In an effort to retain their clients, grow their businesses and build for the future, the current market environment is causing many financial planners to consider their ‘positioning’ strategy.
How does the market see us? How do we want to be seen? Why do our clients use our services? If we asked them for referrals, how would they describe our business?
Positioning is about understanding your niche and defining your competitive edge. Positioning creates clarity both externally and internally. It energises the people and resources in a business toward a unified strategy for future growth.
As Jack Trout, author ofPositioning:The Battle for Your Mindtells us, “positioning is thinking in reverse. Instead of starting with yourself, you start with the mind of the prospect. Instead of asking what you are, you ask what position you already own in the mind of the prospect”.
Whether you’ve been in business for 20 years or have just hung your shingle on the door, understanding your position in the market not only provides focus and clarity for the future, it can revitalise your relationships with both clients and staff and promote strong growth.
“If your clients’ perception and yours don’t match, then the issue for your business is probably positioning,” says Chris Dionne, a partner in business coaching company, Shirlaws.
“We look at organisational efficiency, sales and distribution planning, client services, and management and succession. Positioning is the key to focusing these strategies within a business.
“Our clients benefit greatly from third party support, by listening to their clients and staff, and gaining a much clearer understanding of their business,” Dionne says.
So how does a financial planning business, in a competitive and crowded marketplace, secure a strong position for the future? How do you define your business to differentiate it from everyone else’s? What are the strategies that will focus your business in the areas most likely to create growth? Are you in business without a position?
One of Shirlaws’ clients, a small financial planning practice in North Sydney, reached its 10 year milestone last year, an achievement in itself.
Although the business was doing well and had been achieving steady growth, like many small to medium enterprises, it relied almost solely on the sales ability and energy of the business owner for its primary source of income.
The business had three other staff — a paraplanner, a receptionist and an office manager. Each person had a different perception of the business, the services, the clients and the market, and relied heavily on the focus and input of the business owner.
The financial planner who started the business was working harder than ever. Knowing he had to grow the business, he was unsure of which specific direction to take. What he did know was that he needed to decrease the dependency — to ‘free’ him of the day-to-day reliance the business had on him.
During the first few months of coaching, Shirlaws invited the staff and key clients to participate in various processes that provided focus about the perception of the business in the clients’ minds, and the internal alignment of its organisational culture to its market position.
The business now has a strategy for a target market, has clearly defined its services to specifically cater to its preferred client base, and has designed a recruitment strategy that aligns the staff to its market position.
Renewed focus on the strategic issues has positioned this business to capture the opportunity when markets rebound. The owner’s and the business’s energy levels are at an all time high.
As Dionne points out: “Having a defined market position really helps a business communicate with its clients and referrers, particularly accountants, who are better able to differentiate you from other financial planners. It also makes a big difference in closing a sale because your prospects are often better qualified by the accountant, and can even be pre-sold.”
In beginning to focus your business on its positioning strategy, you will need to be specific. Some of the questions you need to ask are:
* What do we specialise in? For example, corporate superannuation and/or self-managed superannuation funds?
* Who are our competitors and what are they doing?
* What’s different about our business offering?
* Who regularly buys from us? For example, is our market retirees or wealth creators?
* What do our clients say about our service?
* How do we structure our pricing? For example, are we ‘fee-for-service’ only, or do we package fees and commission into the plan?
* Do we have the skill to determine our positioning and other strategic issues?
And the power of positioning is just as relevant to an advanced business with a strong market presence. Alignment of the internal functions to a clearly identified market position gives a business the focus and impact of a laser beam.
Ten years ago, if service was the number one value in choosing which carrier to fly with, the airline most Australians chose was Ansett. If safety was your biggest concern, Qantas was your pick. Various airlines entered and exited the market but few could compete with the positioning power of these well established Aussie icons.
During the last decade, however, market research indicated that most Australians were dissatisfied with what appeared to be a duopoly and as well as service or safety, the market was now demanding better prices for domestic travel.
Enter a bold, new player, Virgin Airlines with “keeping the air fair” — a positioning strategy that enabled Virgin to do what seemed almost impossible — slice off its own piece of the domestic airline pie.
Understanding exactly what the Australian consumer wanted and focusing their external resources to create a market position that met the demand, Virgin Airlines carved itself out a landmark position.
But just as relevant is Qantas’ positioning. Without ever having advertised its safety record or creating any marketing slogans to announce its ‘safety’ position, Qantas is internationally recognised as the ‘safe’ airline. How has it achieved this? Why do we immediately link ‘safety’ to Qantas?
The answer lies in their internal focus across all areas of the organisation. When Qantas chooses its in-flight caterers, its criterion is ‘safety’. Food is only prepared and delivered in countries where no health risks exist.
When Qantas recruit and hire staff, their flight attendants are mature, giving passengers an experience of safety.
Qantas only permits aircraft to land at those ports identified as ‘safe’ zones. Their maintenance programs are rigorously scheduled to achieve maximum safety both on the ground and in the air. Both their staff and customers have an experience of safety, identifying and branding Qantas’ unique position domestically and overseas.
As new industries are spawned and more players enter the market, the power of positioning has never been more relevant.
Alignment of these issues is the key for a business building strength and position in the market, and enables a business to grow internally and externally in alignment with its market position.
Chris Dionne is one of the founding partners of international business coachingcompany, Shirlaws.
