Struggle with setting your prices?? Let’s make your pricing as simple, stress-free and profitable as possible!
There’s a common expression in entrepreneurial circles: ‘The riches are in the niches.’
It’s worth noting that if you pronounce ‘niches’ the American way (nit-ches) this rhymes nicely…without that pronunciation it can be a little confusing. Even with it, what exactly does it mean?
Simply put, the notion is that dedicating your business to a very specific niche is the best way to maximise your profits.
The logic behind this is super-simple: the more specific you are in your targeting, the more effective your marketing becomes, and the more profitable your business grows.
Many entrepreneurs struggle to grow their businesses because they’re very vague in who they’re targeting.
Here are the two most common mistakes I see made:
- Offering a very broad range of services, each targeted at a different type of client, resulting in your target audience being incredibly diverse.
- Having a specific service that could be highly targeted, but marketing it to a very broad audience for fear of missing out on sales.
The end result of both of these situation is that your marketing message is very generic.
It has to be, because you’re aiming it at an audience of such diversity that making it specific would alienate a huge chunk of the people you’re targeting.
Marketing works best when you connect with your prospects on a really deep level, with a message that tells them:
“I know you, I know exactly what problems you’re facing, I know why it’s so important to you to solve those problems, and I have the perfect fix. I know all of this because I am/was just like you!”
That is impossible to achieve with a broad audience and generic message, because the people you’re targeting are nothing like each other. You can’t describe them, their situations, or the problems they’re facing.
By extension, the issues they need solving vary, and while you may have products and services that could potentially solve all the problems of all your audience, there’s no way to demonstrate that effectively in your marketing.
If you try, you will end up coming across as a ‘Jack of All Trades’. A purveyor of odd-jobs who dabbles in everything but doesn’t specialise or excel at anything.
What is a Niche?
The fix to this problem is to focus your business and marketing efforts on a very specific niche.
A niche is a clearly defined sub-segment of a market or industry that is much larger as a whole.
For example, Finance is a huge industry. Accounting is a subset of that industry, and a lot of entrepreneurs offer accounting and bookkeeping services. A smaller subset of that are entrepreneurs who coach business owners on how to maximise their profits. An even smaller subset of that is the specific methodology I use to do it: Profit First.
So while my market or industry is finance, my niche is helping clients build highly profitable businesses using the principles of Profit First.
Here’s another example. Say you’re in the weight loss industry – a massive, multi-million dollar market that is packed with huge companies, which are incredibly difficult for small businesses to complete with.
Going head-to-head with those big corporations, like Weight Watchers and Jenny Craig, probably isn’t an option for you. But if you really narrow the scope of your weight loss services to a very specific clientele, you can not only compete, but dominate your niche.
You might narrow it down so that you only target women.
Except that’s still really broad, so how about women looking to lose weight after pregnancy?
Better, but it still applies to a lot of people. So you narrow it further, to only include women of a certain age, or in a specific location, or with an additional condition that affects their weight management, like diabetes or hyperthyroidism.
The world is full of finance experts and weight-loss advice. It’s incredibly difficult to get noticed if you define yourself and your business by your industry. But when you niche down to a really specific methodology – like Profit First – or an incredibly narrow target audience – like new mothers with thyroid conditions looking to lose weight – you can position yourself as an expert in that very specific thing.
The more you ‘niche down’ the clearer your marketing message becomes, and the easier it will be to attract clients.
What Are The Benefits of Niche Marketing?
Niche marketing has HUGE benefits. Not only does it help you to stand out in an incredibly crowded world, it also limits your competition to others in that niche, rather than everyone in the whole market.
Once you have a niche, it’s also super-easy to distinguish yourself even further by creating a totally unique selling point: a completely original method or means of delivery, a twist on the thing your competition are offering, and suddenly you’re the only person capable of delivering.
Nothing improves your marketability and profits quite like the impossibility of getting the same thing elsewhere.
Aside from clarifying your marketing message, limiting the competition, and ensuring you utterly sparkle, niche marketing is also a lot more affordable.
Rather than targeting a wide audience, you’re only paying to put your message in front of the people you’ve specifically tailored your product or service for.
