When I ask business owners who their target market is, many tend to respond with “everyone”. The translation is no one.
In their zeal to acquire as many customers as possible, many business owners try to serve the widest market possible.
This is a huge mistake.
By narrowing down their target market, many business owners fear that they will be missing out on potential customers.
Their reasoning is that if they go for the widest market possible, then they have a better chance of acquiring more customers.
This is a typical marketing newbie mistake.
DO YOU WANT TO GROW YOUR BUSINESS RAPIDLY?
WHAT IS A NICHE?
Before going any further let’s define what a business niche is.
A niche is a tightly defined portion of a sub-category. For example, think of the health and beauty category. This is a very wide category. A beauty salon can offer a wide variety of services including tanning, waxing, facials, massage, cellulite treatment and much more.
If, for example, we take one of these sub-categories – let’s say cellulite treatment, this could be our niche. However, we could tighten it up even further by focusing on cellulite treatment for women who’ve just had a baby. This is a tightly defined niche.
AN INCH WIDE AND A MILE DEEP
Now you may be thinking why on earth would we want to limit our market so much.
Firstly by targeting a tight niche our message can be highly targeted. This results in far superior conversion rates and it grabs the attention of your market.
If you’re a woman who’s just had a baby and are concerned about cellulite, would an ad targeting this specific problem grab your interest? Most certainly.
How about if the ad was a general ad for a beauty salon which reeled off a long list of services, one of which was cellulite treatment? Likely it would get missed in the clutter.
That’s the secret sauce. As mentioned in our previous article on emotional direct response copywriting – we want to enter the conversation going on in the mind of our prospect.
Doing so is practically impossible if you are targeting a wide audience with a vague or general message.
A new mother with a cellulite problem will have a very different conversation going on in her mind than a single woman wanting to look a little more tanned.
Targeting a tight niche allows you to become a big fish in a small pond.
It allows you to dominate a category or geography in a way that is impossible by being general.
The type of niches that you want to go after are “an inch wide and a mile deep”.
An inch wide meaning it is a very highly targeted subsection of a category. A mile deep meaning there a lot of people looking for a solution to that specific problem.
Once you dominate one niche, you can expand your business by finding another profitable and highly targeted niche, then dominate that one also.
Now you can have all the advantages of being highly targeted without limiting the potential size of your business.
THE COST OF CUSTOMER ACQUISITION
Another massive advantage of targeting a niche is that your marketing becomes much cheaper.
Targeted advertising ends up being much cheaper than mass marketing because there is a lot less waste.
Going back to our previous example, instead of having a general beauty salon ad in the classifieds, you would have your cellulite ad in “New Mother Magazine”.
Your cost per lead will drop dramatically because your message to market match is much better and hence your conversion rate will be much higher than if you had a general message in your ad.
Your advertising cost would also be lower because your target market is smaller.
The entire goal of your ad is for your prospect to say, “hey that’s for me”.
Being all things to all people is unlikely to have the same reaction.
MAKING PRICE IRRELEVANT
If you had just suffered a heart attack, would you prefer to be treated by a general doctor or a heart specialist? Of course you’d choose the specialist.
Now if you had a consultation with the heart specialist, would you expect them to charge you more than a general doctor? Of course.
Your bill with the specialist would likely be much higher than with your general practitioner, yet you’re not shopping on price.
How did price suddenly become irrelevant?
That is the beauty of serving a niche. Whether you do heart surgery or offer cellulite treatment, you can now charge far more for your services than by being a generalist.
You’re perceived differently by your prospects and customers. A specialist is sought after, rather than shopped on price. A specialist is much more highly respected than a jack of all trades. A specialist is paid handsomely to solve a specific problem for their target market.
So figure out the one thing your market wants a solution to, something that they’ll pay you handsomely for. Then enter the conversation they’re having in their mind, preferably something they go to bed worrying about and wake up thinking about.
Do this and your results will dramatically improve.
If you enjoyed this article, you may also enjoy our article on What is Direct Response Marketing? As a small business owner, it’s the smarter way to market your business.
3 thoughts on “The Riches Are In the Niches”
Im trying to implement this on my site, ‘niching’ down a general classified ads to Electronics (without common household appliances). DO you think this will be enough to concentrate on a semi large market?
Allan! You have explained about Niche and how to exploit its potential to boost sales. Thanks for the insightful article.
This is well written, awsome and worth sharing. I have a number of niches and I have done remarkably good and well for almost 50 years. My niches are coaching “disruptive physicians”, certification of anger management facilitators, certification of domestic violence intervention facilitators and emotional intelligence coaching for executives.