Target Niches are your way to Riches
Become known as an expert at serving a tight niche market and you can double your fees overnight.
Most small businesses try to serve giants chunks of the market in an effort to capture more business. The reasoning goes something like, "if I can be all things to all people...my market will be unlimited."
The reality is just the opposite. When you attempt to be all things to all people, the only thing that is unlimited is the amount of competition you will face from every other firm that claims to do what you do.
The surest way to tap into the potential of a market is to narrow your focus to one or two very specific niches within a target market group.
When you can become known for serving a tight niche several things happen.
You get very good at serving that niche:
You can more easily communicate what your business does
You can more effectively ask for very specific referrals
You are more attractive to media outlets who need experts
And the big one...you can double or triple what you charge
Most buyers out there, when given the choice, would rather hire someone who has specific expertise and emphasis on their type of business or need.
An architect would much rather hire "The Architect's Consultant" than a business consultant.
Someone who wants to learn a certain piece of software would much rather hire a company that features that software as their sole service offering.
When you become the preferred choice, or when you start to get calls from companies whose market you excel in, price is no longer the driving issue. When given enough information, prospects make buying decision based on value, not price. By communicating your expertise and focus on their business or problem, you instantly take a big leap in the value equation.
So, where to look for niches?
Take a look at your current client base. Where do your revenues come from now? In some cases, it can simply be a matter of focusing on what you already do but repositioning the way you communicate.
Don't forget the 80/20 rule. Do 80% of your profits come from one or two services or products?
What about market niches? Do you find that you work better with accountants and doctors? Or maybe you seem to draw retail businesses.
Centers of influence. Where do you have a large number of contacts - your church, your religion, your school, a hobby, an Association, a part of town, etc.?
Your competition. Sometimes niches present themselves by way of your competitors - Either as a niche they are succeeding with or as a way to find gaps that are not being served.
An example everyone could learn from:
The wireless phone industry has experienced tremendous growth over the past 10 years. Players have come and gone, technology has changed, and competition has been fierce. Do you want to know the company that has been the most profitable and grown the most throughout?
Nextel is now the #1 wireless provider in the country in terms of subscribers and profit. I spent a lot of time working in this industry, and I can tell you that the primary reason Nextel has come out on top is because they targeted a niche and let everyone else fight over the price shoppers.
Nextel’s “walkie-talkie” technology offered something very appealing to a specific target niche and everyone else stayed away. Now, Nextel is leading the pack, and no one is nipping at their heals forcing them to offer profit killing promotions.
A couple more examples
A financial planner - This successful planner played football in college and is very involved in his church. He has chosen to use those two niches and focus on folks close to the University and folks involved in the various circles in his religion. 95% of his new clients are voluntarily referred.
A software training company - This small business started out trying to promote its ability to train business owners to use any type of small business software. At some point, they became very good at one popular contact management program and redesigned their entire business around training business owners to use this program to grow their businesses. And the results have been stunning.
An Internet Resource
One of the ways to hunt for potential niches is find out what people are searching for. The Internet offers some great tools for just that. One of my favorites is a service called Overture. Overture is a pay-per-click web advertising service but for "niche hunting" they offer a tool that allows you to type in a keyword, such as software training, and see how many people have searched on that and related terms in the last month. Overture Keyword Suggestion Tool.
John Jantsch is a veteran marketing coach, award winning blogger and author of Duct Tape Marketing: The World's Most Practical Small Business Marketing Guide published by Thomas Nelson.
He is the creator of the Duct Tape Marketing small business marketing system. You can find more information by visiting http://www.ducttapemarketing.com.