Building a specialized advisor practice using niche marketing can result in increased productivity, profit and prospects for advisors and their clients, says SEI Advisor Network.
The firm recently surveyed 391 advisors and found that grouping clients by investable assets (32 percent) and revenue (19 percent) are the most common ways for advisors to segment clients for their marketing strategy.
Niche marketing - categorizing clients by common traits or goals and using those groups as a basis for communication – was not as common. Only 14 percent of advisors currently segment clients based on their personal attributes, and just two percent segment by their clients’ investment goals.
“These statistics demonstrate that advisors frequently segment by what is important to them, not their clients,” said John Anderson, head of practice management solutions, SEI Advisor. But maybe they shouldn't.
Eighty-five percent of advisors who use niche marketing said their niche clients were more profitable than general clients; 76 percent of advisors increased their referrals after implementing a niche strategy; and niche advisors are 62 percent more likely to reach $1 million in annual production. The statistics are from a report Three Key Benefits of Prospecting with Purpose by www.horsemouth.com, a resource for advisors.
“Niche marketing gives advisors a huge opportunity to build better relationships with their existing clients and provide more personalized services – something investors value heavily,” added Anderson.