The One Marketing Decision that will make you wildly successful
I was speaking with a group of IFAs after our 2 day BootCamp (Training Program) and one of them asked me “How much should I spend on Marketing? Where should I invest in Marketing?”
This is a question on every IFA’s mind along with this key question “How should I market?” A lot of you might think that Marketing is all about making classy advertisements, billboards, TV, campaigns and so on. The reality is that these are merely tactics.
At the heart of marketing lies Strategy. This is the first thing that you must nail. I mean that once your marketing strategy is clear, you can then delve into tactics. The Why of Marketing (Just like the Why of Investing) is more important than the What of Marketing. The objective of this post is not to delve into the 4Ps (Product, Price, Promotions, Place) of Marketing but to first make an extremely hard choice in terms of “Where will I Focus?” Let me explain what I mean by that.
Let’s say there are 4 ponds. For example;
- HNI (₹5 Crore +)
- Affluent (₹2 – ₹5 Crore)
- Mass Affluent (₹25 Lakh – ₹2 Crore)
Your first decision to make is “Which Pond should I operate in?”
For a typical IFA practice, anyone and everyone is your client (and this was something true for me at the start 15 years back). You take on pretty much everyone as a client. The standard response is, “I don’t like saying No to anyone. One day this client will become big.” Yes, both these statements are valid but do they help you build a thriving firm? Like I said in one of my previous posts, Time is your Capital and how & where you chose to invest it will drive your success.
When you start taking clients on board at random, you are building a very inefficient firm in terms of your offering and service model. In most IFA firms, the top 20% of your clients subsidize 80% of the other clients. To give you an example, I evaluated a firm which had 360 clients and ₹45 Crore of Assets. The Top 60 Clients (less than 20%) had around ₹35 Crore of Assets and the Top 100 Clients had almost 96% of the assets. The smaller clients were unhappy as they thought that they were not getting the attention they deserved. What ends up happening in such cases is that most of your clients are unhappy because you can’t dedicate time to them. You have to realize that by saying NO, you will not only do justice to yourself but also your client. This is because your smaller client can be a priority for someone elsewhere he/she would get personalized service they need.
Now let’s go back to the key decision “Which Pond should I operate in?” Pause for some time and think about this question for yourself.
This is relevant because each pond will come with its own set of 5C’s (Competencies, Competitors, Consumers, Collaborators and Context.) The key is to understand is that competencies and competitors will be different for you in each segment. By this, I mean that the Ultra High Networth and HNI segments will have different competitors (including the level of competition) and will require different competencies. So it is very critical for you to take stock of your competencies, understand who is your service most suitable for and what do you have to offer them (your value proposition). These are critical things that have to be addressed even before spending a single rupee on Marketing.
Your marketing will be very different based on which Pond you pick. So First Nail your pond. This might seem very easy but this is the most difficult thing to do
I hope you loved this post. Feel free to share it with your fellow IFA colleagues and friends.
My objective here is to add real value to as many IFAs as possible and help you build the wealth management firm of the future. Let me know your thoughts and if there any topics that you would like me to cover.