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Specialize to Win: How to Find the Ideal Niche for Your Practice

Focusing on a specific niche gives you the opportunity to really understand the needs of the clients in that market. It enables you to specialize and develop a true expertise, increasing your ability to create great client experiences and set yourself apart from competitors.

Here’s the three-step process many top advisors have followed to find their ideal niche.

Step One: Identify who you want to work with

The bottom line is, developing your niche means finding more clients like the ones you most enjoy working with, and then specializing in serving their unique needs. Technology can play a big role in doing that effectively and easily.

Use your technology to find connections among your ‘A’ and ‘B’ clients

A good CRM has filters, tags, and segmentation tools you can use to sort your client base by virtually any criteria. It can help you find the connections between the clients you most want to work with. For instance, you can use your CRM to sort for clients who work in the same field, have similar incomes, or live in the same area. It can tell you which clients share needs and have bought similar products.

A good CRM can even reveal which clients have common connections in their networks. For instance, you may be able to see that one accountant in your contact list works with six of your clients. Or that a small group of accountants, lawyers and consultants are connected to many of your top clients.

In effect, your CRM can help you build an ideal client profile. For example, an advisor may use her CRM to segment her client base and discover a group within her top tier of clients who share certain characteristics, like:

  • Occupation: Engineer
  • Age: 40-50
  • Married, two children
  • Income: $100,000+
  • Wants to protect family’s future
  • Risk-averse

These commonalities are the seeds from which your niche will grow. Capitalizing on those connections will allow you to grow your book in a way that naturally brings you more of the type of client you most want to work with.

Step Two: What do you want to work on?

Once you have identified who you want to work with, the next step in determining which niche is right for you is identifying the work you really want to be doing. In a sense, you’re creating an Ideal Work Profile‒a description of what you and your practice should be journeying towards. It should include the products you will sell, the services you will offer, the areas you will serve, and anything else that helps you define the type of practice you wish to build. Again, your CRM can help automate the process by showing you which products you sell the most, revealing common client locations and other key factors.

For instance:

  • Market: Local
  • Products: Life, DI and Seg Funds
  • Services: Retirement Planning, Estate Planning, Survivor Protection Assessments

Step Three: Putting it all together

The perfect niche for an advisor would be the market defined by the overlap between the people you want to work with and your ideal work. If we consider the examples from step one and two, they reveal a niche centred around providing retirement planning services and products to parents between 40-50 years old, with incomes of more than $100,000—with a focus on the engineering industry.

That niche profile can then be used to evaluate each client in your book of business. Those who most closely match your ideal profiles will become the first clients in your new niche. From that point on you can specialize in that niche, which means:

  • Narrowing your marketing focus to the industry, client type and product offering appropriate to your niche.
  • Developing your expertise in the market
  • Gaining a deep understanding of the problems faced by clients in your niche
  • Putting together effective solutions to those problems (combining products and your service and advice)
  • Building your brand within the niche
  • Growing your network within the niche

As you develop your niche, you’ll find that you meet prospects who are a better fit for your practice. Because of your understanding of their world and ability to solve their problems, more of them will become clients. Your expertise will set you apart from your competitors and your practice will thrive.

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