One of my most repeated pieces of business advice is to niche your business as much as humanly possible. A guy who wants to start a “fitness” business teaching people how to “lose weight” or “get ripped” is going to get slaughtered. But, a guy who instead starts a business focusing only on how overweight moms over 40 can lose weight, or how Asian men in their twenties can gain muscle mass, will probably do very well.
The guy who niches:
- Will make more money
- Can charge higher prices
- Can find customers and prospects much more easily
- Will experience far less competition (if any!)
- Will have more repeat sales
- Will get more referrals
- Will have less customer complaints and customer service overhead
In other words, if you don’t niche, you’re making a huge mistake.
I get a lot of questions about exactly what a niche is and is not. Below are a few correct and incorrect examples of business niches.
“Motivated men who want to make their lives better and increase their incomes.”
Not a niche. It’s not clear enough or demographic enough. If instead you said, “Motivated salespeople in the auto industry who want to increase their incomes,” now that’s a niche.
“Young women, under the age of 25, who want to lose weight.”
That’s a niche. In my opinion, it’s not quite niched enough, but it qualifies as a niche. I would personally add one more aspect or qualifier to those younger women to further niche it. In other words, what kind of woman under age 25?
“Small computer consulting companies (under 500 employees) in the USA who have been in business for longer than four years.”
That’s a niche. That’s exactly the niche I work with in my I.T. marketing company. That’s the only type of company I work with in that business, and I literally won’t work with anyone else. I’m highly niched, which is why that business is so profitable.
“Companies with severe quality control problems.”
Not a niche. You’re describing your offering, not a niche. You’re saying you fix quality control problems, and that’s great. You’ve niched your service, but you haven’t niched your market. If you instead said something like, “Companies in the furniture business who have severe quality control problems,” now that’s a niche, and you’re going to make lots of money.
That’s a key point. Sometimes people think if they just niche their offering (i.e. their product or service) that automatically niches their market. Sometimes this is true, but usually it isn’t. You usually need to niche both.
The more you niche, the better. You can even “microniche” by niching within a niche; very smart.
And no, don’t worry about the target market being too small if you niche. Go back up and re-read the list of benefits you receive by niching. All of these more than make up for the fact that the total market size is smaller. I can’t think of a viable niche where you couldn’t make a very healthy six-figure Alpha 2.0 income.
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In this example you will focus your marketing efforts on small computer consulting companies in the US who have been in business for longer than 4 years(therefore not startups).
This cuts a lot of marketing costs and time. My question is why they will prefer you in the first place and not a business that’s already strong in the market? I mean in their mind you are no different.
Or is it simply about niched marketing therefore you go to the target first/faster?
As an example let’s say there are just 10 companies that match your criteria. And they are already doing business with other companies that serve every client that comes their way. Why they will toss them away and get your business?
Price might not be better than the other companies. Service might not be better than the other companies.
Your niching in the dating part is excellent but it serves a market that no one else can serve. In the above scenario though most businesses can serve that easily. There is no difference to them whether it is a medium size business or a small one, a new business or an established one.
I could be wrong but b2c like dating,weightloss ,individual decision maker purchases like ebooks,coaching,courses could be good for niche
B2B marketing services could be good with niche too
B2B product buyers might not care whos seller as not individual decision maker ?
You own an IT company. A big marketer comes soliciting his business who doesn’t specialize at all. Another smaller marketer comes soliciting his business who only works with IT companies just like yours and can show a track record of doing so.
Who do you pick?
I know who I’d pick.
I don’t go after companies who are already working with a marketing company, so I don’t have that problem. I go after companies who have never worked with a marketing company before, which is the vast majority of small IT companies. (IT guys rarely market and hate marketing.)
“Dating” and “weight loss” are not nearly niched enough. But there are good niches within those industries.
It depends on the structure of the prospect company and what’s being sold.
Ok forgot to mention the part of Small computer consulting companies. I can see the logic if the big marketer doesn’t specialize at least in the Small computer consulting companies and the within the USA part. But if he is specialized in these two parts of the sentence, the other two parts don’t make much difference to the customer. He is after all a big marketer with a branded name in this field. In my mind they will still pick him(barring huge difference in pricing).
There you go.
I don’t understand.
So how would someone go from general, professional-level knowledge/expertise of a subject to niche-level, professional-level knowledge/expertise if they were starting a new or ramping up an existing business? Thanks!
You wouldn’t and don’t need to. Just take your current, general knowledge (like “time management” or “weight loss”) and apply it to a niched market (like “time management for attorneys” or “weight loss for busy single moms”).
In your case what makes the difference is the “IT consulting companies within the USA” and since you know they are not covered you take advantage of it. Whether they are small or 4 year olds is irrelevant in terms of competition, isn’t it? It just makes your marketing efforts easier and cheaper.
In any case you pretty much answered with the ” I go after companies who have never worked with a marketing company before, which is the vast majority of small IT companies.” I was assuming there was a strong competition already in the IT field, particularly in the US.
In terms of competition, yes.
Oh there is, but not for marketing services.
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