I had the pleasure of recently interviewing Lisa Petronio from Strategic Retirement Partners for our Elite Advisor profile series.
She’s done a fantastic job of identifying and succeeding in her target market; Petronio loves nonprofits. Six years ago, she only had a handful of nonprofit plans, but they now represent 60 percent of her book.
It’s her passion, and she designs her practice to serve them.
She’s made exceptions, she says, but it “can be painful for both the advisor and the client.” If the client needs specific expertise, such as a defined benefit plan or ESOP, Petronio recommends partnering with someone who specializes in those areas.
It’s therefore all about target markets.
When asked how to define a target market, Rick Shoff had a surprising answer.
“You don’t, it defines you,” Shoff, managing director with CAPTRUST’s advisor group, explained. “Each advisor and the firm they build will naturally attract clients who value what they do and how they do it. The advisor then refines their value proposition and firm to own that target market. Said another way, your target market finds you, and then you perfect it.”
As advisors grow their practice, they become more and more clear about who they want to serve.
The challenge is to remain committed to your target, and not be distracted by marginal clients.
“All revenue isn’t good revenue,” Shoff adds.
True, but it’s hard to turn away business. I vividly remember my decision to say “no” in the early years of my career. It was extremely hard when revenue was scarce. As my practice matured (translation: overhead was covered), it became much easier.
I currently define my target market as a particular type of sponsor located nearby.
Specifically, I like to work with plan sponsors who, like me, understand that their employees best interest is also their best interest. Some sponsors don’t care much about their 401k, or helping their employees build a retirement nest egg. They view the 401k as a necessary expense instead of a valuable benefit. I define “nearby” as whether or not my coffee would be cold by the time I reached their business. And no, I don’t have a Yeti.
Opinions vary on how to approach or define a target market. In a smaller town, it may be easier to target a plan sponsor-type instead of a specific industry. The larger the market, the easier it is to identify and specialize in a niche.
Ross Marino, CFP, CPFA, CeFT, is the founder and CEO of Advisor 2X | Excel 401(k) and Transitus Wealth Partners. He can be reached at rmarino@rekonintel.com.
