Niche Marketing

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chickenfeed's picture
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Joined: 2009-02-06

So i had an interview with MSSB, and they kept talking about niche marketing.

But never really explained it or how it works. My assumption is that you focus on a specific prospect, ie: Podiatrists, in Northern NYC, who run their own practices.

However I have a hard time seeing how decreasing your prospects to such a miniscule number would make a difference. It is also my assumption that in order to crack such a market it would take some time(which is something a new trainee doesn't have)

Any thoughts?

snaggletooth's picture
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chickenfeed wrote:So i had an interview with MSSB, and they kept talking about niche marketing. But never really explained it or how it works. My assumption is that you focus on a specific prospect, ie: Podiatrists, in Northern NYC, who run their own practices. However I have a hard time seeing how decreasing your prospects to such a miniscule number would make a difference. It is also my assumption that in order to crack such a market it would take some time(which is something a new trainee doesn't have) Any thoughts?
 
I agree with you.  Most newbies would be better off going after anything their first 2 years.  If you have enough AUM to make a living, then go after a niche.  I can't see it working any other way at a wire.

tqspygame's picture
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Joined: 2009-01-24

That is funny I had a similar experience. And the whole second interview is based on the niche marketing plan

Moraen's picture
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chickenfeed wrote: So i had an interview with MSSB, and they kept talking about niche marketing.

But never really explained it or how it works. My assumption is that you focus on a specific prospect, ie: Podiatrists, in Northern NYC, who run their own practices.

However I have a hard time seeing how decreasing your prospects to such a miniscule number would make a difference. It is also my assumption that in order to crack such a market it would take some time(which is something a new trainee doesn't have)

Any thoughts?

The idea behind niche marketing is that you become an "expert" in that niche. For your example: You are Chickenfeed, expert Podiatrist advisor. You know Mean income, psychology behind med students becoming podiatrists, how their practice is set up, the type of nurses and assistants they hire. You also know the types of investments they talk about at parties, you invite them to podiatrist only party's. As you become that expert, you are THE go to person for podiatrists.

tqspygame's picture
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Joined: 2009-01-24

That would be great, but as a new person. I just don't have that "expert" title or experience.

Moraen's picture
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Joined: 2009-01-22

tqspygame wrote: That would be great, but as a new person. I just don't have that "expert" title or experience.

I never said it would be easy to do.

The point is to do a lot of research and impress these guys with your knowledge. What type of equipment do podiatrists need for their practices? What is the difference between the models? This stuff isn't hard to find.

What I would do (in this case), is find a podiatrist, tell him your intentions and ask if you can take him to lunch to pick his brain. You aren't soliciting his business. EVER. If he wants to do business with you, fine. But this guy is going to be your "in". Show genuine interest in helping podiatrists, and he'll eventually start introducing you.

In the meantime, go after everything else you can get your hands on.

tqspygame's picture
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Joined: 2009-01-24

But I have to have a game plan before I get hired (round 2 of interviews), so that would be ideal after I get hired.

Moraen's picture
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Joined: 2009-01-22

Didn't I just give you a niche game plan? Research!

chief123's picture
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Joined: 2008-10-28

Niche marketing is a sham... These big firms are focusing on it now, because they want to seem a level above the rest of the world.. "We don't cold call, We develop niche markets and network"...

I never understood why you would limit yourself to prospecting Podiatrists, who live in northern NYC, that run their own practice, who have a house that is worth $1MM plus and likes dogs..

Contact ratio would be 30% of which you close at best 50%. So say you narrow it to 1,000 people who fit your niche... Now you have 300 you can actually get a hold of and will meet and close 50% of those so now you have 150 clients... well if they each have $1MM no problem, but we know that's not true, so even if they all xfer in $250K, that is only $38MM @1% if all feebased, then you are grossing $380K as long as the market doesn't go down...But how long does that take?

