Nine Steps to Launch a New Niche
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Firms reach a certain size and decide to focus their marketing on a specific client segment or to groom younger advisors into business development roles via a niche specialization. But how do these firms establish themselves with a niche? These nine steps will help.
Most financial advisory firms grow their businesses through referrals and word of mouth. As a result, they often have a wide range of client types. Often, though, once a firm reaches a certain size (for example, $1 billion in AUM), one of two things happens:
- They realize they want to make a more focused effort marketing to a segment of their client base where they see additional opportunity, such as business owners, executives, or women in transition.
- The firm hires younger advisors they would like to groom into business development roles and want to use a niche to help them succeed (e.g., young tech professionals).
When a firm is ready to launch a new niche specialization, how do they go about doing it? Up until that point, marketing centered on generating referrals. But a niche focus requires a different approach.
Here are the nine steps you need to take when entering a new niche market.
1. Define your audience
Define the general niche specialization you want to focus on, for example, business owners, women, executives, or health care workers. From there, further narrow this niche by identifying the one problem that you will solve for them.
Ideally, this problem is painful to your niche and is urgent for them to solve. For example, if your category is tech employees, the one problem you solve may be helping them minimize the taxes associated with their equity compensation.
While you solve many problems for this niche, defining the one problem they all share helps you be clear on exactly who is your niche audience.