In 1960 a marketing expert named E. Jerome McCarthy created a model for marketing called as the 'Marketing Mix' which consisted of 4 P's – Product, Price, Place & Promotion. These Marketing Mix principles soon became a very popular tool useful for businesses to help determine a product or service's brand offering and to attract & retain customers. Taught in every B-school, the tool has been at the heart of marketing ever since and virtually every marketeer uses it to design offerings.

Marketing is a continuously evolving discipline and we may find ourselves to be left behind if we stay still in this increasingly complex, dynamic and competitive world. The Marketing Mix too has undergone many revisions by many experts with time. Today, we take a closer look at this fundamental concept in marketing from the perspective of a financial advisor/distributor. We hope our effort would help you learn and encourage you to relook into your own marketing strategy.

The Marketing Mix.

The Marketing Mix consists of principles which carry relevance in strategising, planning, promoting and delivering any product/service and in the process attracting and retaining customers. The original Marketing Mix with 4 P's was more suitable for a product centric era of marketing where physical products were sold. So let us first take a look at the original 4 P's in today's context.

1. Prooduct (includes Service): A product is seen as an item that satisfies what a consumer demands. It is a tangible good or an intangible service. The Product should fit the task consumers want it for, it should work and it should be what the consumers are expecting to get. For financial advisors, mutual funds can be seen as an example of product while financial planning can be an example of service.

The marketeers have to answer questions like...

• What does my customer want from the Product?

• What is the ideal product mix /basket for my target customer?

• What usefulness, utility, convenience will my product offer?

• What is the life-cycle of my product?

• How do I ensure quality, proper packaging of my product?

• What promises, warranties can I give for my products?

2. Price: The price is what a customer pays for the Product. The price is very important as it determines a business's profit and hence, survival and growth. Adjusting the price in virtually all businesses has a profound impact on the marketing strategy. For us, the price should represent a good value for money proposition for the customers. Customers should see & appreciate the advantages /value of being associated with a financial advisor after knowing the costs that he/she is directly or indirectly paying.

As financial distributors we cannot determine the price hence, we need to design our offering in terms of value that we propose to deliver. While setting the value proposition for a market defined price, we should ask ourselves...

• What is the perceived price by the customer for our Product?

• What is the perceived value of our Product?

• What does it cost you to deliver Product to the customer?

• What should be the right Product mix ideal for us and our customers?

• What is the break-even business need in our Product mix for us to keep going?

• How do we disclose price and communicate our value to the customer?

3. Promotion: An important component of marketing, Promotion can help create & boost your sales and brand recognition. It will comprise of all methods of communication that you may use to provide information to different parties about your Product mix. It consists of varies elements like your sales team, advertising & marketing activities, sales promotion strategies, etc.

In the digital age, Promotion have evolved rapidly and today it consists of both physical and digital promotion activities, customer interactions, social media engagement, etc. Financial advisors need to decide upon ...

• Having a brand recognition / identity to be kept consistent in all literature /promotions

• Having a proper website with proper content, tools & resources for target audience

• Designing & executing the right mix of different communication channels & modes (mobile, emails, SMS, web communications)

• Backing a digital presence backed with quality communications /interactions

• Physical promotion strategy to reach target audience

4. Place: Before the popularity & reach of internet, place carried huge significance and it answered the question where will I deliver my Product? Today in the era of e-commerce & digital transactions, customers need not go anywhere to transact. The challenge now is to find where customers are staying online and where they find shopping easiest and it can still be a mix of both digital and physical place.

Traditional financial advisors now have to evolve and evolve as the Place in the marketing mix is evolving today. They have to move from physical presence limited to a particular geography and move to the digital space where customers are increasingly shifting. The questions now are...

• Which mode /channels are suitable for my Products?

• What is my distribution strategy?

• What is my positioning strategy for my distribution?

The Extended Marketing Mix

Slowly as businesses and market places evolved, the 4 P's was increasingly felt to be insufficient to capture the entire essence of marketing mix. This led to the addition of 3 new P's in 1981 by Booms & Bitner. In today's internet driven, customer centric world, the Extended Marketing Mix is more suitable for services industry. This change in marketing approach is more customised and more holistic for customers. Let us now learn more of what these new 3 P's stand for...