Moraen's picture
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Joined: 2009-01-22

I don't know chief - I'm not a niche marketer (unless you count military and veterans), but I know a guy who works only with surgeons and has only been in the biz five years. He does VERY well for himself.

I've seen it work for some people.

chief123's picture
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Joined: 2008-10-28

I would think you would have to have an "in" and if you don't, then you are no better off then the rest of us who just call them.

Baba Booey's picture
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Joined: 2009-01-05

Two things - Why would you call on military and veterans?  Do they have any money?  I'm extremely grateful for their service.....but I don't think they get rich in the Military, do they?
 
Niche marketing is complete BS, unless you have an "in" - Chief is right.  Why would I take a guy to lunch and NEVER ask him for business, that doesn't make any sense.

Moraen's picture
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Joined: 2009-01-22

Baba Booey wrote: Two things - Why would you call on military and veterans?  Do they have any money?  I'm extremely grateful for their service.....but I don't think they get rich in the Military, do they?
 
Niche marketing is complete BS, unless you have an "in" - Chief is right.  Why would I take a guy to lunch and NEVER ask him for business, that doesn't make any sense.

Single LTCs and COL have lots of money. Air Force guys of from E5 and above have money. Some have businesses on the side. One of my clients is a Tech Sergeant in the AF and has also been selling real estate for 15 years. He's got some jack.

This past month I picked up two generals - my biggest accounts, EVER. One was a guy I knew when he was a Captain. The other, his best friend. These are MY clients. I generally don't like clients, but b/c I've pretty much been in the Army my entire life, it's almost as if they aren't clients.

Married military people - forget it. No money.

Also, National Guard and Reserve guys generally have fairly decent jobs. The other thing is that folks with more than 20 years have an extremely high risk tolerance.

As for niche marketing. I'm just telling you how people have done it. In the cast of physicians, especially surgeons, they are the most egotistical people (next to financial advisors) that you will ever meet. Showering them with attention and asking them about the "miracles" they perform will cement a good relationship. Eventually, this guy is supposed to ask YOU to do business with him. Not to mention introduce you to all of the podiatry people.

As I said, not something I would do, but hey some people swear by it.

BondGuy's picture
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Joined: 2006-09-21

chickenfeed wrote:So i had an interview with MSSB, and they kept talking about niche marketing. But never really explained it or how it works. My assumption is that you focus on a specific prospect, ie: Podiatrists, in Northern NYC, who run their own practices. However I have a hard time seeing how decreasing your prospects to such a miniscule number would make a difference. It is also my assumption that in order to crack such a market it would take some time(which is something a new trainee doesn't have) Any thoughts?
 
Yup, I've got some thoughts.
 
They, who ever they be, didn't explain how it works because they have no idea how it works. Most of the "theys" in management at places like MSSB have never had to produce. That being the case, they latch onto ideas they hear through the management grapevine. However, "they" are clueless as to the nuts and bolts of how to actually do it.
 
It wasn't always that way. There was a time when most offices were managed by ex-brokers/advisors. And not flunkies. Guys doing big numbers who wanted something else out of life. These guys could teach because they'd been there. Like all big producers they had their finger on the puulse of what was working, even if they didn't do it that way themselves. Why? because part of being successful is constantly looking for new ideas. That and our inner salesman is always in "The grass is always greener on the other side of the street" mode. So, we always go to check out that green grass. I know I do.
 
Now that's a pretty negative couple of paragraphs. And for good reason. As some others have said if you do niche marketing you will fail. In fact you fail right out of the box. Why? Because to become an industry specialist and work with any group takes a lot of time. Time, as a trainee, you won't have. Executing a niche marketing program will guarantee you to miss your first set of numbers and with that miss you are gone.
 
That the "Theys" you are talking to don't know this proves what i said in my opening paragraph. Then again, maybe they do know it and are setting you up to fail. it happens- another topic.
 
I would suggest that you ask them to explain in detail just how a marketing plan based on 'Niche" marketing would be constructed and executed? If you really want the job try not to laugh at the answer.
 
