Whether you are just starting out in your business or managing a successful practice, developing a niche market is one of the most effective strategies for long-term growth. A profitable niche market solves many business challenges, including building significant client relationships and branding yourself in the marketplace.
Whether you are just starting out in your business or managing a successful practice, developing a niche market is one of the most effective strategies for long-term growth. A profitable niche market solves many business challenges, including building significant client relationships and branding yourself in the marketplace.
Getting Started
Developing a niche market is absolutely attainable; however, you need to choose the right market, be visible with valuable content and consistently build relationships. The market you choose will dictate how long the process will take and how profitable it will be long-term.
To select a viable niche market, you first need to understand what a niche market truly is. Niche marketing is a different strategy than general marketing or prospecting. It is about building relationships and visibility within targeted sectors.
General Marketing vs. Niche Marketing
General marketing is everything you do to build awareness of your brand, position your services and cultivate clients. It uses a coordinated strategy, including:
- Branding
- Digital marketing
- Prospecting events
- Client cultivation
- Consistent activity
- ROI measurement
The problem with general marketing is that it lacks focus. You might try several marketing strategies, yet never engage the clients you want. It can be expensive in terms of time and dollars when not done properly. This is where developing a niche market hones your focus.
Niche Market Definition
A niche market is a specific group of people who have common needs and characteristics. But, it is not just about demographics. The people in the niche market need to interact with each other. This allows you to become part of the network, whether in-person or through online forums.
Niche marketing centers on the unique needs and interests of a group. Your brand and approach will be tailored to the market’s definition of value.
To quality as a niche market, the market needs to have what we call the “3 Cs”:
- Common needs
- Common characteristics
- Common ways of communicating
Choosing a niche market requires research. A good starting point is analyzing your client base or community relationships to determine which markets will be right for you. You can then leverage your warm relationships in the market to gain introductions to their network.
The research is often the hardest part; followed by an ongoing commitment to the market. To find success, you need to research at least 6 niche markets to find 1 or 2 that are viable. You can watch our training video on niche marketing to walk you through the process.
It’s more than demographics.
Too many businesses choose a market based solely off of demographics. However, demographics are only the starting point. You need to reach the people in that demographic! That is the crux of niche marketing.
If your goal is to become well-known and trusted in a market, you need to find the networks, groups or clubs that bring members of the market together. When members interact with each other regularly through groups, clubs or associations, you have a chance at becoming part of the network.
A niche market works best when you can access a local network or group for the market.
Define your market based on demographics AND the availability of networks in that market for best results. Make sure there is at least several hundred members in the network to have enough prospective clients to interact with.
Niche markets are not products or services.
In the words of marketing strategist, C. Richard Weylman, “Markets are people, not products.” For example, you might say your market is pension income planning. Pension income planning is an area of expertise and a set of strategies, not a niche market. The people who need pension income planning are your niche markets. You then need to find networks to access these prospective clients.
Your niche market might be teachers and administrators within a specific public-school system or other government or state employees who need pension income planning.
Teachers and administrators who all belong to the same school system will attend the same in-service days, fall within the same benefits platforms, belong to the same union, etc. The members will generally know each other, which allows you to become well-known faster. This is especially true if you have existing relationships in the market.
Your niche market could also be members of your state Fire Chiefs Association. In the case of fire chiefs, they may all belong to the same association, attend events several times a year, have similar benefits, etc. They could refer you to other fire chiefs when they know and understand your value.
Recreational, Cultural, Faith-Based or Other Markets
Perhaps you choose your niche market based on recreational clubs, cultural communities, faith-based affinities, parents with special needs children, etc.
By actively participating in niche markets, you gain the opportunity to understand the market’s needs and concerns on a personal level. You gain visibility through their networks, which can allow you to become the go-to professional over time.
Being Too Broad
Many firms struggle with niche marketing because they are too broad in their definition. Let’s say you want business owners to be your niche. The problem with that definition is how will you become well-known and trusted by all business owners?
Is “Business Owners” a Niche Market?
Business owners are people who fall within a demographic. However, unless you are in a rural area, it is unlikely that all business owners will know and communicate with each other. Even if there is a chamber of commerce present.
If you want to work with business owners or C-suite executives, you need to narrow your niche market further. One example could be architectural firms or C-suite executives in architecture. Architectural professionals may network and communicate through the American Institute of Architects association. Their association is how they might communicate with each other professionally or gain other benefits. There may also be online groups through LinkedIn where architectural professionals communicate together.
Perhaps there is a large architectural corporation in your city with over 500 employees. If you manage their qualified plan or have clients at the firm, you may be able to build visibility within the company.
Another reason business owners is too broad for a market is different industries have different circumstances. All business owners may have common needs such as tax planning, benefits planning, retirement planning, succession planning, etc. However, a medical practice will have a different set of circumstances and revenue streams than a construction business. The medical industry is affected by insurance and government regulations that affect profitability. The construction industry is affected by the cost of materials, labor and cyclical economies that affect profitability.
You want to be able to speak the language of your niche market and become specialized in their needs.
Is “Women” a Niche Market?
Another niche market that is too broad is “women.” You may want to support women with their financial needs, but not all women know or communicate with each other. You would need to decide which female demographic to focus on (i.e., women in technology, divorcees, widows) and find networks, groups or clubs that bring these women together. Perhaps you focus on women’s auxiliaries that bring the spouses of physicians together.
A specific organization or group that caters to women is how you would define your niche market. An example could be women in construction. Perhaps you join the National Association of Women in Construction. These women not only belong to the same organization; they are all members of the construction field. This further allows you to become specialized in the needs, concerns and preferences of women in construction.
Perhaps you focus on a local chapter of the Association for Women in Science. Where members come together from the science, technology, engineering and mathematics fields.
It’s Not All or Nothing
Focusing on a niche market does not mean you forgo working with other clients. You may be referred to clients outside of your market who fit your ideal profile.
That being said, a niche market allows you to focus your marketing dollars and efforts to build visibility and relationships. You will dedicate a good portion of your time (20% to 30% to start) which will grow as your results progress. Niche marketing is a more affordable and efficient strategy to reach potential clients and build your business long-term.
Developing a niche market is not a strategy where you take short cuts. It takes time, commitment and patience to develop trust and build long-term relationships. But, you have to choose the right market.
The Real Benefit to You
The real benefit in developing a niche market is advancing your marketing momentum, finding your focus and gaining a more powerful presence in your local marketplace.