5. People: People refers to customers, employees, management and everyone involved in the business. It is important for everyone to understand about the brand, the product that businesses propose to offer at a price. Employees who execute the service and the manner and skill in which they do so is at the heart of it. For any business today, having the right set of people around you is essential because they are as much a part of your business offering as the Products you are offering.

As a financial advisor, you may want to ask yourself the following questions here...

• As management, what vision, values, culture & goals do I set for my business?

• Do you have enough customers in your target audience /market?

• With whom do I associate /tie-up so that I add value to my business?

• How do I train & motivate employees to deliver advice/service?

• How do I shape customer service orientation for my team?

6. Process: Process comprises of the processes and systems within the organisation that impacts the delivery or execution it's services. The processes where customers are interacting with you are critical and you want them to be convenient, easy, simple, productive and efficient for the customer as well as the business. If you think, processes are what the customer are actually paying for in a service industry.

There can be a set of processes defined for every aspect of the business like for eg.- transactions, customer advisory, customer service, marketing & sales, employee management, administration, accounting and so on. As a financial advisor, we may need to decide...

• What are the key processes that I need to set in place to fulfill customer expectations?

• What processes do I need to improve to make my business lean, competitive, profitable and superior to competition?

• Are my processes cost effective, productive and value-adding for my business?

• Are customers happy /satisfied with my processes?

7. Physical evidence: The evidence is what shows that a service was performed or a product delivered. It is a challenge to ensure that your customers know and remember the delivery in a service industry. While it may not appear to be critical, but evidence is key for financial advisors where advice and services rendered are not tangible. It is also important for you to record and measure your and your team's performance in terms of delivery of advice/services. Further, evolving compliance expectations from advisors also has increased importance of evidence for all advice given and customer interactions /communications taking place.

Financial advisors need to can have evidences recorded /stored for customer enrolment, engagement, risk assessment, customer needs, financial /investment plans, recommendations for products, etc. Financial advisors would need to assure that...

• Requisite facilities & infrastructure is in place for service delivery

• Records & customer confirmations /communications are adequately made for every transaction /interaction

Conclusion:

The principles of Marketing Mix or the 7 P's can be used at a conceptual level and also at an execution level depending on your needs. These principles are as valid for an independent, one-man driven businesses as it may be valid for large institutions. The idea here is to think and question our businesses on these principles to get define and arrive at a clear picture for our customer and our business. This clarification will assume increasingly greater significance if you dream of making your business big....

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Financial advisors have to be master salesman; sales is where they get their bread and butter from. Though there isn't any set format for developing sales skills, or some theory which can be mugged to be good at sales; these skills come from experience and passion. There are people who have some specific skills or manner of handling clients, which make them better than their counterparts. There are some people who are doing really well in their business, there is a unique style of each such salesman. We have to keep our eyes open, even a Lehenga seller in Chandni Chowk can teach you a skill or two to be better in your task.

This is about a Wedding Lehenga shopping story of Richa.

Richa got engaged in June 2015, and since then the wedding Lehenga was the next big thing for her. The wedding was in October the same year, and she used to spare at least an hour of her day researching on the designs, the lehenga vendors, or the bollywood movies which had a wedding scene. So, after a thorough research she decided to go to Chandni Chowk and listed down six shops which she had to visit.

She along with her friend Ashima, went to Chandni Chowk to get Richa's Wedding Lehenga. It was 11 in the morning and as soon as they got down from the metro station, it felt as if it was a warplace, and the enemy was firing from all directions and she had to reach her target, making way, escaping from the bullets – the 'sales agents'.

Thanks to her research, she did not pay any heed to them, and managed to take a sidestep and reached her first target store 'Kamal Bhai'. It was a fancy shop in a dingy lane. So, as they entered the shop, there were about 10-15 customers, the owner of the shop came to them and greeted them very warmly. His first question: “have you been to the other shops yet?” Richa: “No, we have just entered the market” Kamal Bhai: “So, my suggestion is that you first go and explore other shops, because I know that you will buy your lehenga from me only. I'll book an appointment for you at 4:30 in the evening. Please don't be late” Richa: “Yes, please book a slot, we'll be there”and after this he offered them a cup of tea, even though they were going ahead in their search to other shops and might not return to him.

