Ongoing research into how advicers can structure their practices to be better and more successful has consistently highlighted the benefits of choosing to serve a specific niche. In fact, the more specific the niche, the better, as a highly specialized niche not only allows an advicer to differentiate themselves in a crowded marketplace of other 'generalist' advicers, but also helps them build a more efficient practice where they serve clients who share similar characteristics (and puzzles to solve!). Along the way, advicers develop deep expertise in serving their clients while creating a repeatable process that expands their capacity to serve more clients than they could possibly serve as generalist advicers. Yet, in practice, 'niching down' can feel like a big step for advicers, who may feel uneasy about turning away potential clients who may not fit their ideal client profile. As a result, many advicers who say they serve a particular niche may instead be targeting a particular market (e.g., business owners, women, or pre-retirees) rather than a true niche.
In this guest post, Kristen Luke, President of Kaleido Creative Studio, discusses her formula for defining a particular niche, steps an advicer can take to evaluate a potential niche for viability and suitability, and strategies for advicers to consider to refine their chosen niche for long-term success.
A first step in fine-tuning a niche is to drill down into a broader demographic or occupational group and pinpoint a segment that shares a common (financial) problem significant enough for them to seek an advicer's help. To do that, advicers can use the "One Client + One Problem" formula, starting with a group that resides within one of 5 broad categories (career, life event, specialty, mindset and values, and affinity) and then identifying a specific problem that they need an advicer's help to solve.
The next step is to assess the viability of the niche and determine whether it is a good fit for the advicer. More specifically, advicers can evaluate 10 factors to answer those questions, including the niche's specific problems, urgency, complexity, profitability, growth potential, findability, the competitive landscape, and the advicer's suitability for working with the niche. While not all of these factors are equally relevant, the strongest niches will have purchasing power, be easy to target, and have complex financial needs.
Even if a niche is well-defined, it might not be viable enough to serve profitably; if that's the case, an advicer can further refine their chosen niche or take other steps to improve their chances of success. For instance, advicers focusing on a niche consisting of people challenged by a particular pain point may target those with a need that other advicers aren't addressing and adjust their offering to make it more affordable, further their own education, take steps to improve their credibility (which might include writing a book or presenting at conferences), and gain better access to members of their niche.
Ultimately, the key point is that advicers who serve a well-defined and narrow niche whose members have a specific and difficult problem are in a much better position to build a thriving, successful business. By addressing the needs of their niche, advicers can better differentiate themselves, craft tailored and compelling marketing messages, become more referable, and create better efficiencies within their practices. And by using the "One Client + One Problem" formula and the 10 Factor evaluation rubric to evaluate and refine a niche, advicers can become coveted go-to experts and beacons for the people they serve!
