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Everyone, everywhere is talking about niching down. If you’re anything like I was as an aspiring entrepreneur, you’re probably thinking two things “but I have different types of people I could serve” and “isn’t that going to limit my income?”. Before we tackle those questions let’s start with the basics.
What is a niche?
According to the Oxford dictionary, as it relates to business, a niche is a “specialized segment of the market for a particular kind of product or service” Thinking of it this way, it is the small part of the market that your product/service is BEST suited for. Every product or service can be used by a broad spectrum of people, but developing a niche marketing strategy requires you to isolate the best target audience that your product or service could serve.
How do I figure out what my niche is?
Ask yourself, who would get the greatest benefit from your product/service. Then take that answer and refine it to a profile that specifically defines who you would want to work with! Let’s use an example:
Product: Facebook Ads Strategy Course
Who could it serve: Any person who wants to start a business or has a business but either no ads strategy or their ads aren’t working.
Target Audience: You want to work with people who can pay at least $2500 for the course, will be comfortable in a DIY course, and really just need accountability and a way to ask questions when they're stuck.
In this case, your course is likely not for beginners because they’d need more context and a greater foundation around all the other parts of their business that need to be in place to make the ads successful. It also may not be for business owners who’ve not considered ads before, because they may require a lot more support in figuring out how to layer an ads strategy into the work they’re already doing. You have to think about what your support process could look like, the depth of the content in your course and whether they can actually pay for your service.
Now add some demographics and psychographics to the mix to get super focused. Maybe you only want to serve women business owners ages 25-44 who are generating at least 10K per month and are just looking to scale. Bam, you’ve found your niche and ideal customer!
What happens if I don't niche down?
At face value it looks like you’d be limiting your sales capabilities because you’ll have fewer people looking at your product/service offer. However, the reverse is actually more likely. Fewer people looking at your offer will generate more sales. “How?”, you ask. Your audience will fall into
A confused audience does not buy!
When you are messaging to a very broad target audience, it becomes difficult for you to hit all the right notes to make everyone see that your solution is the right solution for them. They are looking for you to answer the pain points specific to them and it’s really challenging to do that when the pain points for all the people you are trying to serve are very different.
People have a natural resistance to being grouped with people they don’t self identify with.
Because they see their needs and position in life and business differently, even if they aren’t confused by your offer, In their minds, they start to create objections to things in your messaging. In the example above, your ideal customer may say this isn’t for them because they aren’t a new entrepreneur. They may interpret your program as being too “beginner’s” for them.
Every group you’re targeting will require you to show up in different ways.
Your corporate clients are on LinkedIn. Your direct coaching clients may be on Clubhouse, Facebook, or Instagram, depending on the age group. Do you think you can make good content for all these groups across all these platforms? In other words, you will need to show up everywhere and have different kinds of messaging for each. Let's say you could. What happens, when a customer finds you on multiple platforms and your messaging varies?....… They're super confused all over again by your different messaging.
Outside of creating the world of crazy in the minds of your potential customers, trying to serve everyone usually means your operation is in shambles. You are TIRED! It is very difficult to create content everywhere and you will likely be overwhelmed. Also, it costs money to be everywhere all the time, so those sales you thought you were getting, cost you more to acquire.
The beauty of the internet is there's a niche market for everything, and if you focus on it, you can build a sustainable and viable business of it. - Michelle Phan
The advantages of a niche marketing strategy
When you get really specific on who you serve and how you serve them, you trigger in the minds of your ideal customer a deeper commitment. Your messaging is so laser-focused that they subconsciously say “if she knows my pain this deep, she clearly knows how to fix it also”, which makes them buy! While your number in sales reduces from across these broad populations, it grows exponentially in the area that you are now focused on.
If you are fortunate to have a team, being incredibly clear on your niche strategy, sets your team up for success. Because you are a multifaceted, dynamic person, we all know that most people are not. So your team will need a clear direction on who your business will serve so that they can best support your business goals.
Another added bonus is that when you have a clearly defined niche, your ideal customer tends to spend more money and they do so over a longer period of time. In other words, your average order value is higher, so your sales over time increases.
I hope these tips help you! Happy niching!