Hardly a day goes by that someone does not offer some new idea on how to market a business. Most go the way of other fads by fading quietly away. Others seem to stick and still others grow in popularity over time. Given profit constraints on the financial services profession and the competition battling for the same block of clients, it is not surprising that financial advisors are seeking new ideas and alternatives when it comes to marketing their financial practices. The fact is that there exists a certain level of sameness in this profession that makes the task of differentiation that much more difficult. However, there is a relatively new movement that promises to change all that.

A book written by W. Chan Kim and Renee Mauborgne titled Blue Ocean Strategy (Harvard Business School Press, 2005) suggests theoretical approaches to creating "blue oceans" of uncontested market space ripe for growth. The book, written in 2005, sold over a million copies in its first year and is now being published in 39 languages.

The concept of the Blue Ocean Strategy is that all potential clients in the marketplace are divided into red and blue oceans. The red oceans are those industries that have accepted industry limitations (basically all of the industries in existence today), whereas the blue oceans represent all the industries not in existence today, the unknown market space unaffected by competition.

In the red oceans, as the market space gets crowded, the prospects for profits and growth significantly decline over time. Products become commodities or niches, and cutthroat competition turns the red ocean bloody. Hence, the term "red ocean."

In blue oceans, however, demand is created rather than battled over, and there is significant opportunity for profitable and fast growth. In blue oceans, competition is deemed irrelevant because the rules of the game are waiting to be made. Blue ocean is an analogy to describe the wider, deeper potential of market space that has yet to be explored and/or exploited.

A blue ocean is created when a firm innovates a new product or service that provides value to both the client and the firm. To be a true blue ocean, this new offering must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market. But to make this concept work and be sustainable, firms must find ways to deliver the product or service efficiently, and with a reasonable profit. This may not be as difficult as developing the product or service itself, simply because in a new market space, pricing is largely an unknown element.

The book offers several examples, including Dyson Vacuums. After inventing a whole new way of vacuuming, Dyson set about the task of building a marketing program that solidified its place alone in that market space. The vacuum process, one that had been largely the same from company to company for years, was turned on its ear by a company offering a vacuum with no filters to clean and a Dyson ball that turns on a dime. In the beginning, no competitor was prepared to counter the campaign. Dyson could effectively charge whatever it wanted for its vacuums and did. Most of these were twice the price of other manufacturers' items, and yet they captured significant market share because this was a new idea that captured the imagination of the consumer.

Another example is Pitney Bowes, whose CEO Michael Critelli (now executive chairman), created the firm's Advanced Concept & Technology Group (ACTG). This group identified and developed a new machine that enables people to design and print their own postage from their desktops.

How can the blue ocean strategy be applied to a financial advisory firm? The answer is pretty much the same as it would be for any industry or profession. Blue Ocean begins by plotting a strategy canvas. This diagnostic tool matches competitive traits (such as a business's prices, new products or client service) and plots them against current product and/or service offerings. The competitive traits might differ for different styles of financial practices. A divorce planner, for instance, would share some of the competitive traits of a traditional firm, but have others that are completely different.     When doing a true apples-to-apples comparison, a strategy canvas might look like Figure 1.

As Figure 1 shows, the Blue Ocean strategic move (the end of the new value curve) is achieved when a high offering level is achieved where there are no competing factors.

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