|December 1, 2015||Comments Closed|
What is a niche market and why do you need one?
The key to delivering superior growth performance is for your business to be seen and positioned as something different and better than your competitors. You cannot be all things to all people; therefore, niche marketing is one of most important strategic decisions that you can make about your business.
More and more top producing firms are promoting their specialty capabilities and leveraging their industry and product expertise to drive growth.
For many firms, selecting a niche market or industry is an evolutionary process that begins by exploring appropriate industries. It ends with getting new clients that are profitable.
Niche marketing is an ideal growth strategy for any firm, regardless of size. It’s a much easier way to engage in prospecting and business development activities, allowing you to leverage your specialised knowledge, capabilities and resources.
There are two common types of niche marketing: industry focused and product focused:
Some fear that by focusing on a niche market, you’re putting all of your eggs into one basket. However, studies have demonstrated that firms built around one or more industry verticals and/or one or more product-focused specialty teams outperform and grow faster than those firms that do not.
You don’t have to, and in many cases it makes sense not to, limit yourself to just a single niche market. You can allow yourself to counterbalance different market cycles. For example, if you serve accountants, they’re generally pretty busy between April and September. Therefore, having a secondary market such as churches would allow you to maximise your time when your first market cannot be or is not receptive to receiving messages.
The selection process
Here are techniques to help you select your ideal niche market:
Here are some additional sources of information for estimating potential growth:
Making the go/no-go decision
There is no magic formula for deciding what niche to pursue; in the end, your decision must feel right based on your research and analysis. The markets that you choose must be within your expertise, and it is your willingness to commit and invest your time, capabilities and resources that enables you to stand out from the crowd.
If you have any doubts
It’s important that you have confidence in your capabilities to engage and successfully penetrate the markets that you define. This confidence also applies to withdrawing from existing niche markets that may no longer fit (unless they are needed for short-term survival).
Making a decision to abandon a declining niche that that you’ve previously penetrated is difficult, as you have already invested the time and resources. Using the above checklist to identify potential new niche markets and monitor the existing ones will help ensure that your firm stands out from the crowd and consistently produces superior growth returns.