That said, niche marketing is a very green side of the street. it takes time to develope that market unless you have a natural connection. Being wired in always helps.
 
Lastly, if you want to be the expert with  doctors, get'em in medical school.

anonymous's picture
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Joined: 2005-09-29

Niche marketing can be very successful.  From my experience, personally and observationally, it doesn't happen via a plan.  It happens accidentally.
 
I work with a couple of guys who have built a huge practice working just with doctors.  It didn't happen on purpose.  The senior guy's wife had a friend doing his residency and coincidentally, he needed to get someone to talk about disability insurance.  He gave a little talk which lead to talks in other departments and it snowballed. 
 
They now have access to every resident in 3 different local hospitals.  They don't have the time to see any of the residents, so they have young associates work with all the residents and the senior partners get a big cut for doing nothing.

B24's picture
B24
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Joined: 2008-07-08

I have read all there is to read on Niche Marketing.  You have to keep in mind who writes this stuff - Matt Oeschli, Mark Tibergian, etc.  Not that they are trying to lead you down the wrong path, but you have to remember that the advisors they study to come up with these reports are multi-million dollar producers that have been at it for decades.  So of course with $250mm AUM and a team of 5 people, you are going to focus on replicating your best clients.  You don't need to take verey Tom, d***, and Harry.  You focus on only those niche areas that you have become an expert at, and prospects naturally gravitate to you via word of mouth referrals.  So if you have 50 surgeons from Southern California in your book, what are you going to focus on?  Surgeons in SoCal.  Each one of those 50 surgeon clients gives you one referral over the next few years, and you are golden.
 
Point is, all this "niche marketing" stuff is aimed at established advisors.  So unless you have some real natural niche market you can tap (like you used to be the President of the local Bar Association), it's a tough row to hoe.

Squash1's picture
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Joined: 2008-11-19

BondGuy wrote:chickenfeed wrote:So i had an interview with MSSB, and they kept talking about niche marketing. But never really explained it or how it works. My assumption is that you focus on a specific prospect, ie: Podiatrists, in Northern NYC, who run their own practices. However I have a hard time seeing how decreasing your prospects to such a miniscule number would make a difference. It is also my assumption that in order to crack such a market it would take some time(which is something a new trainee doesn't have) Any thoughts?
 
Yup, I've got some thoughts.
 
They, who ever they be, didn't explain how it works because they have no idea how it works. Most of the "theys" in management at places like MSSB have never had to produce. That being the case, they latch onto ideas they hear through the management grapevine. However, "they" are clueless as to the nuts and bolts of how to actually do it.
 
It wasn't always that way. There was a time when most offices were managed by ex-brokers/advisors. And not flunkies. Guys doing big numbers who wanted something else out of life. These guys could teach because they'd been there. Like all big producers they had their finger on the puulse of what was working, even if they didn't do it that way themselves. Why? because part of being successful is constantly looking for new ideas. That and our inner salesman is always in "The grass is always greener on the other side of the street" mode. So, we always go to check out that green grass. I know I do.
 
Now that's a pretty negative couple of paragraphs. And for good reason. As some others have said if you do niche marketing you will fail. In fact you fail right out of the box. Why? Because to become an industry specialist and work with any group takes a lot of time. Time, as a trainee, you won't have. Executing a niche marketing program will guarantee you to miss your first set of numbers and with that miss you are gone.
 
That the "Theys" you are talking to don't know this proves what i said in my opening paragraph. Then again, maybe they do know it and are setting you up to fail. it happens- another topic.
 
I would suggest that you ask them to explain in detail just how a marketing plan based on 'Niche" marketing would be constructed and executed? If you really want the job try not to laugh at the answer.
 
That said, niche marketing is a very green side of the street. it takes time to develope that market unless you have a natural connection. Being wired in always helps.
 
Lastly, if you want to be the expert with  doctors, get'em in medical school.
 
