How to Pick a Better Niche For Your Business

If you want to get more traction for your business but you’re running into difficulties. Or if you create a great offer that you think a lot of people will want, but they’re not responding. Or if you spend a lot of time and money trying to generate a growing list of qualified leads, but they’re not leaping at your offers. What gives?

Well, frequently the problem is that you (and, by the way, most business owners/entrepreneurs) are trying to reach too large of a group of people with too generic a solution—and that’s a problem.

Why? Because in an age where access to information is ubiquitous and the number of marketing messages bombarding us is unending, the only thing that gets through is a specific message aimed at a specific group of people who have a very specific and urgent want/need.

As you know, the “everyone” markets are gone. No one wants generic information and help anymore, they want specific information about their specific industry that can help them specifically.

So, how can you do that? Well one way is by choosing to niche down. By choosing to go deeper, rather than shallower. By choosing to narrow your niche vs. enlarge it.

This often seems counterintuitive (“How can I grow my business by narrowing my niche?”). And while there are times when you need to expand your niche, it’s usually wiser to narrow it … until you can get enough traction that increasing it makes sense.

So, how can you pick a better niche for your business? Here are a few ideas.

I. Believe That Going Narrower is Better Than Going Wider

You have to start here because what you believe influences what you do. In other words, it doesn’t make sense to talk about niching your business if you don’t truly believe it’s the right thing to do.

So, let’s take a look at some of the myths that a lot of business owners and entrepreneurs buy into

  1. “If I focus on a niche, I’ll miss out on a lot of business.” (Why? Because in our minds, more means more).
  2. “If I go after everyone (e.g. like all business owners), I’ll have a larger target market (i.e. I’ll have 28M+ potential customers in the US vs. just a handful)
  3. “All the good niches are gone”
  4. “If I focus on a niche, then I’m not being honest with everything I or my business does?”

The problem with each of these thoughts (and others like them) is that they’re all focused on what we believe—what what we believe is irrelevant. All that matters is what the people we’re trying to reach think—and what they think is that going specific is way better than going broad.

For example, let’s say you’re a solo-practitioner dentist and you’re looking for a CRM for your practice. Would you rather buy an off the shelf CRM that’s designed for any business on the planet or a CRM just for dentists? Even better, a CRM just for solo-practitioner dentists? It’s not even a fair fight.

In addition, you can’t compete with the “everybody” companies in your space. They have way too much money to out-market you. For example, if you’re marketing in the health and exercise space, you can’t compete with all the big companies, let alone all the online marketers in the health space. Your only option to compete is to go narrow (i.e. kettle bell training for school teachers).

So from both a strategy viewpoint and a marketing (and dollars) perspective, it’s hard to make a wiser choice than choosing to go narrower. Or, as the saying goes,

“It’s better to be a big fish in a small pond than a small fish in a big pond”

II. Identify a Specific Group of People Who Have a Specific Problem You Can Solve

As you know, at it’s core, business is all about solving problems. No problem. No solution. No value transaction.

So, instead of marketing to “everyone who has a need or want,” you want to start thinking of a specific group of people who have a specific problem you can solve. In the niche world, these are usually broken down into a handful of different niches. The six most common are as follows

  1. Occupational niches – dentists, attorneys, accountants, chiropractors, consultants, hair stylists, dog trainers, etc.
  2. Industry niches – retail, manufacturing, heavy industrial, construction, healthcare, insurance, etc.
  3. Demographic niches – male, female, teens, seniors, millennial, boomers, overweight, etc.
  4. Lifestyle niches – people who like cat videos, dating and relationships, fashion, hip hop, travel, etc.
  5. Interest/Expertise niches – marketing, leadership, making money, time management, knitting, etc.
  6. Geographic niches – Charleston, east coast, NYC, rural, regional, US, etc.

As you review those options, what pops out to you? As you think about your expertise, what specific group or groups would have a specific need your expertise/products would be a solution to?

Note: this could be a decent sized list. For example, let’s say you have a productivity app that you want to take to market. How many niches could that be applicable to? Lots. Executives. Leaders. Moms. Dads. Teachers. Managers. Etc. It’s a huge list.

So, how do you start to narrow that list down? One way is to look at the open space in your market space. For example, let’s say your competitors are all marketing to the executive/leader/manager space. If that’s true, you might want to focus on the mom and dad space. You could probably own that space in a way that would be infinitely more difficult in the executive/leader/manager space which is where all your competitors are playing.

III. Consider If It’s Possible To Still Go Narrower

Since most of us will, by nature, try to go larger, it’s always wise to ask, “Can we go any narrower?”

For example, using our productivity app for moms and dads from above, how could you go narrower? If you’re stuck, here are some ideas

  • You could focus on just moms or just dads
  • You could focus on moms and dads of preschoolers or elementary children or teens
  • You could focus on suburban or urban or rural moms and dads
  • You could focus on affluent moms and dads
  • You could focus on coordinated care between sitters, doctors, drivers, etc.
  • You could focus on first time parents
  • You could focus on second time parents
  • You could focus on blended family parenting, etc.

The options are far greater than most of us think. However, by going narrow, you open up the opportunity to be the dominant player in your market instead of just another player in a crowded market.

So, what potential niche (or niches) you could possibly go after? Note: You choice doesn’t have to be your final choice, just a potential.

IV. Test Your Niche Idea

Niching is both a marketing and a strategy decision. Therefore, it’s wise to test the idea both strategically and marketing wise before executing on it.

From a strategy perspective, I’d recommend asking these kinds of questions

  1. Do the people in this niche actually recognize that they have this problem?
  2. Are they actively searching for a solution to this problem?
  3. Do they have the financial resources to pay for your products and/or services at the price points you want to sell them at?
  4. Can you easily reach the buyers in this market?
  5. Will they need to buy your products and/or services at the frequency that you want?
  6. Can you become credible to this market?
  7. Is this market big enough to sustain you for years?

You want to get an affirmative answer to each of those questions. For example, if you get a “Yes” for the first six but a “No” on the last question, that’s a problem. Why? Because too small of a market won’t sustain you and your business at the revenue levels you want to hit. You want a “Yes” for all six.

Secondly, from a marketing perspective, you always want to test your ideas with real prospects and customers because, as I mentioned above,  what you think is irrelevant. Only what the potential buyers in your market think is relevant.

This is where customer development (from the entrepreneurial world) makes a whole lot of sense. Having real conversations with real customers and prospects, pitching ideas and then getting feedback BEFORE you invest a lot of time and energy into creating a solution (creating maybe a minimally viable version of your idea if need be) is worth doing all the time.

Using our productivity app example, you’d want to interview a bunch of people in your prospective new niche (let’s say the affluent parents niche) and see what matters to them. Even better, if you had a MVP (minimally viable product) version, you could watch them interact with it and then ask, “If this were available right now, would you be willing to pay X for it?”

The brilliance of testing is that it’s never personal. It’s not about what you or I like, it’s what the data shows that real people in our target market want—and the matters a whole lot!

So, as you think about how you can grow your business this year, niching down just might be the right option for you. And if that’s true, I’d encourage you to follow these four simple rules.

  1. Believe that going narrower is better than going wider
  2. Identify a specific group of people with a specific problem that you can solve
  3. Consider if it’s possible to still go narrower
  4. Test your niche idea

If you’ll follow those four simple rules, you’ll not only niche down, you’ll start gaining more traction and drive faster revenue. I know it’s counterintuitive, but going narrower is often the key to growing faster!

To your accelerated success!

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