Lessons from other industries
Going back to my days in college, I can recall a number of the key marketing principles that were ground into me; the importance of research and knowing your customer, understanding buyer behaviour and the role of the four P’s (product, price, place and promotion) among others.
However in my day-to-day work with financial brokers today, the principles that I find myself returning to more and more to address your challenges are Segmentation, Targeting & Positioning (STP). Many advisers today recognise the importance of these strategies as they attempt to make best use of their limited marketing resources, be they time or money or both.
There are also valuable lessons to be learned from how these principles are applied in other industries… but more about that in a minute.
So to start this 60-second marketing lesson, here is a definition of each, as set out by Philip Kotler, the grandfather of marketing education.
- Market Segmentation: Dividing a market into distinct groups of buyers with different needs, characteristics or behaviour, who might require separate products or marketing mixes.
- Market Targeting: The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
- Market Positioning: Arranging for a product (or service) to occupy a clear, distinctive and desirable place relative to competing products (or services) in the minds of target consumers.
What’s happening in the financial broker market in Ireland?
Many financial brokers realise that a “one size fits all” proposition just doesn’t cut it any more. Either for the client who is looking for more than a generic service, or for the adviser who cannot profitably or successfully deliver the same service to all clients irrespective of their value, characteristics, needs etc.
As a result, many advisers are undertaking segmentation exercises, analysing their client bases and potential markets, most often by value. Others are also segmenting but by different dimensions – some are focusing on SME’s, others on specific professional groups.
A smaller number are then going on to specifically target sub-sections of their client bases and target markets with specific propositions, while offering a different proposition to other groups of clients. Some are even offloading their lower value clients to only target their desired groups. Others are identifying specific occupations that they will target and also those that they won’t. And then sticking to this!
Finally, savvy advisers are taking that final step of actually positioning their business and their communications to appeal directly to their target markets, even at the risk of alienating other potential customers.
What can financial brokers learn from other industries?
The best examples come from the airline industry. They make it very obvious that high value passengers get a superior service, they certainly don’t apologise for it! Apart from very noticeably “turning left” on entering the plane, we see 1st & business class passengers enjoying benefits such as;
- A pick up service to bring them to the airport
- A fast track route through the airport
- Waiting in a private lounge
- An airline official at their beck and call to manage any issues that might arise
- A shuttle service directly to the plane so that they don’t have to wait at all
- Planes are sometimes even delayed to wait for a late 1st class passenger!
- And then you’ve all the on-board perks!
Now who wouldn’t start to feel a little special?
There are similar stories of exceptional services offered to loyal users of some of the world’s leading hotel chains – room upgrades, limousine services, free laundry, sourcing tickets for high demand events as well as in-room food and drink services. All to make you feel that bit special.
So what can a financial broker take from this?
Develop your service packages
Develop service packages for your business that reward clients depending on their value to your business. Make your high value clients feel really special, reward them for trusting you with their money by giving them a truly rewarding client experience. Build a moat around them and pull up the drawbridge from your competitors by providing a second to none service.
Let your mid-tier clients feel valued by your business, while at the same time making them aware that there is lots more you can do for them (if they are willing to pay for it).
And of course your no/low value clients will begin to realise that it’s a business you are running and that they don’t have 24/7 access to you. If they want access to superior service (ongoing advice from you), they pay. The same as when they book a flight or a hotel room.
Do you know which of your clients should turn left and which ones should turn right?