Natural Market vs. Target Market: An Important Distinction

You’re going after your target market; you’re already serving your natural market.

While they’re often used interchangeably, understanding the distinction between these two terms can sometimes be a lightbulb moment for those working on positioning their practice. Here’s why the difference matters.

One of the most common marketing pitfalls advisors fall into is choosing a target market solely based on asset potential. Sure, it would be nice to work with business owners because they’re wealth accumulators with an ongoing need for financial advice. But what do you have to offer that’s different from all the other IAs targeting the same prospects?

If you’re running a successful practice, it’s more likely that you’re already doing something uniquely well and that “something” is of particular value to a subset of your client base. Often IAs develop an investment or planning process, a service focus, or a specific client experience, simply because they’ve recognized the needs of their top clients and have honed their approach over the course of many years. This offering is the crux of your value proposition, and it could be the starting place for a strong market positioning with an audience that you have a much better chance of appealing to.

So consider, out of all the individuals you serve, who are the clients you have the best relationships with? Which ones seem to see the most value from the work you do for them? Which clients do you share the most insights and knowledge with? Which prospects are easiest to connect with?

Once you’ve identified your natural market, start defining it as a target market. What are the needs and wants of someone in this group, and what services or features would you highlight to show your relevant value? Could you use your existing expertise to build a content library for this audience?

Generally, if your natural market and target market are well-aligned, you’ll likely find the process of forming a value proposition, generating content and optimizing your outward brand becomes a much smoother and more successful process.