Do you have the guts to set yourself apart?

In a recent post, Seth Godin points out that creating a competitive advantage takes guts.

A few days ago, I wrote about the importance of identifying a niche marketing to it. It makes you more attractive to prospective clients, and makes you referral. I noted that it is counterintuitive.

It is more than that. Marketing guru Seth Godin noted in a recent blog post that it takes guts.

Like others before him, he points out that working harder is not going to make you more successful anywhere near as much as working smarter or different. He also made a point I had not considered before – that simply getting more efficient at your work turns intellectual work into factory work. And that engages you in a race to the bottom.

He noted that overcoming the inertia to get better at your craft, or to be different in your profession, and to create a competitive advantage takes guts.

Why are we so insistent on describing ourselves and our practices exactly the same as all other advisors? Why do we describe what we do and for whom we do it the same way so many others in our industry do? You would think that we would understand that using the same words as everyone else will be utterly ineffective at giving prospects a reason to choose us instead of anyone else. Part of the reason is because being creative is really hard. And part of the reason is probably because it is scary to do something different than everyone else.

It is tempting to believe that everyone has chosen to do something one way because it's the best way. It is not – it is the average way. And it takes a measure of courage and self assurance to make a different choice than your peers.

So, as you lay out plan for the coming year, be brave. Be different. Achieve more.

For More Business, Prospect Fewer Clients

It is utterly against the DNA of most advisors, but if you want to be a success at attracting referrals you must choose not to pursue good prospects.

A lot has been written about target marketing and having a niche. Yet I am surprised by how many advisors I meet who cannot bring themselves to commit to a market because it means not attracting some profitable clients.

Here's a classic example: I was conducting one of my Secrets of Referral Marketing workshops and we were discussing finding a niche. We talked about how specialization and aiming at a small part of a market can bring more clients than that advisor can successfully service. Think about it – if you are the one advisor that 1% of the people in your geographic area really needs, how many potential clients is that? Where I live, that's about 800 households. So it is okay to basically ignore 99% of the population. If you can be the advisor with the most compelling value proposition for that target market, what do you need to achieve your goals? Ten percent of that potential market? 20%? And that's without leaving town. I can drive an hour east or west and have another market almost as big.

Everyone agreed. If we designed an irresistible message for the 1%, we can accomplish as much as we would ever want to. Nods all around. Is everyone okay with that idea? Yes, all the participants say it makes perfect sense. We will determine who we can specialize in, and create plans that will successfully attract them, even if no other prospects (outside the niche) respond to the message.

And advisor raises his hand. "So, if I meet a prospect outside my target at a cocktail party, and he has a rollover of $1 million, and I tell him what I do and it doesn't interest him at all, it's okay?" Yes, it's okay.

Immediately another participant objects. "But we have to say something that would get them interested – he would be a great client!"

From the day we enter the profession, we are trained to pursue any prospect who could be profitable. Eventually, we end up with a diverse client base that can be a challenge to service and a value proposition that attempts to attract everyone and is compelling to practically no one. When we first try to market to a target audience, we find ourselves unable to resist the dilemma of "and I do that, too. And that…" It is counterintuitive.  As much as we have discussed it, many, maybe most, advisors still cannot bring themselves to focus on a single, targeted client profile.

But if we want people to talk about us, to refer us, we need to be known for something specific. And that means leaving a majority of the population out of your marketing and prospecting plans.

Narrow and deep beats wide and shallow. Less is more. Get known for being the single go-to advisor for something specific, and you can eventually get to the point that many of those prospects find you.

To Get Referrals, Your Clients Must Understand Your Target Market

When Andrew Sullivan, of Sullivan and Schlieman in Atlanta, formed his client advisory board, one of their top recommendations was to give each of them a card listing his services and accomplishments. Their request was "tell us how to sell you."

In a recent client advisory board I facilitated, the participants told the advisor "tell us who your ideal client is, so we know who to refer." It is not the first time I have heard that kind of feedback from clients.

