Friday, August 10, 2012

Selecting Your Market Niche is Marketing Secret 11/101 for Small Business

Definition of a Marketing Niche and How to Proactively Use Your Business Niche to Grow Sales and Prosper.

The concept of business niche is so critical that I've placed it at number 11 of of my 101 Marketing Secrets.  Let's start with a definition of the term in general from  the role of a plant or animal within its community and habitat, which determines its activities, relationships with other organisms, etc. As to a business, it offers:  2.  a place or position suitable or appropriate for a person or thing: to find one's niche in the business world.  3.  a distinct segment of a market.

In each case, whether an animal, an individual, or a business, niche (from nest) building has to do with finding a great unique location for the nest that provides a nurturing environment for the young (product or service), safe from predators (the competition), close to food (profits), and that is not overpopulated by others (competition).

If you are in business, you are already occupying a niche.  You may have never thought of it that way.  But you have decided, for instance, to either sell your products or services at below market, at market, or above market prices.  That is a niche.  You have decided to offer certain brands or services and not others.  You are open certain days and hours. All of these are niche decisions. 

The question for today is whether you have set out to establish a niche, or whether you have evolved into a niche? And in the process, are you in the best possible niche?  My own business might provide a fairly interesting example.

Most marketing consultant are hoping to have four or five clients paying them $3000 or so per month.  The client base would be a $2m to $5m business who can't quite afford to pay $120,000 or so for a full-time marketing VP.  That niche has many ex-marketing VP's and business owners vying for the available food supply (clients).  I chose to seek out much smaller clients who could never afford $3000 per month, but who could and should afford under $1000 a month for a full range of marketing services. 

I could have, and have dabbled with, offering a more limited range of only internet marketing services for around $500 a month.  However, once again, the market is crowded with folks who offer SEO and websites for that monthly fee. 

Once having determined that I would work in that niche, the obvious issues were:
    1.  How do I tell that story to potential clients?
    2.  Can I afford to offer for under $1000 what other consultants charge $3000 for?
    3.  Can I meet my personal goals and objectives for income and life satisfaction in this niche?

This is the marketing approach to niche building.  No matter how long you have been in your current niche, it is always possible to move and change the details.  For instance, maybe you have always opened at 10:00 like every other shop of your type.  What if you started opening at 7:00 a.m?  Would there be a large group of potential clients who might like to take advantage of that time slot.

Maybe you have a narrow offering of products or services.  Should you broaden it?  Maybe you are trying to offer such a wide range of products that nobody knows who you are.  Should you narrow the product line, and thereby reduce inventory, and probably increase turns?

Location is an obvious niche. Pay more for a great location and more traffic. Pay less to avoid high overhead, but need to spend more on advertising. Pay nothing and work from home.

The customer experience has become a major niche, both online and in store. Are you providing a customer experience that coincides with their expectations and your pricing. The more you charge the better the experience needs to be.

Action steps for Day 11:
  1. Make a list of the characteristics of your niche
  2. Are you losing customers or sales due to any changes in your niche
  3. Are there opportunities to change any of those to your advantage
As with most of my 101 Marketing Secrets, an entire book could be devoted to this one.  But the goal here is to give you a cruise through the various islands of marketing concepts.  Some of the islands might really speak to you and cause you to want to learn more.  Did this one give you new insight? 

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