What’s your value proposition?
Why should I pick you?
Why should an investor choose to work with your advisory firm?
QuickSprout, a content marketing company, has offered up an infographic (see below) on how to grow your business, by first knowing your business, and then documenting your specialness in a formal value proposition.
A quick definition from QuickSprout: “A value proposition is a promise of value to be delivered. It’s the main reason a prospect should buy from you (and not from your competitor.)”
But not everyone has or knows their “value prop.” Only 69% of business-to-business firms have a value proposition, said QuickSprout.
A value proposition explains how you solve an investor’s problems and pain points, and specifies the benefits people can expect from your firm.
A value proposition, on the other hand, is not a slogan, not a tagline, not an elevator pitch.
A valuable value proposition is clear, concise, and knowable, in seconds, by your target market.
And it also appeals to emotions, not to rationality.
For financial advisors, creating a distinct value proposition may be more challenging than for the average bear. According to Michael Kitces, Director of Wealth Management and Partner with Pinnacle Advisory Group, “It’s far more difficult to convey the value proposition of an intangible long-term service like financial planning. Determining whether an advisor provided a good Return On Investment in the portfolio is one thing, but how do you describe the ways an advisor tries to help a client get a better ‘Return On Life’?’”
How to Plant Your Flag
This non-distinction is not lost on investors. A Pershing study reported that “60% of investors found it hard to distinguish among advisors because many made similar promises.” (Pershing provides global financial solutions to advisors, RIAs, broker-dealers, family offices, and investment managers.)
According to Pershing, top advisors may want to consider “Planting your flag on the unclaimed territories where very few advisors are making claims that investors want to hear.”
Rarely mentioned in top advisor propositions but of high importance to top prospects were mentions of trust, integrity, fiduciary duty, accountability, capital preservation, and legacy. So if you highlight these attributes, and of course live them, you’ll likely have a valuable value proposition.
On the other hand, many advisor value statements frequently emphasized bringing peace of mind, providing simplicity, and focusing on estate planning. Few investors attached high importance to these themes as distinguishing characteristics.
The statements frequently mentioned by advisors, and of high importance to investors included phrases like “Working in your best interest,” “Providing investment management programs,” and “Developing tailored solutions.”
The following are a few best practices advisors should consider in developing and delivering a value proposition, cribbed from Matt Oechsli of the Oechsli Institute:
It’s Short. Drop the big words and industry jargon. And plain beats fancy.
It’s Conversational. “Elite advisors are not trying to impress; it’s a more humble, albeit, clear response. They are genuine and sincere; they are clear about the service they provide and state so clearly,” Mr. Oechsli said.
It’s Focused on the Prospect, Not on You. “Elite advisors are genuinely interested in the other person and after responding to the question, are able to conversationally ask a question that gets this person talking about him or herself,” Mr. Oechsli said.
Can’t think of what to say or how to phrase your value proposition? American Funds has an automatic value proposition generator tool. The robo-tool, said American Funds, helps advisors “Create a customized value proposition statement for the audience you are working with.”
Looking to score high on your advisor marketing IQ? Take the 10-minute marketing challenge, and see if and how knowing your value proposition can help market your firm.