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Fine-Tuning Your Value Proposition
Issue 2 August 2008
There are more than 250,0001 practicing investment professionals registered with the Financial Industry Regulatory Authority™ (FINRA™) in the United States. In such a highly commoditized marketplace, how can you stand apart? Value propositions for investment professionals and financial services firms are often vague, emphasizing capabilities rather than intangible value, making it difficult for investors to determine who may best fit their needs. You need to create a compelling value proposition that speaks to your target audience and makes the case for why you should be chosen over others with similar offerings.
Let’s start with defining what a value proposition is: A value proposition is the value you promise to deliver to your clients for engaging your services. In other words, if you had just 30 seconds to explain to a prospect what you do and the value you can bring to them from a financial perspective, what would you say? With such a limited opportunity to make an impression, you need to deliver your value proposition in a concise and simple way to grab the attention of your target audience. Once you have their attention, you can fill in the details and begin setting the foundation for building a long-term relationship.Examples of vague value proposition statements:
“We offer investment solutions to meet all of your financial needs.”
“We provide a personal approach to financial planning and the investment needs of our clients.”
None of the above statements can be considered “strong” value propositions. Take some time to review your current value proposition. Is it specific? Does it convey the value you bring to your clients? Does it set you apart? If not, take this opportunity to enhance it by considering the five building blocks outlined below:
> Guarantee. This is your personal “pledge” to your clients. It outlines your commitment to do everything in your power to ensure that you will not only meet but exceed their expectations.
> Tools. Tools are the specific products and services that you offer. Alternatively, they can also be the
processes and investment models that you will follow to help your clients achieve their objectives.
> Differentiation. This is what makes you stand out when compared to your competitors. What are your strong points? What makes you unique?
> Validation. Validation is where you explain your value and why you are worth the cost. As mentioned above, there are more than 250,000 practicing investment professionals. This is a commoditized industry, but you are a specialist delivering unique value and clients should expect to pay for your advice.
> Reputation. Nothing makes a prospective client more confident than knowing that you are respected in the industry. Use existing clients as references for potential new business.
Evaluating and fine-tuning your value proposition is an important exercise that you should conduct regularly to ensure you are continuing to effectively communicate your value to your target audience. To learn more about fine-tuning your value proposition, please e-mail Vanessa Oligino at voligino@pershing.com, Practice Management Consultant, with over a decade of experience providing marketing services to investment professionals.
[1] The Race for Top Talent, Moss Adams LLP 2007