What is your niche market?
Niche Marketing is concentrating all of your marketing efforts on a small but specific, well defined segment of the population. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a big pond. Niches are ‘created’ by identifying needs, wants, and requirements that are being addressed poorly or not at all by other companies, and developing and delivering services that satisfy them. Niche marketing is also called “micromarketing”.
It’s not surprising that so many companies have embraced this strategy. It allows owners to avoid the intense competition found in their markets. In other words, simply avoiding the competition of mass markets isn’t enough. Companies need to identify their unique market sweet spots, those areas that resonate so strongly with target customers that they are willing to pay a premium price, which offsets the higher marketing costs associated with niche clients.
Questions to Ask Yourself
1. As part of a strategy of selling your services, are you being careful to distinguish potential future client’s sweet spots from valueless niches that produce needless complexity?
2. Are you listening carefully to what clients are saying online about your services, and are you reacting quickly to make improvements within your Business that address any negative comments?
3. Are you standardizing marketing collateral as much as possible?
4. Are you aggressively keeping costs down with strategies that allow you to complete services efficiently?
5. Are you continually reviewing your service portfolio to weed out those services that aren’t contributing to profits, while being careful not to dump services that aren’t big sellers but still contribute to the firms overall profitability?
If you answered no to any of these questions, you are not getting the most revenue out of your Business—selling a variety of precisely targeted services designed to resonate with potential and current customers. Following the steps on this page will help you manage the complexity of niche marketing and realize superior profitability.
The vast amount of information available on the Internet has made niche marketing more important than ever and easier to do. More important because all that information encourages comparison shopping, putting tremendous downward pressure on prices and profits in a highly marketplace. And easier because it eliminates much of customer’s uncertainty about Companies, since they can easily find reviews, ratings and comments on every business. Today’s consumer is truly listening to word-of-mouth.
Finding your sweet spot in the market is especially important in these tough economic times, when so many potential customers are strapped for cash. Many will compromise whenever possible by looking for cheaper pricing. With the right approach, niche marketing can fulfill its promise. Swoboda Marketing has found that there are six marketing principles, when taken together, will allow a Company to manage the complexity of niche marketing.
That’s not as easy as it might sound. Finding profitable new niches requires a set of skills different from those needed to build market share or to create variations of an existing services—you’re looking for places where the niche resides and communicate with them directly, not one where customers are complaining about existing choices. Many Companies use these analysts to explore why customers buy what they do and who they would buy from if they knew who was available.
Listen to Your customers. Really Listen.
Traditional advertising campaigns don’t make sense for most niche markets; they’re too expensive and too difficult to target precisely enough. Their producers have learned how to work with consumer-generated content online—reviews, ratings or just chatter about a services. They don’t just listen when clients talk to them; they listen just as carefully when clients talk about them.
The beauty of consumer-generated content is that companies get immediate and continuous feedback about their services. The key here is to listen closely and react quickly. Owners should watch for the first online comments about their services. Customers will make it clear right away what they like about the services and what they don’t.
Harsh reviews can have devastating consequences. Negative online reviews are the best predictors of a Company’s inability to sell itself online.
Some traditional marketing still has its place, and indeed has become more powerful thanks to the way word-of-mouth spreads so quickly over the Internet. Companies can generate positive buzz for niche services with traditional marketing as well.
Control Service Costs
Selling a large number of narrowly targeted services may sound like a service nightmare, but it doesn’t have to be. It also pays for a company to have a high-volume services in its portfolio that will keep its staff from sitting idle for stretches of time. The relatively low volume of sales in narrowly targeted markets means they will be working to their full capacity to meet demand. A high-volume, if less profitable service can take up the slack.
It’s not just service costs that will determine the profitability and ultimate success of niche marketing offerings. Production costs are also important. There are ways here, too, to keep costs under control. It can be difficult to forecast demand for services with limited sales, but that doesn’t necessarily mean a company needs to maintain high levels of support staff to keep from getting caught short. Companies that offer many varieties of a services based on different combinations of components, can keep staffing low by outsourcing particular services as ordered—there’s no need to keep a large staff.
Some Apparent Losers Are Worth Keeping
Even with the best research and the most careful marketing, some services will be unprofitable or only marginally profitable. But before discontinuing a services, a company should consider the service’s value in broader terms. Some services that don’t generate significant profit directly still help make a Company’s other services more profitable.
Prune Your Services Ruthlessly – Companies that relentlessly drop services that don’t contribute to profitability directly or indirectly will remain the most profitable.