The riches are in the niches, with Kristen Luke

The riches are in the niches, with Kristen Luke

Why do top advisors who have a niche get 67% more take-home income than those who don’t have a niche? Kristen Luke is the founder of Kaleido Creative Studio, a marketing firm dedicated to helping advisors with their marketing and client acquisition strategies. She is also the author of the Amazon bestseller, “Uncomparable: The Financial Advisor’s Guide to Standing Out through Niche Marketing.” She describes how niche marketing strategies have helped advisors streamline their operations, service more clients with fewer staff, increase their revenue and even reduce their need to continue doing marketing over time. For more, visit PracticeLab.com.

Shaun Tucker

Hello, and welcome to the PracticeLab podcast, where we talk with top advisors about what makes them successful so that you can apply those lessons in your own business. I’m Shaun Tucker, the Director of Practice Management here at Capital Group.

A recent study compared top advisors who focus on niches with top advisors who don’t. And it found that niche advisors bring in an average of 40% more revenue. Even better, they keep more of that revenue. Their take-home income is two-thirds higher.*

Why does having a niche make such a difference? Is it possible that advisors who think they have a niche are actually doing it incorrectly? And how do you, an advisor with a background in financial planning but not in marketing, effectively market yourself to your niche?

For the answers to those questions, we turn to Kristen Luke. Kristin is the founder of a marketing consulting agency that works exclusively with financial advisors on their client acquisition strategies. She’s also the author of the bestseller “Uncomparable: The Financial Advisor’s Guide to Standing Out through Niche Marketing.” You might say that her niche is helping advisors win in their niches.

Kristen recently spoke with my colleague, Will McKenna, here on the PracticeLab podcast. Pay attention to how she defines a niche and how she recommends reaching people in yours. You might be surprised.

Will McKenna

Well, let me jump in. Kristen Luke, welcome to the PracticeLab podcast.

Kristen Luke

Hi Will. Thanks for having me. I'm happy to be here today.

Will McKenna

Right on. Well, you've got a new book out, which we're all reading and enjoying. It's called Uncomparable, and we're going to talk all about that. But I thought before we got there, it'd be great if you set the stage for us and tell us a little bit about your background and how you got in this business and what led you to helping advisors with niche marketing.

Kristen Luke

Sure. Well first I want to say the book is actually Uncomparable.

Will McKenna

Uncomparable. OK good.

Kristen Luke

It's trying, it's trying to contrast against incomparable, which is to be the best at something. It's about being different.

So just want to clarify that to start, but I got into this business, I really fell into it. I started back in 2005. It was my first job out of graduate school. I ended up working for a hybrid RIA in San Diego and was doing all sorts of marketing for them: the workshops, the radio shows, kind of you name it. I was helping out with that.

And then decided to go start my own business back in 2008 helping other independent financial advisors with their marketing. And since that time I've been really doing any type of marketing you can think of for financial advisors. And over that time really came to the conclusion like the easiest way that I think to market a financial advisor is if they're focused on a niche. And so really the last four years I've been focused on working with advisors who are primarily focused on a niche.

Will McKenna

OK, great. And let's go ahead and dig into that because the book Uncomparable, the subtitle is “The financial advisor’s guide to standing out through niche marketing.” Tell us more about that. Why should advisors focus on a niche? What's in it for them? What kind of problems does it solve for them and their business?

Kristen Luke

Well, it's very hard for financial advisors to stand out since, to a prospect, everyone looks and sounds the same, right? Everyone drops words like fiduciary or independent, comprehensive planning.

And prospects really don't know how to choose an advisor, so if they can't tell you apart, they end up choosing either somebody who is recommended to them, or maybe someone who they've seen their marketing over the years, or even just somebody that they happen to meet and just like. They don't even know if they're a good advisor.

So when you focus on a niche, it helps you distinguish yourself from other advisors. It shows the prospects that you want, that you are designed just for them, and then that gives them an opportunity to think, OK, I can compare this advisor to another one now, this advisor works with people just like me, whereas this other advisor works with I don't really know who because they just kind of do a little bit of everything. So it really helps you stand out and it makes your marketing so much easier.

