“Pick a Niche and Serve it Better than Anyone Else.”
Nearly twenty years ago, this was the advice that was given to me by a veteran producer in the insurance industry—a top producer who also invested much of his career in teaching others. It goes along the same lines of “…if everyone is a prospect, then no one is.”
And while at that time, it was probably one of the most important pieces of advice ANYONE in business might receive (regardless of profession), in today’s fast-paced digital world, it’s now more relevant than ever.
When prospecting for leads and sales, a traditional first step is to explore your natural markets: individuals with whom you have affinity (something in common, such as living in the same community, attending the same church, or be in a similar stage in life, relative to age or family), and access (you can reach out to them with relative ease–most likely because you’re already acquainted).
And while that model may still have applications in many spaces, I have found that in many others, especially in the B2B space, it’s far less fitting.
Niche markets are groups of people defined by certain criteria. To work, these groups must be large enough so that you’re less likely to run out of names, and small enough so that the members are interrelated to the degree that your reputation might precede you (i.e. building a brand). The group is identifiable, accessible, and has members with common traits and needs. They also may communicate with each other on a regular basis.
For instance, if you sell office supplies, you may wish to focus on companies of a certain size. An attorney may develop a specialty by addressing the specific needs of people within a certain profession or industry, such as engineers or home contractors.
Exploring niche markets and your capacity to serve them may create opportunities that you never realized existed. Furthermore, you can begin exploring potential niches within the realm of your current natural markets. It might start with the simple question: “Who can I help more effectively than anyone else?”
Benefits of Niche Markets
Some may think it counter-intuitive to actually decrease the number of people you target for prospecting. However, when you effectively target your prospecting efforts to predefined niches, several things can occur:
You Become a “Specialist” for Your Niche
To effectively target a niche market, you must first tailor your service to meet the specific needs of that market. When you become educated about the goals, challenges and wants of a certain group, you become a specialist. This gives you a tremendous competitive advantage: you can serve them more effectively—likely better than most of your competitors. You can also earn more—it’s why specialist physicians tend to earn more than general family practitioners.
Your Name (or Brand) Becomes Well Known
People in groups talk! Doctors talk with other doctors; lawyers talk with other lawyers; clergy talk with other clergy. If you are exceptional in what you do and serve your niche clients well, word gets around.
You Will Stand Out Among the Competition
By narrowing your focus, there will be less competition for the same audience. Indeed, if you become a dominant player in serving the needs of your niche market, it will greatly deter others from intruding. Less competition means more business with less effort.
Prospecting Will Become Much Easier—Especially in the Digital Space
This is probably one of the key factors that has elevated the significance of focusing on a niche. Social platforms such as LinkedIn and Facebook are pure examples of the awesome power of targeted, digital marketing. Identifying and contacting your prospects on a favorable basis can occur with greater ease. The more clearly defined your group, the more targeted your efforts and your marketing message—the less time and money will be wasted on mass marketing efforts.
Types of Niches
Niche markets can be defined using four basic criteria:
1. Occupations & Industry
This is likely the most common kind for those in the B2B space. These folks share the same, or similar, job or profession. They can be widely or narrowly defined (such as all architects or broken up further into specialties). Because these people share the same job or profession, we can assume that they all share similar problems, concerns, needs and wants. Products and services can be tailored (or positioned) to address the needs of these people.
A demographic niche consists of people who share one or more of the same characteristic, such as age, gender, income level, ethnicity, or any number of other criteria. This group may also be defined by stage of life, such as singles, married parents of young children, single parents, widows and widowers, and retirees.
As you may expect, geographics are determined by people living in the same neighborhoods, subdivisions, school districts, voting districts, suburbs, apartment complexes, zip codes, counties, cities, states, or countries.
Psychographics is the study of how people think, what they like and dislike. People who share the same psychographic profile often have similar interests, values, passions, and hobbies. Another term for this definition is “subculture,” which can be broad (all democrats) or narrow (all model plane enthusiasts between the ages of 30 and 45).
A Word of Caution…Avoid Crowded Niches
If you choose to focus on a niche, there is room for caution, as well. There are some niches—physicians being a common example—that may be too crowded (that is, too many people going after them). Years ago, when I was a producer at Principal Financial Group, we had a guy in the office whose bread-and-butter was selling disability insurance (DI) to physicians. Obviously, he knew the right people and the referrals were nonstop.
But if you’re in that space, you know fully well that doctors are not the only high-paying profession that require DI! So if you’re in that space, unless you’ve got connections that enable easy access to that market on a credible basis, focus on a niche that you can reach with relative ease (and again, your natural market may provide a clue).