Experiences like this raise two critically important points. First, there is clearly a strong willingness, even an enthusiasm, on the part of clients to make referrals. This is not really surprising – Julie Littlechild's research has shown that as much as 91% of our clients are willing to refer. (It also demonstrates why participants on an advisory board tend to be a firm’s best referral sources!)

Second, it is the strongest proof I can imagine that advisors must clearly define what they do and for whom. They must be able to describe their niche, their target market. Remember, these advisory boards are composed of the advisors’ best clients – the ones who should know best what they have to offer.  And yet, they asked for guidance on what kind of clients the advisor hoped to attract.

If you believe you have defined your target client, here is how you can test how well you have done. Try this experiment – next time you talk to a couple clients you are on particularly good terms with, and who would be willing to take a minute for a little thought experiment, ask them this question: If I sent you into a cocktail party in the next room full of all kinds of people, and I asked you to refer a couple of them to me as prospective clients, how would you figure out who would be the best ones to send to me?

I suspect that most clients would answer "I don't know." And if that's the response, you will know why you aren't getting more referrals. Your clients are not sure who you're looking for. And whatever you have done so far to define and communicate your target market, your value proposition, and your ideal client, you still have work to do.

Defining who you want as clients and what unique solutions and experiences you provide to people like them are the foundation of referral marketing. Get those two things right, and attracting new clients becomes much easier.

The Top Three Reasons Clients Choose You

Critical to attracting clients and receiving referrals is a financial advisor's competitive advantage, a strategic differentiator, a unique value proposition, something that enables people to understand why they should choose you, or send you a referral, over all other financial advisors.

You must be known for something.

Here is one simple marketing exercise to help determine whether there is something about your practice that separates you from the competition: List the top three reasons clients should choose you over other advisors. Go ahead, take out a piece of paper and write them down. Come back when you're done.

So, what did you write? Are they three things other financial advisors would not write, or that other advisors could not claim?

Probably not, and don't take offense. For most of our careers, we have been trained and encouraged to use the same clichéd terms. This part is hard. I have worked with hundreds of advisors, and reviewed hundreds of advisor websites, and practically all of them say essentially the same thing. Many say EXACTLY the same thing! Here is a list of things that will not differentiate you:

• Trust
• Experience
• Good customer service
• Financial planning
• Retirement planning
• Individualized recommendations

Even people who speak and consult in our field frequently get it wrong. At FPA Denver 2010, Vern Hayden, in his talk "Differentiate Or Die" gave a partial list of potential differentiators. But, these, too, will not differentiate you:

• Fee-only
• Objectivity
• Being a CFP

Some of these are "table stakes." Things that must be true, or that you at least must claim, to earn the right to talk to a potential client at all. Some of these may be strengths; an aspect of your practice that will increase client satisfaction but not necessarily separate you from many other advisors.

And let's get this out of the way right now – I know, everybody says it but you actually do it. Got it. I know you are vastly better at whatever it is than the half-million other advisors in the country. Even so, here is the hard truth: when everyone else says the same thing, how is a prospective client to know?

Here is a simple test to help determine whether what you are saying will differentiate you. Ask "could an advisor say the opposite and still be credible?" For example, if you say one of your top three reasons is because you provide great customer service, could an advisor say to a client "I do not provide great customer service" and still be in business? Probably not. On the other hand, if one of your top three reasons people in your target market should come to you (assuming for the moment your target market is obstetricians) is "I know the particulars of planning and risk management for obstetricians," could an advisor say to a potential client "I do not know the particulars of planning and risk management for obstetricians?" Assuming the advisor is not targeting obstetricians, sure.  In fact, most should say it, because that is a legitimate specialty.

This is not a perfect test, but it is one way to evaluate whether what you claim has the potential to separate you from the competition.

Your differentiator, your niche, your unique value proposition, may be the hardest marketing question to answer. But answer it you must, or your business development and referral programs will never come close to their potential.