If your business is stuck, overcomplicated, and not making enough money then your problem might be a lack of focus. As the old saying goes, ‘If you’re everything to everyone then you’re nothing to anyone’. Marketing to a niche market can not only get your business out of a rut, but it can help you grow at tremendous speeds. To market to a niche though you have to have one! In this post, I’ll walk you through the exact steps we at Strategy took to pick our own niche. Let’s get started.
Step 1: Researching Target Customer Options
The first step to finding your niche market is looking at the available options. For existing businesses, there are a few questions you can ask to make this easy. Make a list of answers to each of these questions:
- What clients have you produced the best results for?
- What problems are you best equipped to solve?
- What clients do you enjoy serving the most?
As you look at past and current clients a few clear examples of each should come forward. You want to find the intersection between joy and effectiveness. Ideally, some clients will be on multiple lists. Take those clients and determine what industry they are in. This will be your starting list of niche market options.
To narrow down your options, you’ll need to do some research. These questions are critical for proving viability:
- Does the niche have a viable market? (An industry of 2 businesses is probably not big enough)
- What does competition in this niche look like? Can you stand out from competitors?
- Are there gaps in your service offering that businesses in this niche market need? (Examples would be technology, compliances, software tools, features, etc.)
- Do the businesses in this niche match our brand, identity, and values?
You may need to purchase industry datasets or trade publications to find the right information. The more niche your target customer, the more difficult to find data. It’s important to take your time on this step. Imagine putting all of your business’ focus on a specific type of client only to find out there isn’t a viable market…. Ouch!
Here’s a tip for finding a killer target customer match. There’s a formula from Marty Neumeier about finding your business’ “onlyness”. That means finding the differentiator that will let you rule a niche market. Here it is: “Our company is the only ____ that ____ “. The first blank is your industry (marketing agency, hygiene products manufacturer, construction firm, etc.) and the second blank is your differentiator. If you can answer this in a truly unique way with no “and”s or commas then you have a strong start. All you need to do is find the niche market that will love your onlyness and you’re set.
Step 2: Narrowing Down Your Potential Niche Markets
If you’re like us, and most businesses, then you probably weren’t able to narrow it down to just one target market. When we were working on this we found five viable options. So, you just serve five markets then, right?
NO! If you need a refresher on the danger of serving multiple markets, check out our last article. Business owners hate narrowing down target customers because it feels like leaving dollars on the table. But remember, having a narrow focus allows you to do your best work all the time. It is worth it to narrow the options and find the perfect fit.
The key steps to doing this are:
- Define the benefits of serving each niche market
- Outline the challenges of serving each niche
- Rough out your unique selling proposition for each target customer
- Determine alignment of serving each niche market to strategic business objectives
Doing this may reveal clear winners and losers. If not, hopefully you at least narrow the list down some at this stage. You may need to do additional research and that’s fine. Do not try to rush finding a niche market. Making a bad choice can be worse than making no choice at all.
Once you have 2-4 niche markets remaining in contention, it is time to make your final selection.
Step 3: Selecting Your Niche Market
The first thing to consider is your team. While you probably have done the research and narrowing on your own or with a leadership group, don’t forget your employees! They will be the ones most effected by finding a niche market. Whatever your target customer, your employees will be the ones out there working with them. So let your employees know what is going on. Get their buy-in on the need for selecting a target customer and let them voice their thoughts about the remaining niche options. The front line team will often have good ideas, questions, and concerns which leadership may not have considered. It can be helpful to talk to the company in smaller groups or at the department level so people feel comfortable getting involved.
Make sure to remind your team, and yourself, that this isn’t a switch you will flip tomorrow. You aren’t going to fire all your non-target customer clients and you aren’t going to immediately get new niche customers. There will be much time spent developing new marketing and sales strategies, working with production teams, and adjusting the company to fit the new plan. If you don’t say this, many employees will panic and think their lives are changing immediately. You probably need to say this several times to each group and then send reminders over text or direct message.
Once you have all the company’s feedback and buy-in, you’re ready! Select the best target customer from your remaining options. Congratulations! You are officially targeting a market.
Wait, Where’s the 10X on My Business?
Bing-bang-boom, you found your niche and now your business is 10x’d, right? Despite how big this decision feels, very little will change immediately. But that doesn’t mean the work was useless. It just means you’re ready for the next step: marketing to your niche market. Only by going after your new target customer with marketing and sales efforts will you be able to change your business.
In our next article, we’ll discuss how you can market to a niche market like a professional. You can also join our email newsletter to get tons more tips like the info in this blog. We keep those emails snappy and to the point so you can get a quick marketing tip that you can apply in your business immediately.
Until next we meet, God be with you.
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