If I had a pound for every time a private client lawyer, accountant or surveyor said “We are targeting High Net Worth” clients I would be a very high net worth person myself! Whilst saying you are marketing professional services to High Net Worth clients sounds like a good strategy it isn’t focused enough. Do you define wealth in terms of assets or income? If so, what level of assets and income? The core issue is the specificity of how you define your segment – because the more specific your targeting, the easier it is to identify the appropriate channels, influencers and promotional tools to reach your desired clients.
There’s introductory material on segmentation and more advanced thinking on segmentation if you are unfamiliar with the concept.
So, here are some thoughts on how you might refine your High Net Worth client segments.
What does your analysis show?
It’s good to start by looking at the “high net worth” clients you have at present. What wealth and income do they have? Is it domestic or international? Is it in financial products or real estate? Is it family money or business money? What attributes do they share? Where are they located?
And how did these HNW clients come to you? Did they come through others in your firm? From the private client or property teams? Which marketing or business development activities were successful in reaching these clients? Did you generate them through marketing or Or were they referred to you by third parties? Which intermediaries and sources in particular were effective at generating the right sort of clients and work? And although the clients may have been attractive, was the work profitable?
You might also consider the skills and expertise (and networks/connections) of your people and how much time they are prepared to invest in business development – in this sector you are likely to be in for a long term effort.
What do you mean by High Net Worth clients?
“Has lots of money” and “Will pay high fees” are not the answers required. Think about whether you define the segment in terms of liquid assets such as income or cash in the bank (if so, how much?) or in terms of property assets (again, how much?), land assets or a portfolio of investments.
CACI’s segmentation tool ACORN identifies a number of groups based on location, wealth and socio-economic group – wealthy achievers includes: wealthy executives, affluent greys and flourishing families. Whereas its urban prosperity includes prosperous professionals, educated urbanites and aspiring singles. I remember Mills & Reeve advising me that they measured success in terms of the number of clients they had in the West Midlands Rich List – that was their definition of “high net worth”.
The super-rich are likely to require complex and specialist (usually offshore) advice and may seek advice from another jurisdiction. They may even use a Family Office to access advisors. Some firms target overseas investors – for example, Asian or Chinese nationals investing in UK property.
The largest, “institutional” advisers will be targeting those with landed estates and inherited wealth – and the boundaries between business, professional and personal relationship will often be blurred as they share many of the same backgrounds, interests, colleagues and pursuits. Sometimes this is referred to as the rural or landed estates segment.
Media and celebrities?
Many firms focus on those with significant newly acquired (and perhaps short-lived) wealth – particularly those in the sporting arena. Celebrities are another category. The most likely route is through their agents and managers.
Sector or profession specific?
The media is full of reports of the huge bonuses paid to bankers and hedge fund managers as well as the “fat cat” salaries of the legal profession. Some target segments such as “City Executives” or “High earning professionals”.
If your firm has a strong commercial department then it makes sense to try and reach the directors of the small and medium sized companies (SMEs) that they serve. However, many in larger organisations may have policies preventing their directors from using the same advisers for business and personal advice. And you’re going to need to be good at cross-selling which, as we all know, is tricky in the best circumstances.
Concerned grandparents and parents?
It may be that rather than targeting the younger generation with today’s high incomes, you look to their parents and grandparents who may be concerned about the family’s wealth passing effectively down to or even being protected from the next generations. A law firm recently targeted this segment with its “Connected Generations” thought leadership.
The great and the good?
With a strong charity or Not-For-Profit practice in your firm then there’s a good chance you will come into contact with the great and the good amongst the trustees and patrons. Similarly, if you have links with the right sorts of private (public!) schools then this can sometimes present opportunities for you to offer your services as a governor to establish a presence in this community.
Sexual and religious groups?
There are many in the gay (LGBT) community with significant wealth and those from different racial or religious groups who require advisers who are sensitive to and familiar with the specific demands and challenges that they face. A specific geographic location may be required. Professional advisers who come from or share a similar background – and speak the same language – will add significant comfort.
Non-domiciled folk or those who spend time in different parts of the globe are likely to have substantial wealth and complex affairs. But there is literally a world of difference between the quiet ex-pat couple in their retirement home in Spain and the royal members of the Sovereign states.
Is it a real segment?
Marketing theory offers “tests” of good segmentation and one of the critical tests is whether those in the segment would recognise themselves or identify with that segment. Other tests consider whether you can measure the size/attractiveness of the segment and whether you can reach it cost effectively through the available channels.
Is it realistic?
Once you have identified your segment and assessed whether you are going to attempt to reach it directly or indirectly (for example, through intermediaries such as banks and other professional advisers) you need to check whether you have selected an appropriate segment for your firm.
For example, the leading rural land agents often have offices in grand period buildings with worn leather chairs and bone china for tea (and even, on one occasion, a rather fine gun dog in the corner) – where their landed clients will feel more comfortable than in a clinically white modern office block.
Similarly, if you have the international jet set in your sights then you need to have more than one person with the required language and cultural skills and a willingness to spend regular time establishing a network of contacts in the target foreign territory. I still remember with fondness the West England law firm who produced promotional bags bearing the logo “Devon and Dubai” to carry their papers on their regular trips to the Middle East. Furthermore, if you are in regular communication with folk on the other side of the world then you will need to organise your communications so that you can respond to calls in the middle of the night.
As much of the effective marketing for these segments involves a commitment to being in the right sort of places to establish and maintain relationships then you need to consider whether your appetite and marketing budget will stretch to major sports and cultural events.
Whilst there may be media (whether this is in glossy magazines such as Country Life or Harper’s Bazaar) that reach your target audience the question is whether you can write sufficiently well and about suitably general (as opposed to technical) issues to gain coverage in them. And, here’s the rub, the people you are trying to reach are more likely to value discretion to preserve their reputation and confidentiality than a high profile firm that is splashed all over the media. And whilst social media and blogging may establish you effectively as an expert in an international arena, it may not be the preferred communication method of your target audience.
What’s the trigger?
Most high net worth individuals who are aware of their need for professional advisers will already have them in place – and probably have long standing relationships spanning many generations with real trusted advisers. The issue then is how to identify what triggers – beyond the usual life events such as births, marriages, retirements, major sales and purchases, and deaths – might prompt them to consider appointing a new adviser. Being clear about the relevant triggers and/or developing a sufficiently different proposition will be key in attracting attention and interest.
This is just scratching the surface – I wrote more extensively about segmentation and the rest of the marketing process for private clients of legal services – including “high net worths” – in the Law Society’s “Probate Practitioners Handbook”. It also contains (approved by the firms of course) case studies from: Boodle Hatfield, Forshaws Davies Ridgway, Kaye Tesler, Laytons, Nelsons, Rix & Kay, Royds, Russell-Cooke and Seddons. The latest edition is due out is September.