Many advisors we work with fear the same thing when asked about focusing on niche markets, “I’m afraid I will lose business.” The reality is, firms that hone their focus on specialty services, specific products, and specific needs are more appealing than those offering general services to a broad market. Identifying niches is a low-risk means to grow your business.
The first step is to understand the difference between target and niche markets:
- A target market is the identified group of people your firm serves
- A niche market is comprised of specialty services you offer to small groups within your target market
How to Identify Your Niche Market(s)
Niche marketing falls out of the normal realm of mainstream business. It involves focusing and marketing to a limited group of people with a specific message linked to your product and services.
Some helpful tips when choosing your niche markets is to think about your passions, ties within your community, and your existing client base. Determine how you can build a niche market from the connections you have. Identify your niche with a narrow focus, but remain flexible to expand as new business is generated. Utilize the following guidelines and questions when identifying your niche:
- Choose niche markets by defining high degrees of specialization for groups of people and their specific needs.
- Create a value statement specific to your niche that details why and how you are relevant to them. If your niche doesn’t understand how you can meet their needs, there is no opportunity.
- How many people/businesses are in this niche market – will it nourish your firm?
- Do you have easy access to this group of people or the ability to gain an introduction?
- Does this niche market need your services? Do you offer specific solutions to meet their needs?
- Do you understand the needs of this niche?
- Will you enjoy working with this group of people?
Niche markets give you the opportunity to clearly differentiate your firm from others and position yourself as an expert in the industry.
How to Make the Most of Your Niches to Gain Market Share
Batch and blast marketing methods are outdated. Marketing to your niche is all about personalization.
Your market will not respond to generic marketing unless it specifically applies to them at a given moment. Time, effort, and cost are wasted on blindly marketing meaningless, non-specific products and services. The means in which you communicate with each group requires uniqueness.
Once you have identified your niches and the market needs of each group, craft marketing messages that resonate specifically to your niche. Personalized messages are essential to the success of a niche marketing plan. By offering clients and prospects services and products they want and need, you are much more likely to convert them to buying clients.
Think about the 80/20 rule: focus on the 20 percent that matter. Eighty percent of your target market probably won’t buy from you, but when you identify the 20% who are most likely to become clients, you give your firm a laser-like focus. Without that focus, you expose yourself to presenting a message that does not resonate with 80% of your market.
Glean New Clients from Your Niche
By placing focus on the niches you have identified, your ability to hone in on select groups and provide specialized service will open the door to more referrals. But, you have to be willing to do some work.
Simply asking for a referral, without providing a descriptive landscape, makes it difficult for others to refer an ideal and compatible potential client. It’s your responsibility to steer your clients, alliances, and centers of influence in the proper direction with a clear and concise description of the type of client you are looking for. Be specific. For example, remind them of the specialty service you offer that may benefit their peers at “ABC Company.”
Benefits of Niches
By identifying a market position or niche, you will be on the path to increased operational effectiveness, success, and a clear vision for you and your firm. Your service and product offerings will be aligned with your niche, thus providing a solution to client’s unique needs.
When you identify and market to a niche, your firm is:
- More likely to have an impact: Strong positions in a target market provide your business with identity.
- Able to stand apart from competitors: Your firm is positioned to connect and engage in meaningful solutions to specific needs.
- Positioned to grow organically: By providing laser-focus service, your clients will be marketing your firm for you.
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