It also makes you become a big fish in a small pond. In this independent advisory world, it's hard to become a big fish in a small pond unless you happen to live geographically in a more remote location or a close-knit community.

And so if you can narrow the audience of the prospects that you can potentially work with, there's those people will get to know you more. There's more word of mouth, more referrals, and so you do become well known within that market. And so having a niche really helps you solve all of those problems.

Will McKenna

That's great. Essentially, you're talking about the sea of sameness that that we all see out there in terms of advisors describing their businesses. You know, we provide holistic financial planning for families, high net worth families, et cetera, et cetera.

What are some of the best examples you've run across of advisors focusing in on a niche? I know in your book you talk about commercial pilots, you use that as an example, but what are some good examples in your experience of advisors really having success going after a specific niche?

Kristen Luke

Yeah, I think the ones that have the easiest time in a niche are the ones that are focusing on a specific profession. So, in my book, I talk a lot about an advisor who is focused on tech professionals. I also talk about an advisor who works with firefighters. And so, you know, those kinds of professions make it very easy because all those people congregate together. It's easy to become well known in a small pool like that, so those are kind of the more common ones are professions.

However, I am seeing more like life stage type of thing. For example, I've worked with a number of advisors who are focusing on kind of the longevity planning or end of life type of planning that they need to do so beyond retirement planning beyond those first, 10 or 15 years in retirement. But what happens after that? And that's a very much growing field, so it's a pretty good niche.

You know what, I don't consider a niche are things like women.

Will McKenna

Yeah, it's half the population.

Kristen Luke

Half the population.

Will McKenna

Or more.

Kristen Luke

Yeah. So you need to have described what the client looks like. So like women. And also what their problem is. So, a woman who has lost a spouse. That could be a niche, but just women alone is not one. I think the same about business owners, as well. Business owners by themselves is such a wide variety of people, you're talking about the startups and you're talking about the people who are trying to sell their business and everything in between. And so a niche would be business owners who are trying to sell their business.

Will McKenna

So business owners at an inflection point looking for guidance on how to sell their business and avoid kind of the tax implications.

Kristen Luke

Correct.

Will McKenna

Or as you say women, you know, going through a divorce or some something that takes, I think just a broad target market and turns it into an actual niche. Is that fair to say?

Kristen Luke

Correct. Yep. I always say you need one client and one problem.

Will McKenna

OK, got it. Let’s dig into the book itself. You lay out this six piece framework, the first of which digs into how do you select a niche as an advisor.

Maybe first of all, is it fair to say that most advisors already have a niche kind of hiding in plain sight within their book of business, and it's just a matter of focusing in to understand, oh, where are those niche opportunities in my book and let me go deeper there?

And then secondly, you give a lot of good information about how to choose a niche that fits with your capabilities and your interest. So maybe talk us through that whole thing.

Kristen Luke

Sure. So the niche piece as far as like do financial advisors have a hidden niche somewhere in their client base? They may find specific types of people at a certain industry or a certain company or maybe they're finding people with specific problems that they're facing.

So you can start there looking at your client base and saying OK, where can I narrow in from this?

But if you just looked at your client base, you've pretty much come to the conclusion very quickly that everyone just wants retirement planning. And so you do have to dig a little bit deeper. So what I recommend instead of just going through your client base is to take a moment to brainstorm three different areas.

So the first is passion. Like what do you enjoy doing? And this could be both professionally and personally. You know, are there certain activities you like to do personally that you would somehow like to bring into your professional life? Is there certain kinds of work that really lights you up and excites you? Are there certain types of people that you work with that you just really find a lot of joy and you bring a lot of value to those people? So that's where I would start is like brainstorming all of those people.

And then the next one is aptitude, and this is really like, what are you good at and what expertise do you have that maybe other advisors don't have? If you're a career changer like this is really great because you might have a whole decades of experience behind you that you can tap into, whether it's like a network of people that you have or just a skill set that you developed.

