attorneys, CPAs and folks who are looking to be responsible about planning for the future. Knowing who needs what you do makes your target evident, and the target market is now aligned with the product or service that you are most passionate about. I know financial advisors who make a great living just focusing on long-term care. They’re experts in it. It makes their networking quite easy, because they know where they need to go, what they need to say and to whom, and what they need to know, read, write and report on. That’s the benefit of being a specialist!
Past work experience
If you happen to have a background as a police officer, IT professional, restaurant manager, mortician, whatever, why not use that knowledge and experience to build your own credibility and leverage a market you’re already familiar with? An advisor I work with has a niche with funeral homes due to his background as a mortician. He does work with almost all of them in his state. He’s subject to a lot of bad jokes, but given his experience, they know that he “gets them,” so he gets referred from one to the other. He also attends their conferences, trade shows and other initiatives linked to that industry.
Demographics you can identify with
Another way to go about finding your target market is to discover a niche that represents people you can identify with now. So if you’re a brand new advisor who recently graduated from college, you might want to target other young business owners or sales reps that are just starting out. This gives you the opportunity to become active with your college alumni association, young professionals groups and junior level professionals at some of the accounting and law firms in your area.
If you have a book of business to work from, assess your clients and decide which ones are your favorites. It could be the nature of their business, their personal characteristics, or the type of work you’re doing with them. See if there is a way of cloning those clients into a target market. How can I work with more firms like yours? How can I work with more people like you? Hey, you might just get a referral!
Keep in mind that having a target market doesn't suggest that you serve one market and one market only. You can have more than one market that you serve, but I wouldn't have more than just a couple, because it gets confusing and starts to defeat the purpose. Also, establishing a niche won’t prevent you from working with other prospects that might present themselves. Prospects like to work with advisors that they consider specialists, rather than generalists.
The idea is to go a mile deep rather than a mile wide. Remember, advisors have a hard time staying focused — so stay focused!
See also: The ultimate niche market: Where can you make the most money?