What you have is perfect for them, and they’re a lot more likely to say yes than anyone else.
So you’re only paying to put yourself in front of people highly likely to convert.
This is really difficult for a lot of people to grasp, because of the sense that you should get your message out to as many people as possible. Surely that’s how you maximise your prospects when it comes to making sales?
The more people seeing your offer, the more chances there are for people to buy.
While this may be true, if a huge chunk of the people looking at your stuff are never going to be interested in it, so showing them your offer is a complete waste of time, money, and resources.
Keeping your costs down as much as possible is an important part of improving the profitability of your business, and one of the core principles of Profit First.
Targeting a niche market is one of the most effective and simplest means of cutting costs, because it involves spending a lot less in several key areas:
- Testing your message and tactics.
- Running multiple campaigns to target different groups.
- Wasting resources targeting people who are very unlikely to be interested in your offer.
- Paid marketing, which can be heavily supplemented by organic forms of marketing, like content marketing and social media marketing, networking and word of mouth.
- Constantly finding new clients to replace those that have stopped working with you.
That last point is crucial.
When you specialise in a particular area and target a specific niche, you naturally develop a community and following.
Your clients don’t buy from you once and forget you ever existed, they become hardcore fans, returning to you again and again, snapping up new offers as soon as they’re available, and raving about you to their friends and family.
Should You Niche To Your Passion Or Follow The Money?
One of the biggest questions that always comes up when I suggest narrowing your business focus to a very clear niche, is the issue of passion vs money.
Do you choose a niche that allows you to follow your passion, or do you pick a niche that’s going to make you bucket loads of cash?
The answer often surprises people, because it’s not often you get to have your cake and eat it:
Find a niche that allows you to follow your passions and the things you’re supremely good at, and it will become the niche that is most profitable for you.
An effective niche hinges on three things:
- Your ability to understand your ideal clients.
- How effectively you establish yourself as an expert in your chosen niche.
- Your ability to put a unique twist on your offering.
All of that is infinitely easier when you’re working in an area in which you excel, doing something you’d happily spend all your time doing.
The more effective you are at leveraging your niche, the more profitable it becomes.
You don’t have to choose between your passions and profit. In niche marketing, passion leads to profit!
How To Find Your Niche Market
Your first instinct as you start trying to narrow down your niche may be to think of something nobody else knows about, so that your niche is completely unique.
Believe it or not, this is a mistake – it’s really hard to market something nobody has ever heard of, to people who are unaware they need the thing you’re selling.
And in reality, there really aren’t any ‘new’ niches. There are only niches that are new to you.
That isn’t really what you’re looking for, because you want to be working in your zone of genius, doing something you’re genuinely good at and passionate about.
It’s not often people discover something totally new, that they really love, and turn out to be amazingly good at!
To put that another way, niching down isn’t about reinventing the wheel, but capitalising on what you’ve already achieved.
So stick to what you know and what you love, in a niche with existing customers who happily buy products and services related to it.
The latter part is really important, because if you find a niche that isn’t being actively targeted by other businesses, there’s usually a really good reason: either there’s no demand for it, or there isn’t any money to be made in it.
The best thing to do is to find an established, evergreen niche, that already has the following:
- An established track record.
- High demand.
- Lots of easy-to-find reach clients (particularly online).
- Plenty of related products and services on sale.
- Lots of websites, blogs, forums, and social media groups discussing the niche.
If you find a niche that meets these criteria, you can be sure there’s money to be made in it.
Define Your Ideal Client
Once you’ve found a niche in your zone of genius, you need to really clearly define it. You’ve likely already come across the concept of an ideal client, and may even have a clear picture of yours already.
When you narrow your focus to a specific niche, your ideal client will also get increasingly specific.
Narrowing your niche means getting specific about your ideal client.
If the prospect freaks you out a little, remember two things:
- Just because you are focussing on a very specific ideal client now, doesn’t mean you can’t widen your focus later to include more people.
- Your niche doesn’t have to encompass your whole business – you can create a signature service in a very specific niche, which you become known for, and still offer additional options to a wider audience.