It could also be, you know, just kind of personal experiences that you have. Special needs planning is a really good example of that. Or I'm working with an advisor right now who has kids that are doing college planning. So she's looking at college planning as a niche because she's going through that and she has that, that particular aptitude. So you know and also, do you have any certifications or any special education that's going to be helpful? A lot of the advisors I work with tend to have done some sort of life planning or they've included life planning in their practice and so thinking about that and what kinds of people are going to be interested in life planning, because that's definitely a subset of the greater population.

And then the third area is profit and this is really important. Choosing a niche that's actually going to make money. And it sounds obvious, but I actually find that this could be problematic, especially with younger advisors. They'll try to work with other younger people who may not be able to actually pay their fees. And so it's important to think like, OK, who either has the assets or the income that they're going to be able to pay me, so this is worthwhile.

And if the answer is you can't figure that out, you need to figure out a different pricing strategy to be able to be paid for the advice that you give.

What you want to do then is just make sure that you're finding kind of the intersection between all three of those, and then that's going to be a good short list of niches to think about.

Will McKenna

Let's talk now about how do you go after them. And I think the next step in your framework is about, positioning your service in the right way, getting your messaging together. But curious, OK, once you help folks zero in on the right target markets and niches to focus in on, how do you coach them to then go after them?

Kristen Luke

Yeah. So the next thing is to really develop your messaging. I think this is one of the areas that gets ignored and it's actually one of the most powerful.

If you can have one simple message that everyone can repeat, then it's going to help you get more referrals. It's going to help your marketing message, any advertising, any campaigns, and it's just going to get the word out there so much faster. I find that a lot of advisers try to say they do kind of everything for everybody and then nobody listens.

So when we're working with people to develop what their message is, I just look at the basic formula, which is: One client, one problem, one solution, one outcome.

So what does that look like? This summer I hosted a summer book club and when we got to the chapter about position we actually did a fictional version of this whole process, and so I came up with this idea of like, OK. Let's take a ridiculous character like a Black Widow, right? She's like 55 years old. She's had 10 husbands. You know. What are her problems? And the group came up with, “Well, she needs to convert her assets into income and protect it from ex family members.” And then we talked about what the solution is and you know the solution is well, we turn your hard-earned assets into income while protecting it from lawyers and the IRS. And then what's the outcome? She knows she has enough money to live the rest of her life.

So when we combined all of that together, we ended up with this statement which says: We help Black Widows protect and convert marital assets into lifetime income, ensuring they never have to remarry again. So that kind of simplicity will really direct all of your campaigns going forward, because if you think about it, you could create content around legal issues, tax issues, retirement income issues.

And then you could talk about some more, like, lifestyle type of things, like vacations or, you know, traveling alone, those kind of things. You know, so when you have that kind of specificity around your message, it really helps focus everything else that you're going to do. So that's where we spend a lot of time with advisors is trying to get down to that sort of level of detail or just being very concise.

Will McKenna

That really core kind of clear, crisp message that makes a ton of sense. You know, you mentioned content as you were speaking there and you talk a lot about that in the book and the role that content plays in developing a profile and a bit of a following or at least a reputation as a thought leader in your niche as an advisor.

And obviously this is a strategy that you know and love. You've written a book about, your niche, which is helping advisors in their niche. Talk about content as a strategy and how you coach advisors to do more of that and be successful with that approach.

Kristen Luke

One of the reasons I really wanted to focus on niches in general, is because it is such a good way to use content marketing because content helps you stand out. When you are creating content that's just talking about the pain points or the aspirations of your niche, it gets noticed, right. If you look at most content that's on social media, it's all the same. It's easy just to, skim by it never even bother to look at it. But when there's social media content, blog or video or even a podcast that is very specific to the niche, people will stop and take a look at it.

And what happens is when people are consuming your content on a regular basis, it builds trust with them. So this is not a high-trust industry. It takes a lot for a prospective client to trust their advisor as they should, because that person is managing their entire net worth. You know their life savings.

And so when you can talk to them through content, that you know what their problem is and that you can solve their problem, then it does build this trust and it creates this connection that would not have been there otherwise. It also really helps reinforce your message, as I just mentioned with my fictitious Black Widow example, right?