They went to four more stores and she liked some lehengas. She was in her second last store of the day, and she really liked one piece, for which the storekeeper quoted Rs 55,000 and said he could bargain a bit. It was 4:20 PM and Kamal Bhai's deadline was ticking in her head, and she did not want to buy this one without having a glimpse at Kamal Bhai's collection. So, she hurried up and reached Kamal Bhai in time.

They were tired and hungry, Kamal Bhai welcomed them very warmly, and they had a grand white couch to sit. He said, “Tusi Chandni Chowk aaye ho, Matar kulche ni try keete, Lehenga te baad che vi ho jayega, tusi pehla chain naal baith k khao” - “You have come to chandni Chowk and din't try matar kulche, Lehenga can be done later, you first relax and eat”, to which they readily agreed. He ordered matar kulchas for them and started asking for their budget and if they have anything specific in mind or if they have a whatsapp image, he could replicate anything. So they told him what their preferences were, and after finishing the meal, he started 'narrating' the lehengas. One by one, Lehenga's kept coming in and he had a big shot designer's name for each piece. His salesman also conveyed to them in a hush tone, “Kamal Bhai has the same artisans working for him as Manish Malhotra's”. She shortlisted three lehengas, one was for 89k, one for 79k and one for 65k. So, she told him about the 55k lehenga that she liked in the other store. He took a piece of paper and the prices of all those lehenga's came under 60k. She was elated and picked the most beautiful one for 56k. She paid him the money, and he whatsapped her a picture of her Lehenga, since you are not allowed to take pictures in these stores until to buy it, took the receipt, had another cup of tea at his store and left with a big smile and a sense of accomplishment.

Back on her way, she pondered why did she chose Kamal Bhai's Lehenga and not the one from the other store, he could have brought down the price further and that lehenga was equally beautiful. And there were so many other beautiful lehenga's in the market. The answer was simple: it was his sales skills that had cast a spell on her. We can juice out certain important points from this anecdote for our financial advisors:

• Like her Lehenga, your client's goals are very important for them. Don't ever take the goals lightly, the client will trust you only if you seem sincere towards his requirements and the products that you offer are fit for meeting his goals.
• Social Media: The secret to make clients look for you and not vice versa is making yourself known on the internet, try to get yourself reviewed. Be active on social media, have your own website.
• Don't harass your prospective customers by forcing them to come to you, like the Chandni Chowk agents. In order to create your worth in the eyes of the client, you don't have to pull the customer into your office by his hand, you just have to show him the gate and he will follow.
• Be confident like Kamal Bhai, if the client wants good service and products , he will come back to you, but make sure you have finished your homework before this. Make sure that you are good when it comes to service and the products you suggest are best suited for him.
• It was the attidude that Kamal Bhai had, that really worked. You have to be warm, polite and assertive at the same time. An advisor cannot be aggressive in his tone and wearing a frown on his face. He has to be calm yet fierce, so that the client is engrossed in your warmth and impressed by your assertiveness.
• “The way to a man's heart is through is stomach” - Kamal Bhai applies this principle to win the hearts of his clients. Hospitality matters in advisory business too, offering a cup of tea or even a small chocolate counts. Being courteous towards the client, or these small gestures will not cost much, but will significantly add to the pleasure for your client.
• Word of mouth works the most in advisory business. Richa was impressed when Kamal Bhai's salesman told her that he and Manish Malhotra share the same artisans. If someone else speaks for you, it is the best that can happen to you and your business.
• Value your time, decide a time to meet, which is suitable for both, you and your client. And make sure that you convey to him that you are taking out time for him from your busy schedule. As it is commonly witnessed that the clients do not turn up at the time of the meeting and at times don't even inform before. This casual attitude can be eliminated by stressing on the fact that though customer is the king, yet your time is precious too.

A lead converted into a sale and a satisfied client is what we all look forward to. The aim of this story is working towards our ultimate objective.

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High Net Worth Individual (HNI) is one segment which every financial advisor is looking forward to work with, because of their huge portfolios.

