“Sell to women—it’s a great niche market—one that’s growing!” We’ve all heard the advice, but at 52 percent of the population, can women really be considered a niche market? Underserved as a group perhaps, but definitely not niche. Selling to women is a bit like breathing air, you need to do it if you’re to survive.
That is little consolation, however, when it comes to figuring out just how you are going to do it—sell to women that is.
First off, forget about women as a niche market, forget about selling to all women and start thinking about what kind of women you would like to work with. Retired Baby Boomers? Gen X-ers in their 30s? Women business owners? Affluent women? Widows? Start with some straightforward questions to help you narrow your focus: Where do my interests and talents lie? Which group of women can I relate to best? Which group in my community could most benefit from my services? By concentrating on one element of a much larger group, you can more easily adjust your product offering, revamp your sales technique and hit the ground running as you begin to work with a targeted group of prospects.
But how do you get started? How do you decide which niche within this “niche” market to pursue? Serendipity and geography are factors not to be overlooked.
Such was the case for Lori Price. A financial advisor with Lincoln Financial Advisors in Norwalk, Conn., Price’s foray into the women’s market began, ironically, with men. Fifteen years ago, a relative asked her to work with a retired men’s group that wanted to start an investment club. More than an investment club, Price says, “What they really wanted was someone to talk to them about financial issues.” One day she was mentioning her work with this group to a friend who was a member of the Junior League. Soon after, she found herself addressing this group of high-net-worth women on similar issues.
“They loved it! And it evolved into [classes] about four times in spring and fall. We talk about timely issues that are focused on personal finance,” says Price. And some of her best clients come from this group. “Women, once you have their trust, are very open to what you recommend. They are rational, sometimes too conservative—which is OK, very loyal and considerate of my time as a working mother,” she adds.
Price is firmly committed to these groups. But make no mistake, this is not seminar giving. She speaks almost exclusively to existing groups. That way, she says, you have no overhead—no cost for marketing, publicity or the room. All of that is taken care of by the sponsor. But, she stresses that you need to address the group more than once, and recommends no less than three times: “That way they get to really know you, and you get a tacit endorsement from the group. The new participants that attend think, ‘They have this speaker coming often, she must be good.’”
Seeing a need
But Price did not stop with these women’s groups; another event pushed her toward her calling. She says, “In 1998, my biggest clients were getting divorced. I thought that I had better learn more about it.” She did. After picking up Carol Ann Wilson’s book, The Financial Guide to Divorce Settlement, she says, “I immediately knew that this was a niche that would be good for me. There is a lot of high-net-worth divorce in my area.”
That led her to the Institute of Certified Divorce Planners where she studied for her certification in divorce planning for financial planners, which evolved into new direction for her business. She found there was a lack of financial support for the nonfinancial spouse during the divorce process for high-net-worth couples. Her niche: She helps a woman understand what her future will look like financially with the proposed divorce settlement, and then helps her get it structured or restructured so she is financially secure now and in the future.
Her advice to those attempting to tap the high-net-worth market: “You have to charge a fee. Otherwise you end up taking every warm body, and you will not segregate the clients you want. It also gets a commitment from clients, so that they don’t abuse your time.”
This is one woman’s approach to the high-net-worth market. But what are the general facts you should know to help you start in this area—or revise your game plan if you have already waded in?
Perhaps more than facts to uncover, there is some myth-busting to be done in this market. In a study due out this month, researchers found surprising results about the high-net-worth woman and her finances. “There are two areas we have believed [high-net-worth] women and men are different … and they are not,” says Sharon Hadary, Ph.D., executive director of Center for Women’s Business Research, (The study, Active and Engaged: The Investment Goals and Strategies of High Net Worth Investors was conducted by the center and sponsored by Goldman Sachs.)
“There has been a convergence. High-net-worth women and men are about the same in terms of assessing their [investment] risk. The majority [of all respondents] said they took reasonable risk. … Women are not more likely to be conservative,” stresses Hadary. “And in their evaluation of how much they know about investing. Most people expect women to be more unsure or less knowledgeable about their investment options and strategies. But this isn’t true. Two-thirds of women and men said they do not know as much as they need to know. There is no difference between them.”
This certainly sheds new light on the approach advisors should take when marketing and selling to high-net-worth women: They are generally well-educated about their investments and ready to take reasonable risk to grow their money, but are hungry for more information. They are also, according to the study, most likely to make changes in their investment strategies only during their regular reviews, not in reaction to current events like a slide in the stock market—especially good news in the current bear market.
You also need to know that attracting high-net-worth women clients takes special attention to detail. Debra Nichols, senior vice president and director of women’s financial advisory services for Wachovia, says this subset of women—and women in general—are looking for a long-term relationship with their advisors: “They want someone they can trust and who offers information, advice and guidance.”
Your method for reaching them should be fine-tuned to their wishes. According to Nichols, direct mail is a big no-no for high-net-worth women, and advertising does not rate much higher with them. She says, “You need to beef up your public relations, your image in the community and get those referrals. … Use only warm leads—no cold calls.”
