The financial advisor’s guide to creating an effective value proposition

Financial advisors striving to grow their practice face a range of challenges. One of the most important is crafting an effective value proposition that will set an advisor apart from the competition. Robert Arzt, founder and president of Polaris One and InsuranceCoachu.com, recently shared some critical strategies and some simple steps to help advisors determine their value proposition.

Creating an effective value proposition

According to Arzt, advisors often face challenges in crafting their value proposition due to the following issues:

1. Lack of Clarity on Differentiators: Many advisors struggle to identify and articulate what truly sets them apart from their competitors. They may find it difficult to pinpoint unique aspects of their approach or expertise, he said.
2. Too Broad of a Target Audience: Without a clear understanding of their ideal client, advisors can struggle to create a message that resonates. “Trying to appeal to everyone often dilutes the value proposition,” he said.
3. Difficulty in Linking Benefits to Client Needs: Translating what they do into specific and tangible benefits for clients can be challenging. Advisors often focus on features of their services rather than outcomes that matter to clients.
4. Limited Client Feedback: Many advisors don’t actively gather insights from their clients about why they chose to work with them or what they value the most, Arzt said. “Without this input, crafting a compelling and accurate value proposition becomes more difficult,” he added.
5. Overcomplicating the Message: Advisors may feel the need to include too much detail, leading to overly complex or jargon-filled value propositions that fail to engage clients effectively.

By addressing these obstacles through client feedback, refining their focus, and prioritizing clarity, Arzt said that advisors can develop stronger and more impactful value propositions that effectively convey their unique value to prospects and clients.

So, how can an advisor create an effective value proposition? Arzt shared the following step-by-step guide:

4 steps to get started

Step 1: Clarify What You Do. Advisors should begin this process by answering these essential questions, Arzt said: What do you do? Clearly articulate the products or services you provide, he added.

1. How do you do it? Explain your processes or methods.
2. How do you do it differently from others? Identify the unique aspects of your approach.
3. Why is that difference beneficial to your clients? Highlight the advantages of choosing your business instead of that of your competitors.

Step 2: Define Your Ideal Client. To create a value proposition that resonates, advisors need a clear picture of their target audience. They can answer the following questions to describe their ideal client:

1. Who are they? Consider demographics, professional roles, or specific industries, he said.
2. Why did they choose to do business with you? Reflect on the motivation and decision-making factors of your existing clients.
3. What did they like the best about working with you? Understand their favorite aspects of your service or relationship.
4. What need did you fill for them? Identify the specific problems you solved or goals you helped them achieve.

Arzt said that advisors may find it helpful to gather this information directly from their best clients by asking them the questions mentioned above.

Step 3: Highlight Your Distinctiveness. In addition, Arzt said that advisors should consider the following additional aspects that make their business stand out:

1. What makes you distinctive? Define the unique qualities of your business.
2. What expertise or certifications do you hold? Emphasize your credentials or specialized knowledge.
3. Is anything you do proprietary? Mention exclusive tools, methods, or processes you use.
4. What do you offer that goes “above and beyond” for your clients? Share examples of exceptional service or added value, he said.
5. What do you do better than your competitors? Highlight strengths that set you apart.

Step 4: Craft Your Value Proposition. Arzt said that by answering the following questions, advisors can create a value proposition that:

• Clearly states the results they deliver.
• Differentiates them from their competitors.
• Resonates with their ideal client’s needs and values.

For example, Arzt said that a well-crafted value proposition might be: “We help [ideal client description] achieve [specific results] by [your unique approach], delivering [key benefits] that others in our industry can’t match.”

“Take the time to refine your statement until it feels authentic and compelling,” Arzt added. “Once finalized, your value proposition will serve as a powerful tool for attracting prospects, strengthening client relationships, and driving business growth.”

 

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