When I give a presentation, one of the first things I ask the audience is, “Who buys what you’re selling?” Inevitably, several folks will answer, “Everybody needs what I’m selling.”
Sorry gang. Wrong answer.
The thought of specializing within a target group, or “niche,” is a scary idea for many service professionals. “I don’t want to limit myself,” “I’m afraid I won’t get enough work,” are common concerns.
The truth is, trying to be all things to all people usually results in one becoming nothing to everybody. It quickly erodes into a form of “me too” marketing, where everybody is saying the same things. From the prospect’s point of view, nothing stands out. There’s no differentiation. There’s nothing compelling.
Beyond this, and perhaps more important, by finding a good niche, marketing becomes a whole lot easier … and less costly. Trying to market and sell to everybody means spending a hefty sum to reach all those ears and eyes. Most of them will never buy from you. For example, typical response rates for direct mail average between .5% – 2%, depending on the product or service offering and call to action. Logic dictates that if you want to land more sales, it means increasing the number of mailings. That means more printing, mailing set up and postage costs. Into cold calling? The same applies, albeit time rather than money. The research says that for the average service professional, you’ll need to make 100 calls to land five invitations to present. Those will result in one to two sales. Want more sales? Spend more time on the phone and making presentations.
It’s just plain ‘ole inefficient.
That’s why creating a niche for your business is so important. The main idea here is to find a market segment where you can become the expert … the big fish in a small, but profitable pond. You learn the common challenges, know the solutions and become intimate with the audience and the industry. Over time, and with some effort, you might even get to know the industry better than your prospects. When that happens, you become pretty valuable.
So, what is a niche? The dictionary defines it as :
“A special place within the scheme of things. It sometimes denotes the function or position of a thing within a structure.”
That works. But, for our purposes, let’s define a niche as a market segment that’s an inch wide and a mile deep. It’s that part of the market that’s either under-served, has an unmet need, or is an area (type of service, specific expertise, etc.) that solves a particular and common problem for your prospects and clients.
A niche, or area of specialization, can be by industry, type of service or even geography. For instance, some service professionals might target healthcare, while others may target the legal industry. Some might whittle it down even further by targeting dentists or cardiologists. Maybe going for attorneys practicing in the area of environmental law is a just right fit. In the case of designers, some focus on developing identities, while others specialize in Web design or trade show displays. Targeting by geography is a bit more wonky in these days of the Internet, Skype and overnight delivery. But, in smaller markets, an indie pro may be able to make their mark by positioning themselves as their town or county’s service provider of choice by knowing the ins and outs of a geographic arena.
Where to begin?
So, where do you begin to carve out your share of the market? It’s a good idea to begin by looking at your existing and past client roster. Is there a trend? Do you find your projects tend to be in a particular industry? Often, before we establish a niche, we don’t consciously target certain industries or project types, but in doing a review we find, that over time, we’ve been doing a lot of work in one industry or another or this project type or that. Clients and prospects talk and give referrals to their colleagues and associates. We may also find we enjoy a certain type of gig and have unconsciously gravitated toward them.
If you’re just hanging out your shingle, odds are you don’t have a lot of client history to drawn on. If that’s the case, start reading newspapers and various business publications. Look at what trends are emerging. For example, people are always getting sick and the Boomers are aging. So, carving out a niche within the healthcare industry might make sense for you.
After looking over your history and current trends, give some thought to what you’re good at doing and what you enjoy doing. That latter item is pretty important. You might be great at doing a certain thing, but hate doing it. Sure, you can promote yourself and land a bunch of work … and abhor going to work everyday. We spend an awful lot of time working. Try to find something you enjoy.
Over the course of this series, here’s what I’ll address:
- Identifying and qualifying a niche or two
- Developing expertise in an industry, technique or project type
- Promoting yourself within the niche
- Leveraging your expert status to keep the ball rolling
I look forward to your thoughts and comments about the topic, what you’ve done, what worked and what didn’t work.