This is a common marketing question from my clients. And there's a lot of noise about niching asap.
Yes, there are obvious benefits – it can make defining your marketing message easier, your marketing activity cheaper (no wasting budget on the wrong audience!) and it keeps you laser-focused when it comes to business development.
But it’s not always the best option.
Some businesses thrive within a mass market – just look at brands like McDonalds or Nivea. And some businesses have more than one niche, each one being profitable and sustainable e.g., Virgin or Next.
It’s not black and white - here are a few thoughts on the subject to aid your decision making!
Photo source: Pexels, June 2022.
What to consider before deciding on your niche market
How long has your business been running?
In the early days of business, you’re still working out who your ideal clients are. It can take time to spot patterns and similarities between your clients. You may start by taking on a broad range of clients and the opportunity to niche may not be viable in the early days.
Do you know who your ideal client is?
How much work have you really done on your ideal client – do you know them inside out, their pain points, their problems, what solutions you can provide? Unless you’ve done some serious research on your ideal client, you could be taking a gamble with your niche. And if you don’t know, then it’s time to kickstart that research!
Do you like working with your ideal client?
There will be a point when you’ve discovered your ideal client and start to niche but then the reality of working with that one niche isn’t quite what you expected! Too many similarities? Too much repetition? Variety is the spice of life and you may decide niching doesn’t give you the variety, scope, challenge or creativity you need.
Are there any external factors that may impact?
Many business owners were pushed into a new niche due to Covid - there was an unexpected need/want for their product or service that they’d been unaware of e.g., gin and whisky distilleries producing hand sanitiser or bricks and mortar businesses developing their ecommerce offering. Covid was largely unpredicted and extreme but is there anything else out with your control that may lead (or push you into) a new niche e.g., climate change, political moves or technology advances?
Do you offer a mass market product or service?
Consider tangible products like sweets or a face cream – things that initially may appeal to everyone. Service providers can be mass market too e.g., funeral directors or mortgage brokers. Unless you’ve a particular desire to specialise or target a specific part of the market, a mass market offering may suit your business goals.
What’s your unique selling point (USP)?
Converse to the last point, is there something about your product that would make it appeal to a particular market e.g., the ingredients, the taste, the packaging? As a service provider, could you specialise e.g., pet funerals or a premium property mortgage broker? If you’ve an obvious USP (and it resonates with your ideal client) then you may want to consider a niche market.
How to find your niche market
In marketing terms, a ‘niche’ is often referred to as a ‘segment’ - a manageable, specific group within a wider market.
For example, the market may be ‘non-alcoholic drinks’ but the segment may be ‘alcohol free wine’ or ‘alcohol free beer’. You could also segment further by country of origin or the insights to your ideal customers.
Finding your target segment (niche) is part of a marketing process – Segmentation, Targeting, Positioning (STP).
You may be able to define several possible segments. I’d recommend streamlining this to between 1-3 segments. Considering the following may help:
Size – is the segment big enough to be commercial? And meet your overall business goals?
Longevity – will the segment be around over the long-term?
Stability – is the segment stable and consistent? Unlikely to be rocked by any external factors?
Growth potential – will the segment continue to expand and grow, offering new clients or customers in the future?
Answering some of these questions should help you discover your target segment (niche). By researching further at this stage you’ll get a clear idea of your niche and gain a deeper understanding of your ideal customer, setting you up with strong foundations for your marketing.
The last stage in the process is developing your positioning – where does your business sit within this niche? Start to consider some of the marketing mix – product, price, place and promotion (the 4Ps). If service based, look at the processes, people and physical (ambience) of your offering too. Where do your competitors sit within the niche? Can you find a unique position for your business?
With a clear idea of your niche market, you can develop a marketing approach that resonates with and engages this group specifically. And ensures your marketing is targeted, specific, relevant and effective at getting results for your business.
If you’re unsure about:
whether or not to niche
your ideal customer or niche market
how to develop a bespoke marketing approach for your chosen niche
then I can help.
Book an initial call with me and we can work out the best marketing approach for you and your business.