I’m sure you’ve heard it before – the arguments for defining a narrow niche for your business. And yet, you don’t quite believe it. It seems to go against common sense. Why narrow your potential market? Don’t you want to attract as many customers as possible?
Of course you want to attract a lot of customers. But I have another question for you. How hard do you want to work for your customers? Here are three reasons why marketing to a narrow niche makes it much easier to attract more customers and grow your business.
1. You Become an Expert
When you choose a narrow niche, you can focus on learning as much as you can about addressing the wants and needs of that particular niche, and how to best serve them. You are not constantly reinventing the wheel for each new customer. You become an expert in your area, and experts attract more customers, and command more money. When someone in your niche needs your service or product, you will be the one that people think of and refer to.
For example, let’s say a business coach is looking for help developing her website. There are a lot of choices out there, and many website developers will create websites for any industry or any size business. However, if someone tells her they know a website developer who is an expert in developing websites for business coaches, and that this developer understands the unique needs of website marketing for business coaches, then she is more likely to choose them. Why? Because most people would rather work with an expert than a generalist. They believe that the expert better understands what they need and will have expertise not only in their own industry, but in their niche’s industry as well.
2. You Eliminate the Competition
In the book “The Pumpkin Plan, A Simple Strategy to Grow A Remarkable Business in Any Field,” Entrepreneur and Author Mike Michalowicz tells how narrowing the niche for his computer installation and repair business eliminated his competition. Mike noticed that his most profitable clients were hedge funds. So he changed his label from “Computer Repair Company” to “Hedge Fund Technology Specialists.” He narrowed his niche to focus on hedge fund companies only, and suddenly, where his company previously had hundreds of “computer guys” competing with them in their area, they were now competing with only two other “Hedge Fund Technology Specialists” in the entire country.
Mike did his homework and learned how to serve this client better than anyone else. Their target market, hedge funds, stopped thinking of them as typical “computer guys,” and started thinking of them as technology specialists for the hedge fund industry. There was no comparison. Mike’s business implemented a strategy to attract other hedge funds, and their business completely took off.
The lesson is, when you serve a narrow niche, your products and services can be tailored to their specific needs, which gives you a huge competitive edge over your generalist competition. If your customers see you as the same as the competition, you end up competing on price. If you are different, then they will not compare you to other companies in your industry. If you understand exactly what their specific problems and challenges are, and you present solutions that are unique to that market, then you can name your price.
3. You Can Speak Their Language
The more you know about your customer, the easier it is to speak to them in a language that motivates them to buy your product or service. If you have a narrow market, you can paint a very specific picture for yourself of who they are. You can interview them, study them, and gain an understanding of what makes them tick. You can build and talk about your business in a way that makes your ideal client feel like your product or service was made just for them. If you understand what motivates this group to buy, and how they make buying decisions, you can speak to that motivation and decision making process.
When I hear a business owner or sales person say something like, “we do everything from A to Z” I immediately tune out. What they have to say is so general, that I never feel like they’re speaking to me or my needs. While many business owners are afraid to be too narrow in their marketing for fear of excluding a potential customer, the truth is, if their language is too general, they won’t attract anyone!
Have you ever visited a website, read an article, seen an advertisement, or heard someone speak on a topic and thought “wow, they are speaking directly to me, it’s like they can read my mind?” You feel like they understand you, your problems, challenges and dreams. This is exactly how you want your target audience to feel when they have contact with you. The way to accomplish this is to choose a niche that is narrow enough to have problems, challenges and dreams in common. Then you learn everything you can about them. Speak to them in their language about solving their problems and fulfilling their dreams, and they will want to do business with you.
Now that you are over your niche phobia, here’s my advice about finding your niche: Figure out who your best, most profitable clients are, and of those clients, who you love working with, discover what they have in common, and create your winning niche strategy from there.