It's if you just keep hitting on the same pain points, the same problem, the same outcome, the same solution, then by the time they come to you, they're pre-sold. They already said, you know, I already understand what you do. I believe what you believe. Sign me up. You know, they're just kind of meeting with you just to make sure that you are the live human being and just to check that box off from the due diligence.

Will McKenna

And is it important to take kind of a niche approach to your content itself, to really narrow in on some of the areas you talk about the pain points, but to be quite focused in your content and not just kind of cover the waterfront of a bunch of different planning or investment topics? How do you think about that?

Kristen Luke

Absolutely. In fact, I had a call today with an advisor and she's the one that is working through college planning. And she was telling me about some of her content topics. And one of them was something around like tax efficient investing. And I said, well, anyone can write on this, you know, let's get, let's get it back to your niche. What is it that they would want to hear?

And it's just as simple as saying, you know it's tax efficient investing for college planning, so or college funding. So that kind of just small tweak can really make a difference. And who wants to read it? Now, we all know it's the same advice whether or not they're doing college planning, or if they're just doing their regular retirement planning.

But because you're speaking directly to them, they're more likely to notice what you have to say.

Will McKenna

You know, I think there's a tendency among folks who know a bit about SEO, search engine optimization, to think, oh, I should maybe cast a broader net to get search engine equity, when in fact you might want to go narrower as you're saying and not cast that broad net. That's a very good point.

Kristen Luke

Yeah, a lot of the long tail in SEO, right? So not like find an advisor, but find a financial advisor who specializes in nurses or something like that. Like you won't get the same volume, but you're probably getting the people who really are looking for you. So that kind of detail can actually be more effective, even though you're getting less traffic.

Will McKenna

Interesting. OK, great. Let’s transition now and talk about what you call the plan and how to put this to work in your business.

And you did mention when you were talking about some of those marketing techniques, it's not necessarily easy. And one of the things you point out the plan is that this is a marathon, not a sprint. And it can take as long as three years and beyond to get this kind of approach really humming and off the ground. I know you cite some Michael again another Michael Kitces study that talks about taking three years to get a niche approach going. Why is that? Why does it take a long time and what do you advise your clients about when they're approaching that kind of marathon?

Kristen Luke

I wish it didn't take three years, but that's how long usually it takes for people to know, like and trust you.

You can speed that up if you are doing more volume of marketing I would say. So if people are seeing you like posting on social media every day and if you're sending out weekly emails and you're really building your list, you can accelerate that a little bit.

But especially in this business, it takes people a long time to make a decision that they want to take action on their finances. And so you might have to hit them up over and over and over again, reminding them what their pain points are, before they finally make the decision to contact you.

Will McKenna

In terms of people just being familiar with who you were and your expertise and finally making a decision about that, that's a very good point. It takes a while for a client to really make that decision to change advisors or to connect with a new one.

One of the things I really liked in your book is the emphasis on actionable insights, things that people could really put to work. Because I think in this business, tell me if you see it differently, but a lot of the ideas are out there are known. You know, it's not like we're inventing things out of whole cloth. But success often just comes down to execution. Do you really put this into work in your business and are you consistent with it?

And I thought that was a powerful part of your book. You break it down into years one, two and three and highlight some of the dos and don’ts. Let me just mention a few that caught my eye.

You say to focus on activity goals rather than outcome goals which you also liken to vanity metrics. And then you said avoid random acts of marketing. I love that phrase. I'm going to start using that, but maybe walk us through what you mean.

Kristen Luke

The one thing we can control is our activity. I'm a big fan of some of those productivity books out there that talk about habits, and if you can just control your habits and how much you're doing things every day, you will see what the outcome is on the other side. So if I, if we're going back to old school, you know, if I make 20 cold calls a day, how many people book an appointment? What is the outcome?

The only thing you can control in that situation is how many calls you do that day. When you're creating a marketing plan, I always say well, set what your goal is, whether that's how many pieces of content you're going to create or how many people are you going to meet with one-on-one.