With net assets of US $ 5.2 trillion, India now ranks 7th in the world HNI wealth index. India is home to 2.36 lakh high net worth individuals (HNIs) and their population is expected to grow by 135% to reach 5.54 lakh by 2025. (Source: Cafemutual)

The opportunity is lucrative and you must be tempted to manage the assets of HNIs. However, managing HNIs is entirely different from managing a retail customer. An HNI is not looking to invest for building a house, or buying a car, or for his children's education. He has already fulfilled these goals from his existing means. He's looking for something extra, and your advisory strategies should be customized to meet his specific requirements.

There are certain pointers which are specific to HNIs, their behavior towards investments, their goals, strategies, manner of dealing with people, etc. An advisor shall keep these things in mind while conducting business with an HNI client.

HNIs have built wealth through their businesses or jobs, they possess substantial market knowledge and skills and they try to apply the same to investment management. An HNI believes that his success in his professional life can be carried forward to his investments as well. It becomes difficult for the advisor to explain to an HNI that his investments are different from his business, and that the advisor is an expert in the field, so let him apply his expertise to the client's portfolio and multiply his wealth.

The first question that you should ask an HNI is "Do you have a Will?" If the answer is not in the affirmative, you must advise him and take him through the Will writing process. Even the big shots of India Inc. who did not leave a Will behind, their families have faced turbulence later. Take the example of Dhirubai Ambani's family after his death, there was unrest with respect to property distribution and finally Ambani's wife had to step in to sort things out.

HNIs are usually influenced a lot by their bank relationship managers. They trust their banks and buy some investment products which are a complete misfit for their portfolios.

HNIs generally have an inclination towards real estate. A lot is already blocked in real estate and they want to park more money in illiquid assets. Irrespective of the fact that their portfolio needs to be diversified and other investments have to be included and irrespective of the market conditions, they tend to religiously follow the real estate path only.

HNIs are business minded and want the best deal out of everything. They always try to extract a lower than the standard expense ratio in every transaction. And the advisor considering a huge investment, tends to fall into the bargaining trap of his client and ends up committing to terms which are not beneficial for him. As an advisor you should refrain from falling for it and focus on value addition you bring to the table. if you spend more time bargaining, you will lose the deal the moment any other advisor offers extra 5 paise as passback. Focus on offering solutions to the problems of the investor. doing an objective analysis of clients existing investments and giving right advice on it will help you strengthen your relationship in the long term.

Since an HNI has built a decent wealth base, so ideally he should work towards preservation of this wealth. He should secure his wealth with investment options which can protect his money and offer returns higher than the inflation rate. But to the contrary he aims towards generating more wealth and is ready to risk his principal as well.

HNIs rely heavily on their advisors. There is lack of due diligence on their part, they seldom have the time to go through financial blogs or magazines and discuss their viewpoints with the advisor. And if anything goes wrong, the responsibility falls on the advisor's shoulder.

HNIs are generally too busy with their careers and often are not able to devote enough time to their investment planning. The advisor needs client's views on devising a plan, and for periodic amendments in his portfolio. But the client is not able to give time to his advisor, which leads to wrong or delayed investment decisions.

According to a report published by Spectrum Group "more than one-quarter of millionaire and one-third of UHNW (Utra High Net Worth) respondents say that they want a response to a phone call in two hours or less." They want their advisors to respond to their emails or phone calls quickly. They expect you to at least acknowledge to their query if the solution is expected to take time. So, the advisors are expected to maintain an efficient and quick communication system while dealing HNI clients.

Senior citizens among HNIs is another interesting category; they are probably in their late 60s or early 70s and have enough wealth to sustain their lifestyle for the rest of their lives. Their goal is to leave a huge estate behind for their children and for their grandchildren. So the approach to investing would be completely different from a normal retail investor. Investing in equities in order to generate significant returns over a 15-25 years time horizon would be an ideal investment plan. So, there is significant business opportunity here, you have to identify their specific goals and devise an offbeat investment plan for them.

These specific attributes relating to HNIs would help you transact better with HNIs. You should further keep upgrading your knowledge and be technically sound while catering to HNIs. Focus on your branding. Little things like logo, good quality stationary, websites, etc. matter. Try to have a fixed frequency of reviews, so both of you are on the same page always. Also communicate the crucial points effectively, like a contract for advise with fees charged.

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