What does market positioning actually mean?

Market positioning is an extremely prevalent topic among advisors and firms looking to grow. But despite the fact that it’s used so frequently—and possibly because it’s used so frequently—most IAs would benefit from a fresh look at what this term means and its implications for their practice.

Here is a simple, visual way to think about market positioning and to evaluate your own practice’s position. We’ve broken down the concept into three general scenarios, in which the vast majority of advisory firms could be categorized.

In the first, pictured below, “you,” the advisor, is a generalist. You are not targeting any one group and you are one of many service providers seeking access to high-value clients. It could be the resources or services of competitor firms, or simply the sheer number of other options, that puts your competition between you and the clients you want.

Promoting your practice with this positioning means mass marketing and generic advertising that can easily melt into the white noise of the industry.

In the second scenario, you’ve identified a specific market you want to reach—for example, corporate executives within a certain industry that is prevalent in your local community. You’ve worked with a number of individuals in this niche and have built up a service offering to suit their needs. This process has led you to a distinct value proposition: a relevant message for a specified group.

But your competition still looms large. That’s because—again, either through deeper resources or sheer numbers—these firms are more successful at getting in front of this niche market audience. Your specialization is a tangible reason for target clients to consider working with you, but you have not yet made that value visible to them.

In the final scenario, you’ve successfully positioned your practice. You have a target market, you’ve defined a value proposition, and you have a clear method of outreach—for example, making inroads in a local corporation through referral relationships and quarterly retirement planning seminars.

Marketing your practice with this positioning can be less expensive and more effective than the first two scenarios. The message you share has greater relevance and the leads you generate are more likely to be viable.

Your practice is positioned in the market whether or not you’ve done it strategically. If you approach the process with some intentionality, you can stand a better chance of getting value out of your marketing dollars, and generating organic growth in a highly competitive landscape.