You can track your success in this market in hard numbers with yardsticks like sales successfully closed, but Nichols warns that you should also pay close attention to the “soft” numbers or results. Although they can be difficult to quantify, soft results such as generating positive public relations and gaining referrals from current clients are important events to note—and track—as they are the base on which to build future business.
Women business owners
When she began her practice 30 years ago and was looking for a niche, Fran Jacoby, a financial advisor with Prudential in Indianapolis, asked herself, “Where is the greatest need, and where are people not going?” Her answer: women.
“I have always been interested in small businesses, so I chose to start working with family farms. … Many times while farms were controlled by males, I saw that women seemed to be dealing with a great deal of the work, but not dealing with a lot of the decision making,” she says. Since then her practice has flourished, and has grown from helping family farms to a wide range of clients, many of them women business owners.
Jacoby says that her female clients are comfortable with her because she addresses their issues. “We expect to live longer than men; we expect to be alone. Unlike 30 years ago, women are choosing to be single, to get divorced; their independence is much more important than it was 30 years ago,” she says.
One group of clients that Jacoby is currently focusing on is prominent women attorneys. “Women business owners are incredibly dynamic,” she says. “And they are savvy about what they need. Many of these women have spent years building a successful practice some with close to 100 employees, and in the process they have given up a lot of in the course of building their business, such as getting married and having children. They have made great sacrifices to build their business … and now they are in their 50s, and they begin to feel that loss.”
As their advisor, she sees her role as one of helping them establish a legacy that doesn’t have to do with a husband or offspring. “I ask them, ‘You have this wonderful business and no close heirs, what would you like to do with your money?’” says Jacoby. The consultation does not focus on just financial needs—the successful business has seen to that. Instead, she asks them questions like: What kind of hobbies do you have? What are you going to do after you stop working? What kinds of charities interest you? What kind of legacy do you want to leave? “No one has ever asked them that,” she says. “There is a whole generation of self-made wealth, and I am helping them focus and channel that into a legacy—charitable trusts and foundation.”
Jacoby has found another niche within the “niche” of the women’s market. And it happened, as in Lori Price’s case, through serendipity. Her lawyer called and wanted her to talk to one of his female clients to discuss issues that were “very sensitive”—sensitive enough, he thought, that it took another woman’s touch to address them. The case: A woman business owner had her husband working for her. She was concerned, however, about the eventualities, the “what ifs.” What if we divorce? How should the business be passed on? What if my husband and I have difficulties and he doesn’t work, how do I protect my children? How do I protect my husband, but pass the businesses on to my daughter? This one case spurred her interest in advising women business owners on issues of “maintaining control and gifting.”
Like Price, Jacoby has found that she can most easily reach her women clients—and educate them—in groups, which she likes to call “conversations over lunch.” “The difference between working with women and men: Women need a thousand words, men need 10. Women need to talk out their issues and build relationships. They need to trust you first, so there is more time involved.”
To address that “need to talk it over,” she sets up quarterly lunchtime seminars using two rooms. One is for a prelunch discussion, which is an informal setting with a couple of speakers (one being Jacoby) and time for a question and answer period. Lunch follows in the other room with a formal 15-minute presentation, which she focuses on one issue.
“Then I follow up with a thank-you note with the date of the next seminar, as well as a phone call. And I ask them, ‘Do you want to meet and discuss any of these issues?’” she says.
Where is the market for you?
Is there a slice of the women-business-owner market for you? The answer is a resounding yes. There is a thriving market of ready-made clients waiting for you.
According to the Center for Women’s Business Research, over the last decade, women have been starting businesses at twice the rate of businesses in general. The growth has been democratic, with the number of women-owned businesses flourishing in all types of industries—from agriculture and mining to manufacturing and construction. That means you can target an industry or business type that is of interest to you—or one that you are knowledgeable in—and thrive, as there will be no lack of a future market.
Also interesting to note is that over this past decade there has been an expansion in growth in these businesses in employment—up 40 percent, and revenue—up 30 percent. Sharon Hadary says these figures should spark advisors’ interest, “It tells us not only do we have a lot of start-ups, we are also seeing growth in the businesses themselves—and so there is a greater appetite for the products and services advisors have to offer such as retirement planning, liability, all of the kinds of insurance products for business. But also the owners have a bigger appetite for personal products, as well.”
That last piece of information may prove critical to you as you reach out to this segment. Women business owners have a greater need for financial planning—investments as well as retirement. And according to Hadary, 86 percent of women business owners use the same provider in their personal lives as in their business lives—68 percent do it consciously. “So,” she emphasizes, “If you are not cross marketing both personal services and business-to-business to women business owners, you are leaving money on the table. My advice to financial advisors: Women business owners are a fantastically high-potential market for you … and you should be out there finding products and services for their business and for them personally because it can be extremely profitable.”