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The number of certified financial planners has been growing over the past few years. Meanwhile, new tech solutions like roboadvisors and automated investing are becoming more popular. Those two trends mean that it’s not enough anymore to be qualified, experienced, and great at your job. You need to be those things, too, of course. But you also need to differentiate yourself from the ever-growing pack and communicate the unique value you bring.
That pressure to differentiate yourself can end up backfiring if you’re not careful, though. To understand why you need to understand a core principle of web design known as Jakob’s law.
In web design, Jakob’s law states that users prefer a site that works similarly to the sites they already know. While it might seem like originality is key to setting your website apart from the rest, it can end up causing frustration and dissatisfaction if it doesn’t feel familiar and intuitive to navigate.
This is because of the mere-exposure effect—a phenomenon in which people start to prefer one thing over another simply because they’ve seen it more. So, when they come to a new website for the first time, they’re coming with expectations they’ve set based on other websites that feel related.
It’s because of this design principle that so many search engines exhibit the same basic design as Google. The search bar in the middle and little else cluttering up the page. If you were trying out a new search engine and the search bar was in the bottom left underneath a menu of different features, you’d likely feel a little confused at best and frustrated at worst.
The same holds true for other websites. Most news sites follow a similar format. Most online banking services offer the same basic layout and tools.
This doesn’t mean the product or service they’re each offering is exactly the same. News sites still manage to differentiate themselves from each other effectively without straying from that familiar news site layout that users expect. Banks still manage to set their online banking services apart from each other, even while offering similar core services.
As a financial advisor, the key takeaway is that, as counterintuitive as it sounds, there is such thing as too much differentiation — at least, too much of the wrong kind of differentiation. Here are three ways a poorly-executed differentiation strategy can backfire.
According to a Financial Customer Experience Report published by Qualtrics, client trust and investment track record are the two key criteria potential clients look at in financial advisors. If your differentiation strategy is based on, say, offering the lowest fees, then you’re not really addressing either of your audiences’ top priorities.
Being different for difference’s sake will do more to confuse prospects than attract them. These potential clients are coming in with their own preset expectations in mind about what a financial advisor should do.
So you first need to reassure those prospects that you do, indeed, fulfill those basic expectations — much like a bank adopting a familiar webpage layout helps first-time users confidently navigate that bank’s online services.
Without that familiar context, your audience might be left wondering what exactly you’re offering and how that compares to your competitors.
So, part of your unique value proposition is that your firm includes a large enough team that no single advisor is handling hundreds of clients at a time. Awesome. But why should a client care how many other clients you’re juggling? More importantly, how does that value proposition relate to their expectations or help you better meet their needs?
If you’re not framing your unique value in familiar terms based on what your prospects are looking for, you’re not clearly communicating why that difference matters.
While differentiation can backfire, you also don’t want to over-correct and present yourself as a generic, nothing-special advisor. But how do you strike that balance? Here are a few tips.
The best way to stand out from the crowd is to focus less on that crowd and more on the ones whose attention you’re trying to grab. Find out what pain points prospects are experiencing. What frustrations have they run into when consulting other advisors? What do they expect an advisor to do for them?
If you focus your efforts on finding the best way to solve their problem and make the advisor relationship as “user friendly” as possible, you’ll do far more to differentiate yourself than you would by constantly focusing on, say, keeping your fees lower than everyone else’s.
Keeping tabs on what your competitors are offering is useful, but only to a degree. You want to make sure your services meet a benchmark level as those of other advisors vying for the same client demographic. You also want to make sure your fee structure isn’t wildly out of line with the going rates.
Beyond that, though, don’t worry about what others doing. Worry about your clients’ expectations and whether or not you’re meeting (or, better, exceeding) them.
Avoid overly technical jargon in your marketing and your communication with clients, not only because the average person won’t know what that jargon means, but also because it can obscure what you’re saying.
While avoiding jargon, make sure you don’t skip key terms and concerns your audience is likely looking for. You might layout your range of services, using standard terminology like “financial planning” or “portfolio management” so that prospects can immediately identify that you offer what they need. Then, within those categories, highlight the differentiators that make your financial planning or portfolio management services exceptional—including why that difference is relevant to a prospect’s goals or concerns.
One way to balance differentiation with the need for familiarity is by offering options and customization that allow clients to essentially build the advisor experience they want. One simple example is offering multiple ways for a client to schedule a meeting with you.
For those who prefer the old-fashioned way, invite them to call you to set up a meeting. For those who want the convenience of modern solutions, use software like Calendly that lets clients schedule meetings automatically, without needing to get you on the phone.
Likewise, you might offer clients the choice of remote or in-person meetings.
When you provide this kind of customization, you’re essentially letting the client differentiate your service for you by allowing them to tailor your service to their exact needs and preferences.