Seriously I would pay to come hang out with your for a week..

chickenfeed's picture
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BondGuy wrote:chickenfeed wrote:So i had an interview with MSSB, and they kept talking about niche marketing. But never really explained it or how it works. My assumption is that you focus on a specific prospect, ie: Podiatrists, in Northern NYC, who run their own practices. However I have a hard time seeing how decreasing your prospects to such a miniscule number would make a difference. It is also my assumption that in order to crack such a market it would take some time(which is something a new trainee doesn't have) Any thoughts?
 
Yup, I've got some thoughts.
 
They, who ever they be, didn't explain how it works because they have no idea how it works. Most of the "theys" in management at places like MSSB have never had to produce. That being the case, they latch onto ideas they hear through the management grapevine. However, "they" are clueless as to the nuts and bolts of how to actually do it.
 
It wasn't always that way. There was a time when most offices were managed by ex-brokers/advisors. And not flunkies. Guys doing big numbers who wanted something else out of life. These guys could teach because they'd been there. Like all big producers they had their finger on the puulse of what was working, even if they didn't do it that way themselves. Why? because part of being successful is constantly looking for new ideas. That and our inner salesman is always in "The grass is always greener on the other side of the street" mode. So, we always go to check out that green grass. I know I do.
 
Now that's a pretty negative couple of paragraphs. And for good reason. As some others have said if you do niche marketing you will fail. In fact you fail right out of the box. Why? Because to become an industry specialist and work with any group takes a lot of time. Time, as a trainee, you won't have. Executing a niche marketing program will guarantee you to miss your first set of numbers and with that miss you are gone.
 
That the "Theys" you are talking to don't know this proves what i said in my opening paragraph. Then again, maybe they do know it and are setting you up to fail. it happens- another topic.
 
I would suggest that you ask them to explain in detail just how a marketing plan based on 'Niche" marketing would be constructed and executed? If you really want the job try not to laugh at the answer.
 
That said, niche marketing is a very green side of the street. it takes time to develope that market unless you have a natural connection. Being wired in always helps.
 
Lastly, if you want to be the expert with  doctors, get'em in medical school.
 
I tried that and he kind of puts around the answer until he came back to where he started. They want me to come in with niche marketing plan at the next interview. My thought would be to create a basic niche (corporate directories from chemical companies targeting 401k rollovers in my zipcode) but essentially say that I am going to call everyone who qualifies. And then ask them what niche market they used to carve out their career and if it was possible to set-up in the time allowed to make the goals. I have two other interviews with different firms, so I guess if I piss these guys off then, I will down play it next time....
 
What happened to the veteran producers who built books and built firms.... Did they die? Or just don't care anymore? Do they realize what these firms are saying will work?

voltmoie's picture
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Joined: 2008-11-05

I'm qualified to niche market strip clubs and hooters.  Honestly speaking - in my area there are two main employers.  I've done EVERYTHING I can to learn about their retirement plans and benefits.  My objective is to be the go-to person each time someone retires from those companies.  Not sure if that a true niche marketing effort or not but it's my focus.Squash .. stop stealing my lines. 

BerkshireBull's picture
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Joined: 2009-06-10

I heard an interesting niche marketing idea a few weeks ago.  If you're target marketing a big employer in your town, have the picture of you for your newsletter taken somewhere on their campus, like by the main entrance, or near a fountain or something that anyone who works there would instantly recognize.  One of our top advisors specifically targets retiring employees of Philip Morris in North Carolina and has done this for his newsletter which gets sent to every employee.

AdvisorControl.com's picture
Joined: 2009-05-29

My niche' market is and always has been rich people with liquid $$.  It's a strong niche' with very little competition.  I would suggest other advisors find these people too.

Northfield's picture
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Joined: 2007-04-10

I concur with bond guy that this "nice marketing" concept for trainees is a set-up for failure. I'm sure it's not intentional, but you should understand what it takes to be succesful. Much of that info is on these threads. Read the 500 day war, for example.
 
