As a financial advisor you need to know your target market. If you don’t know who your potential clients are and their characteristics, how can you find them and win their business? Additionally, if you aren’t focused on a specific group and simply market your business to anyone, you might not be able to reach as many potential clients effectively.
Today we are looking at the influences and motivations of a financial advisor’s target market. The first thing to do is identify your target market. If you’ve been reading my blog the past 14 years, you know that I’m a big proponent of financial advisors having up to three target markets.
If you don’t know where to start, you can read an article to give you the basics. If you need more help you, please contact me. I can provide you with guidance and support on a number of issues, including identifying your target market.
Two key aspects of target markets for financial advisors
Once you’ve identified your target market, there are two key things needed to understand them: 1. what influences them and 2. what motivates them.
1. Target market influences
Potential customers are influenced by many factors. What makes a potential customer consider your firm versus a competing one?
Personal and business referrals
One influence on potential clients when choosing a financial advisor is referrals, both personal and business.
Doing business with a financial advisor can involve a substantial chunk of money, often an entire life’s savings. In addition, potential clients consider the trust factor. Potential clients want an advisor who is reputable and who will meet their needs.
Potential clients find this information from personal and business referrals. They ask their friends and family. They ask their CPA and lawyer. They seek out recommendations from those they trust to find someone they can confide in and have confidence that the advisor is working in their best interest.
Although people sometimes rely on personal connections when seeking information about a financial advisor, they also look online. They type your name in a search engine and see what comes up.
There a number of things you can do to help your customers find the right information about you online. In particular, you can engage in search engine optimization and reputation management.
Branding is an important influence for your target market. How do customers perceive your business? If you want to be seen as an established business, with a known name, and stability, you need branding. Branding can be complex and is an area where coaching can help.
Affiliation and associations
Another influence on potential clients is the idea of affiliation. You know the expression, “You’re judged by the company you keep.” While this expression is meant to steer a person away from bad company, it is also advice to be in good company.
Potential clients will draw a connection between you and those around you. They will see you like those you are with. Understanding this, you should seek to keep good company.
Good company can come in a number of forms. It could be by affiliating yourself with something your customers like and respect. Have you ever seen luxury brands advertise during golf? One reason for this, is the companies are trying to draw a connection between their brand and the perception of the sport.
Also, you can be part of professional associations. There are different organizations that you can you look into depending on the type of business you have. One might be The National Association of Personal Financial Advisors and another might be the Financial Planning Association. Potential clients may view you more favorably if you are a member of organizations like these.
2. Financial advisor target market motivations
In addition to looking at what influences your target market, you should also consider what motivates them. What do these potential clients want when they seek out a financial advisor?
One thing you have to remember when marketing to potential clients is the standard marketing advice that people don’t buy features, they buy benefits. Clients aren’t concerned with what you can do, rather, they are motivated by how you can benefit their lives.
Another motivation for target markets is value. Value doesn’t mean people are looking for the cheapest service. It means that they want to see enough of a return on what they spend to make the relationship worthwhile.
When thinking about value, it is important to remember that it is more than a client’s return on their investment portfolio versus what they pay your firm. Clients also see value in knowledge, experience, service, personality, and character. Clients are looking for a total package of value.
Another motivator for your target market will be meeting their financial goals. These goals aren’t just money though. They are more substantial. They are buying a home or second home. They are vacations. They are retirement. They are education for their children. Clients are motivated by money and by what they can do with it. They are looking for a financial advisor who can help them meet these goals.
A last important motivator for your target market is how you fit with their lifestyle and personality. For example, do you have a target market that likes you to come to them rather than they go to you? For high net worth clients, they often prefer their advisory team to come to them. Does your business fit with this?
In addition to lifestyle fit, your target market will also have a personality fit. Are they looking for a financial advisor who takes their time and explains things so they can understand everything? Or, would they prefer an advisor who simply handles things and gives them reports? Different target markets are motivated to find different fits for their personalities. You should make sure you fit with the personality and style of your target market.
Identifying a target market and learning about what influences and motivates them can be a detailed but a very rewarding process. By learning about your target market you can better reach them through their influences and better serve them by meeting their motivations. This can help improve and grow your business.
If you’d like to talk about your target market and how you can serve them, please reach out to me.