A target market is simply whom you serve best and therefore wish to serve most. Or where you do your best work as an advisor, rep, agent, planner, broker, producer, or related wholesaler. It makes a lot of sense to discover, create, and ultimately establish a target market.
Well, from a networking standpoint, having a target market makes it easier to determine where to go, what to say, and with whom. (Think about that for a minute!) And it makes you much more referable to those in the know - clients, associates, referral sources, family, friends, former employers, and the like. Pretty good reasons, right?
That said, I don't see enough sales producers in financial services focused on a target market.
Here's why! You feel...
You May Discourage a Prospect that's Outside of Your Target Market
If you're speaking with a physician and your niche market happens to be manufacturing companies, it's still beneficial to mention your focus on manufacturing. You might say something like, "Most of my work is focused on the manufacturing industry." That leaves the opportunity for the physician to say, "Although I'm not in manufacturing, do you think you could help me with my insurance needs?" As an advisor, the fact that you're focused on an industry gives the impression that you're a specialist and probably very good at what you do. Hopefully, you are!
You Can't Accept Business that's Outside of Your Marketplace
Of course you can! Given the example above, you shouldn't turn away new business (in or out of your target market) unless it's not your area of expertise, it's beyond your realm, it's beyond your capacity, or you simply don't want to for some other reason. Remember, depending on your communication, having a specific focus should create more outside opportunities - not less, to appear in your pipeline.
You May Not Choose the Correct Marketplace
Certainly, your chosen market should have a rationale. You probably shouldn't decide who your clients are going to be based on the flip of a coin. Maybe you used to work in a certain industry, profession, market segment, or niche. Or you're passionate about a field. Or personally impacted by a disability or illness. Or have family members connected to a profession (I come from a family of police officers). Or have friends that reflect a specific theme (most of my friends are electricians). Or you identified an industry where there is a need. Find two or three markets that you feel are a good fit. Remember, these will be your clients!
You Won't Be Able to Open Up New or Different Markets
Again, sure you can! I wouldn't suggest changing your target market every other day. Think marketing plan. Adjust accordingly but work your plan. Give it a good two or three months to determine if you've chosen the correct niche and if you're plan of action is sound. As opportunities present themselves, you can make decisions that make good business sense but stick to your plan otherwise it makes no sense to have one.
You Won't See Enough New Prospects
Sales is all about activity. Whether you have a target market or not, if you aren't actively prospecting, you won't see enough people and won't grow a book of business. By having two or three target industries or professions, it should make prospecting easier because you can determine the best places to go (association meetings, trade associations, conferences), best things to say (elevator speeches, questions, value props, sales pitches, presentations), and the best people to speak with (those you know and want to know). Think big fish in little pond. When you get bigger, you'll be ready for a bigger pond!
You May Be Limiting Yourself
I've mentioned this several times but it bears repeating. I would suggest NOT having more than three target markets. Less is more. As soon as you start focusing on more, it will get to the point that everyone will become your target and it will defeat the purpose. The purpose is to be focused! If everyone is your target, then no one is your target. It's kind of like making everything a priority. Keep yourself focused and I promise you, if you have your sights set on the right industry, profession, niche, geography, or dynamic, your opportunities will be limitless.
I know there is always the concern of not writing enough cases, signing enough accounts, or dropping enough tickets. By being more focused on marketing to the clients you want, you'll land more of the clients you want. That's how it works! Common sense, I know.
The reality is you can't do business with everyone. If you could, the success rate of financial advisors would be much higher than it is right now.
And that's no myth.