Why Bother with a Target Market?
By Beverly Flaxington
February 25, 2014
Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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What is the purpose of a target market? I find the concept limiting. We work well with young professionals in their 40s and retirees in their 70s. We have clients that are couples, families and successful singles. I am hesitant to limit our approach to a certain group. It seems that it locks us in and doesn’t allow for flexibility.
Dan D., Southeast
Thank you for giving voice to something that many business owners, and especially financial advisors, deal with when it comes to marketing. What you do – wealth planning or investment advice – is applicable to most people who meet your minimums, right? So why limit your opportunities and options?
The importance of target marketing lies in five key factors.
- It makes it easier to write marketing copy. Your language and approach can speak to a specific audience and its needs. The more a prospect thinks you “know” them, the more open he or she might be to hear the message.
- It identifies your ideal client and helps prospects to self-select. I understand what you are saying about being limiting, but the fact is that not everyone is a good prospect for any one firm. The clearer you are, the clearer a prospect can be.
- It helps with storytelling. When you know particulars about any group of people, you can be more descriptive in addressing that group’s needs. Doctors in private practice have needs that differ from executives with significant stock options. Grandparents with disabled grandchildren have needs that differ greatly from single divorced wealthy women with no kids. People want to feel known. The more you can talk their talk, the more they think you know them.
- You can design products and repeatable processes. If you know, for example, that employees at a certain firm all struggle with one aspect of their retirement offerings, you can develop a flyer, one-pager or landing page around their needs that pitches your solution.
- It allows you to broaden. Even though you are targeted in approach, you can extend what you do and how you do it to other client groups that are semi-related. Everyone has to make financial decisions, everyone (likely) hopes to retire, everyone thinks about the future, etc. The secret is that even though many firms target certain markets publicly, they still work with whomever they choose behind the scenes. Target marketing helps with focus and messaging.
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