Developing Market Niche

[rwlarson]

I am considering making my market niche Behavior Health specialists on a fee only model.

This would enable me to receive referrals of clients that need help with the finances to assist in solving relationship problems, providing financial education, and have the behavior health specialists as clients.

What are your thoughts on this market concept? How could I further develop it? Wallace

[bcarnduf]

I am not familiar enough with that specific niche to comment on its viability. However, I do believe niche marketing is the way to go, especially now in the internet age when you can serve all of that niche ("all search is local"). As far as marketing to it, I think that social media could really help out. If you started participating in online discussion groups with that focus I am sure that you could become aware of more of the specific issues involved, and make contacts with potential clients. A blog, and social media platforms (i.e. twitter, facebook) would be a good way to interact with and build a clientele. Good luck with it,
Brent

[hstarn]

A few years ago I read somewhere between 25 and 35 books on prospecting/marketing/advertising financial servies. That's probably a little over-the-top but I look for consistent themes that flow through the different readings. I figure the core tenants or fundamental "truths" will appear in most of the texts, along with the author's individual "ingredient" for success. If there is one consistent theme that flowed through the books it's the importance of developing a niche.

H. Stanley Jones wrote in his book, Marketing your Financial Planning Services, "There will always be a need for narrowly specialized financial professionals...When developing your service, keep the target market small; the scope of your initial efforts should be limited to a small number of clients. Let the first year be a thorough trial of your skills and services....the process is to segment the general market in order to find your target, then profile your target sub-groups in order to understand their general product and service needs. Finally develop the product and services needed."

John Melchinger in his FPA Journal article, First, Think Market. The, Think Marketing, suggested the following process: "Pick a market you think you want to pursue... 1. Study it firsthand for a very short time. 2. Summarize what you know - and what you only think you know - about the market. 3. Develop your solutions to the market's needs and desires. 4. Package yourself to deliver these to the market. 5. Start promoting what you've got."

Developing a niche gives you focus and as a specialist you become differentiated. That gives you an advantage; you can set yourself up to become the expert in that space.

In response to your post let me suggest that you first figure out if your niche (in your market area) is large enough to support your business endeavor. (If you intend to become registered across state lines then I'm sure the niche will work.) Assuming that it is, you then develop your unique selling proposition based on the needs of your clients. With that clear focus you proceed to communicate your message to the clients. Getting the message to your prospective target means knowing what they read, where they go, and to what associations they belong (who they hand out with).

I look forward to reading other posts.....

[hstarn]

You might be interested in reading the Journal of Financial Planning Article, "How to Build a Nice Practice" by Jim Grote, CFP. It appeared in the August 2010 Issue, pages 24-29.

You can access the article via the Pearson Online database (Business Source Premier-EBSCO). Let me know if you are having any trouble accessing it.

[hstarn]

So how do we find a opportunistic niche? Helen Modley of Focus Wealth Management shared her success story about finding a niche when presenting during a guest visit to a retirement-class live chat.

Helen's firm has developed a success niche in helping clients deal with inherited assets from a decendent's qualified plan or individual retirement account. The niche presented itself from a client need. In searching for an answer she discovered that no one was able to provide clear answers. In response, Helen read through the IRS documents and became the "expert." As she said, "I now tell everyone that I am an expert in this niche."

To communicate her expertise she contacted several organizations (included the local CPA society) to see if they would be interested in a presentation -- which of courses they were. Then see "jumped through the hoops" in order to get approved CE credit for the presentations. Now there's a steady stream of speaking opportunities (both at the local and national level).

(By the way, I found her contact information on the FPA Speakers Bureau; that's how I ended up asking her to visit my class.)

One final point -- Helen's firm is a wealth manager (i.e., assets under management AUM); therefore, she is always looking for situations in which there is money on the move. Do you see the leverage here? She has developed a complementary niche. Offering real "expert" answers to people with money on the move opens the door to a AUM relationship.

[ctowns]

Hey Wallace,

Carthel here again.

I tend to like to keep things simple and easy to follow. I think you have gotten some EXCELLENT posts (especially from Harry)so far.

I would just like to encourage you to "consider the path of least resistance". Basically, look around you and see what connections/hobbies/interest you CURRENTLY have. Then, do some research about those connections/hobbies/interest and see if a viable (quantity, quality, accessibility, affordability, demand, etc.) market exists that you can build a practice around.

For example, upon graduating I was headed in the direction of offering my services to religious based non-profits. However, I have received several referrals to clients in need of estate planning involving probate. My research has revealed that there is a HUGE need for probate prevention planning and estate administration in the African-American community!

So, I am re-focusing my efforts in that direction...it may or may not lead to religious non-profits. But, that's the niche I am focusing my practice on.

Lastly, Dr. Basu and Harry are GREAT resources and very, very helpful. I would schedule a conference call to talk to either of them about your practice. This forum is good...but, talking to them directly is exponentially better.

Best of luck my friend....

Carthel
Class 2009