Once you have done that, and if you meet your goal, you will see what the outcome is. How many prospective clients schedule to call, how many clients did you get, those kind of things, and then you can adjust your activity going forward. So it's something controllable. Outcome is just not controllable.

And then you mentioned vanity metrics, I want to comment on that. So many people ask about, should I measure how many likes or follows or all those things I get on social media. Those kind of analytics should only help you make a decision about what other marketing you want to do.

So if you have the post on a topic that gets a lot more interaction than another one, then you know that's a more popular topic and that should give you guidance on what type of topics to do going forward.

By itself, it's not that useful. It's not telling you if you're being successful or not. That doesn't necessarily directly relate to getting clients.

Will McKenna

Use it as sort of an input to your editorial calendar.

Kristen Luke

Correct.

Will McKenna

Your content decisions, yeah, that makes a lot of sense in terms of, traffic on your website or exactly how many followers you have on social media.

Kristen Luke

It doesn't really matter because at the end of the day I've seen sites where they're getting 5,000 hits a month to one particular article, but none of those are converting because the article topic is about moving out of state and it's just not something that's going to get people to move forward.

So he's having all of this traffic, but that doesn't mean that that's leading to clients.

Will McKenna

Yeah. So tell us about random acts of marketing. What are they and how do we avoid those mistakes?

Kristen Luke

This is something that everyone does. You find some sort of shiny object that you hear about and you follow it. So these are things like you go to a conference and you hear the latest about some sort of social media thing. You should be doing. Let's say I want to do YouTube shorts or I'm going to do TikTok or whatever it is that people are talking about at that time.

And all of a sudden you go and that's what you try to implement, but you haven't really thought about how that fits into your overall strategy. And then it just ends up being a total waste of time.

You need to start first with what your strategy is. Think about where your niche is congregating, what topics are interested in. And then if you find that whatever that latest thing is that you've just heard about actually fits, is aligned with the content that your market wants to hear about, and it's in a location where they congregate, then you can add it to your marketing plan.

But I see this all the time where people will just start doing something because they think they should be doing it, and it almost always fails.

So avoid random acts of marketing. If you hadn't thought about it the last time you sat down and really strategized your marketing plan, then it's not something you should add in.

Will McKenna

Got it. One of the things that struck me in here, and you do focus on marketing, you talk about the fact that modern marketing has become so complex, and with digital media, digital marketing, it's becoming ever more complex. New techniques coming online all the time.

Hard for advisors to stay on top of that and really master that. But one of the points you make here is that by focusing on a niche, you don't necessarily have to become an expert in marketing. Can you talk about that? Why is that the case?

Kristen Luke

Yeah. So over the years that I've been doing this, I've seen different marketing opportunities come and go. The first one was social media and every advisor who got on social media right away, they did pretty well with it and they got a lot of clients from it. And then they went out and spoke to the rest of the world about what they were doing. All the other advisors came on the social media and then became less effective because it was just a lot more noise there.

Next time was around SEO and search engine optimization, so a lot of advisors who got into it in the beginning did really well with it. Now everybody is optimizing for search engines and it's just getting a lot harder to stand out and to be found that way.

Google reviews is another one that came out just a few years ago. When I saw advisors using Google reviews and taking advantage of that opportunity, they were actually getting a lot of website leads directly from that. But again, you know, as things change as people get into it, there are now so many different advisors and firms out there using it, it's no longer to an advantage.

So my point about marketing becoming more complex is that it's harder and harder to kind of stay on top of those trends. You have to find the trends and then you have to know how the algorithms are changing and you have to make sure that, you know, whatever platform you chose doesn't change drastically like Twitter did or could be potentially banned like TikTok could be.

So those kinds of things, it's really difficult to stay on top of that for most advisors. So if you pick a niche, then you only really have to focus on those places where your niche actually congregates.

So you don't have to worry about, do I have to be on TikTok, do I have to do Instagram reels? Do I have to do all these things? Because you just figure out where they're already congregating, and you spend your time there. You're not worrying about the algorithms as much at that point.

