In a crowded market place, finding a niche is crucial

Upside down

When we launch a business, start a new service or run a campaign, it’s natural to try to appeal to the widest possible audience. We need returns fast, so it’s understandable that we don’t want to circumscribe the target market by excluding prospects. 

The problem is that those very same prospects are doing the same thing in reverse.

They’re looking at your company, or product, or service, and making a snap decision about whether they want to do business with you. If you send out the signals that you’re a generalist, they might just cross you off the list. 

Show them that you understand exactly who the are, and that you specialise in helping people like them, and they’ll be making a beeline for you.

It all comes back to the simple principle that people do business with people they like. Or with companies they like, based on the targeted messages they’re sending out. 

One-to-one connections

It’s natural to try to be all things to all people, because otherwise, you risk losing out on a big chunk of business.

In the old days, perhaps that made sense. You probably didn’t know how to find a niche audience, or weren’t sure if they were numerous enough to justify focusing on them. 

But now that everything is connected, things are different. 

A friend of mine is into tarot cards, and does a daily reading on Facebook. He’s assembling a virtual community, and has followers all over the world. Much to my surprise, tarot is big business, and there are tarot specialists with huge audiences on Facebook and YouTube. 

A therapist friend of mine is limited to a geographical area, but knows from interaction with her market that the sector she’s targeting is a growing one. And if she makes a name for herself in that space, she becomes the go-to person for that issue.

She’s still a little concerned about the need for physical proximity, but maybe she shouldn’t be. Because when I was recently in South Africa, I met somebody who does consultations by Skype with people from all over the world.

She’s made a niche in alternative medicine, and though Cape Town isn’t short of prospects, her reputation is such among visitors and expats that her name has become known across the globe.

The straight and narrow

The thing is, though, that being in a niche can be scary. Because if you make a name for yourself as a specialist in one area, you necessarily exclude yourself from other areas. You become associated with your speciality, to the point that people don’t associate you with anything else.

So if you’re ‘the content-management company’ or the ‘the PHP developer’ or ‘the reinsurance firm’ or ‘the interim recruitment agency’ then you’ve cut yourself off from a sizeable section of the market.

And that’s actually a good thing, as you don’t have to worry about appealing to everybody. Because that’s an impossibility.

So how do you decide what your niche is, and how do you go about targeting it? 

As with anything, planning is key, and it starts with asking the right questions:

  • Is there a critical mass of clients in that niche?
  • How can you reach them, either physically or virtually?
  • What competition is there, and can you differentiate yourself? 
  • If the answer is not really (and sometimes, you can’t) is the market big enough to sustain another player – you? 
  • Where does passion (either individual or corporate) lie?
  • If you could have only one type of client, who would that be? 
  • What specialist skills do you have to address the target market?
  • If you don’t have them, how easily can you acquire them?

Bright young things

Done right, niche marketing can bring big gains. 

When Voxi, the youth network from Vodafone, was originally launched to much fanfare in London in 2017, it was targeted at ages 25 and under. Their plan was to reach an audience of more than 10 million 16- to 25-year-olds. With the promise of ‘endless’ everything – calls, text, social media – people could click, stream, share and chat to their hearts’ content. 

They’ve now extended the niche to 29, but once you hit 30, you’re out.

The rates beat anything you can get on a regular Vodafone contract – or anywhere else, for that matter. So they could get more revenue per subscriber if they want to, but they’re choosing not to – for the moment. You can see why, though: as soon as users hit their third decade, with more disposable income, they’re going to choose which network?

Vodafone, of course.

So what they’re doing is playing a very clever long game, and making people loyal through the back door.

Whether it’s just a teeny bit discriminatory or not against oldies like me to offer better rates based on age is entirely another question. I always think a good test is to substitute another criterion – take your pick – and see whether it’s still sounds quite so fair and equal.

The need for a niche

So have you found your niche?

Remember that you’re not necessarily limited to one. Maybe you have products or services that appeal to distinct groups, and you speak to those people through targeted marketing and channels. 

The downside of that is that you’ve split your marketing effort and resources. Since those are often exponential – twice the effort/budget often results in more than twice the return – you might be better narrowing your focus and targeting a single niche.

Either way, it’s always best to know exactly who you’re aiming at, whether it’s therapy or tarot, mobile data or alternative medicine.