Generally, the first 2 years are spent doing a little of everything. Cold calling, lunches with centers of influence, joining every chamber of commerce, rotary, etc that you can join, teaming up with others for seminars, asking for introductions from friends and family. Everything you can think of, most of which will feel like it's failing.
 
Eventually, if you work your rear off, after about a year a couple of these marketing activities will begin to have some traction and you will focus you energies in these activities.
 
Thus you become somewhat of a marketing expert in year 2 or 3.
 
Finally, in year 3 or 4 you may realize that these focused marketing efforts are leading to very similar clients and that there are certain of these clients that you really enjoy working with.
 
A niche is born. 

exUBS's picture
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Joined: 2009-04-23

I don't know, some of it may be bunk, but there is some validity as well.  Taking a macro view, you are trying to set yourself apart from your competition- making yourself unique through how you approach prospects.  And your initial approach is in part based on something they are involved in.  Generic cold call with a generic pitch has a low probabilty of success.  Targeted message to people you know already have an interest in your message increases your chance of success.
 
If you knew someone always bought bonds, would you show them a small cap stock, or a bond ?
 
If you knew someone owned a McDonalds franchise would you show them the packaged product of the day or something based upon their McDonald's involvement ?
 
 

chief123's picture
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Joined: 2008-10-28

I understand what you are saying UBS, but I agree with Northfield, in the beginning you just try to survive, but after a few years and assets, you start to notice a trend who your best clients are and where they come from.

I also agree with advisorcontrol, at the end of the day I am looking for investors who want to work with me, if it's a corp exec or a garbage man, as long as they have the minimum to get in and WANT my advice, I have no problems

DodgerDraftpick's picture
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Joined: 2006-12-24

Specific niche marketing does work and is what separates top advisors from everybody else.  Driving deep and narrow is the best way to go but you need to have a great niche.  Just starting out you shoud identify a niche you would like to focus on but be  realistic about the fact that it will take years to develop the relatioships and centers of influence that will make it possible to be successful in it.  An example I use is working with CPA's who specialize in a certain field.  I have a tax and estate planning attorney I have built a referral relationship with since we both focus on CPA's in this field.  I have introduced him to CPA's he didn't know and vice versa.  I don't know what industries are in your area but that is something that you should write up to present to your manager.  Eventually you will get to a point with enough assets you can focus more time on a niche like this but three years is probably how long it will take to be ready for this kind of marketing.

flboy4's picture
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Joined: 2007-07-18

As far as I can tell the most successful niche market is former pro ball players that blew out knee and now works as FA under a old fart. Still has his $750k under the old guys number and he courts his old buddies for said old fart and hangs around the bars and ballfields for a couiple of years playing golf and slappin hookahs. The old guy tires of his 10am to 1pm work ethic hung over and unkempt then the $750k goes to another wire while ex mudd hen splains to buddies why they are down 45% on arcs and have to go hock new wire to country club and dads of the next sure thing out of slippery rock state lefty bullpen ace block head. He may go in the 24th round you know. 

BondGuy's picture
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Joined: 2006-09-21

Rather than looking at niche marketing from a client group/affinity group POV, look at it from a product POV. For example my niche is tax free bonds. It's not the only thing i do but it's what do the most. I seek out bond buyers or create bond buyers out of prospects who will benefit.
 
Becoming a product expert and then finding clients who fit the product is a way to build a very big business. It may sound ass backwards and probably is, but its the way most sales organizations work.
 
As an example, my product solves a problem that rich folks have. Coincidentally, rich folks have the money to invest in my product. So, as you can see there is a nice fit there. I can solve one of their problems, paying more than their fair share of taxes, and they can solve one of my problems, my need to feed my family. Gotta love it when a plan comes together!
 
Building a business based on products is the way it use to be done. Does it work? Hmmm? That would be yes!

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