You are also just trying to become a part of their community and getting that word of mouth and referrals from being a part of that community. That even if all the social media went away, or you couldn't do search engines weren't the same because of AI and everything changed, you would still be well known within that community and be able to still get prospects from that.

Will McKenna

You use the term those places. By that I assume you mean in real life where folks congregate as well as online. But talk about that and how do you think about building that community or connecting with those folks where they congregate both offline and online.

Kristen Luke

Yeah, I mean, it could be physically where they are. I mentioned this before, I worked with someone who works with firefighters.

He actually will drop off a box of his books once a year to every fire station. And they read it and they ask him for more. I've also seen advisors who will participate or become well known in different circles with therapists. This is somebody who I know that works specifically with special needs planning. So he's gotten into those therapist circles where they're actually recommending his books to the people in their therapy circles.

It can be conferences, it can be online places as well. So Facebook groups is a place that I usually tell people to start looking if they're looking online. You know, there's so many different places now that you can find people. It's just a matter of doing a little bit of research and asking the people in your niche, like, where do they spend their time. You know, where do they find other people like them?

Will McKenna

And so, for advisors who are following this plan and focusing in on a niche, what does success look like for them? What are the elements that they enjoy in their business that when they make that change after the two or three years, when they can really get it going?

Kristen Luke

In the beginning this is going to take a lot of time and effort just to kind of get that flywheel going where things are just going to flow naturally.

After you get that going, you're going to find that you're spending less time on marketing because all the word of mouth and the referrals and all the content is really going to start working for you. So you find that you end up spending less time and less money on marketing to bring in clients. I just want to reiterate that's after several years in the beginning. It does take a lot of effort to get it going.

But that is really something I see over and over again. Sometimes people will stop marketing and they'll still get clients for years after that just because they've already created all that goodwill within their niche community.

The one thing that I hear a lot of feedback on and it's not from marketing, but it's that when they focus on a niche, they just become a lot more streamlined in their operations.

And so they can take on more clients, they can do less work because everything they're creating is specifically for one niche, one problem and it just makes everything so much easier for them.

So they simplify their systems. They can take on more clients with fewer staff, and it just makes their business more profitable. And really, because you're only working with people you really like, just end up being happier. And you have your systems in place, so you're doing less of the work you don’t want to. You're generating clients more easily and it just makes your business all around, just kind of better operationally and just flowing and makes you happier at the end of the day.

Will McKenna

That's great. Yeah, it sounds like the flywheel gets going. You become known for that thing and then you can really just, you're not spreading yourself thin around a bunch of different problems. You really just develop that repeatable process. Um, and great to hear people are happier when they're doing this.

What about you? What's next for you and your business? You're, out there promoting the book and working with, you know, more clients. But what what's next for your business?

Kristen Luke

Well, we have launched along with the book a companion program called On Niche and it really helps advisors launch into a brand-new niche and a lot of the things that I talk about in the book falls into what we help them with this program.

And so we're just continuing to build that and add more resources and new campaigns that are very niche focused for the advisors so that they can continue to just become experts known as an expert in their niche.

Will McKenna

That's great. So how can advisors learn more about you and your business?

Kristen Luke

The best way would be to go to onniche.com, on our website. We've got all sorts of resources there. Also I am on social media. I'm only on LinkedIn now for the most part. I have gotten rid of all the rest of them, but you can find me on LinkedIn.

Will McKenna

Speaking of becoming more focused only on LinkedIn, that's good.

Kristen Luke

Yes, so connect with me on LinkedIn or visit our website onniche.com.

Will McKenna

That's great. So onniche.com folks out there listening, consider picking up this book. It's well written, a lot of great information in there. Kristen Luke, thank you for coming on the PracticeLab podcast.

Shaun Tucker

Well, that’s it for this episode. We really hope you enjoyed this conversation between Kristen and Will. If you liked what you heard today, hit the subscribe button and consider leaving a rating and a review, because that helps other advisors discover this show.

And if you want to learn more about niche marketing, check out Capital Group’s client acquisition workbook. It walks you through a five-step process for defining and marketing to your niche.

PracticeLab is brought to you by Capital Group. You can find all these episodes and more at practicelab.com.

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