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Business Guide: What’s in a niche?

NORTH East-based marketing guru Ford Henderson unveils his top tips for finding a niche in market and transforming it into a successful business.

If I were to ask you who your services are aimed at, how would you reply? Without wishing to be too presumptuous, I’m guessing that your response went something like, ‘The ones with the money’ or ‘Whoever’s willing to pay for them.’

What if I were to suggest then that the wider you cast your net, the smaller your catch? Sound illogical? Okay then, think for a minute about Jaguar Cars. If they were to work on the assumption that EVERYONE is a potential customer and market their products accordingly, not only would they be pitching at the huge number of people who couldn’t afford to buy and for whom their products were entirely impractical, but it would cost them a small fortune to do so. If the company had not truly understood who their target customers were and had not built their marketing strategy around them and them alone, they would have gone out of business years ago!

One of the biggest mistakes that many service professionals make is to work on the basis that if they ‘keep it general’, they will get more business, when in fact precisely the reverse is true. The more narrowly you define your market, the more new and qualified buyers you can attract into your business and the less your marketing efforts will cost!

What are the benefits of choosing a niche?

Whilst it might be tempting to think of targeting specific areas of the market as limiting your possibilities and your potential income, by focussing all of your attention in a particular direction, you achieve three very important things.

• You make your marketing efforts considerably cheaper than they would otherwise be and far, far easier to manage. Think again about Jaguar Cars. By deciding that they were only going to target the relatively wealthy, image-conscious and luxury-loving customers, who only make up a small proportion of the total car market, they can invest their marketing budget only in those areas which already attract their target clients.

• News of your brand travels far more quickly in a smaller market segment because what you have to offer is relevant and your audience is an attentive one. Your reputation grows as you begin to be recognised as an expert.

• As you become known as the person to consult in your field, so your target clients will want to seek you out and so they will be prepared to pay highly for your expert services. What you will get, therefore, are pre-qualified clients who are much less likely to quibble about prices and much more inclined to pay higher rates!

How To Choose A Profitable Niche

Choosing a niche in which your business can prosper isn’t rocket science, but having said that, it is probably one of the most important business decisions that you will make and so deserves an appropriate amount of your time and attention. Remember that in matching what you have to offer to a target market sector, your aim is not just to build a profitable business, but a sustainable one too, and so there are a number of things that you need to take into account.

The remainder of this strategy and the following two strategies will lead you through all you need to know to choose your niche in just three simple exercises. Before you start to complete the exercises, you might find it helpful to read through them all first to give you an idea of where your responses are leading.

Understanding the types of niche

There are only four main types of niche that you really need to worry about and these are based on:

• Occupation – these are all the people who are employed in the same business or profession within an industry, eg doctors, lawyers, veterinary surgeons, hairdressers, forensic scientists, etc.

• Geographical location – this group comprises all those who live, work or conduct business from the same physical location, which could include a district, town or city, county or country.

• Demographic profile – this niche consists of people or businesses which share common characteristics. These might be anything from personal or physical characteristics such as gender, height, weight, age, social class or ethnicity, to financial characteristics such as income, business turnover or the value of their homes, or elements such as the number of business employees, readership or membership numbers, etc.

• Psychographics (or psychological and sociological characteristics) – this group takes into account attributes related to personality, values and ideological beliefs, attitudes, interests or lifestyles and it can be a particularly useful niche to look at because much of an individual’s disposable income is spent on those things about which they feel passionate. There could be a wide variety of characteristics in this group, such as those people who like a particular type of music or sport, have particular political views, love cats, are concerned about the environment or hate the Internet.

The possibilities are just about endless.

Ford Henderson runs Tyneside-based consultancy Ford Henderson Marketing. Click here to read his full e-book on marketing or email him at ford@fordhendersonmarketing.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .