To Niche, Or Not To Niche

When I started my agency, my niche was doing email marketing campaigns for corporates.

Before long, we had lots of clients, not many competitors, healthy margins, and a fast-growing business.

What was wrong with this picture?

Well, the problem was that while we were making money, we couldn’t charge much per send.

That wasn't the case with building websites. Or managing social media campaigns. Or doing content marketing. Or running online promotions.

Plus, at the time, there was far more demand for these other digital services, than there was for email marketing.

As a digital agency, it wasn’t a big leap to add these extra arrows to our service quiver.

So we leapt.

Commercially, it was an excellent decision.

By offering these new services, we made many additional millions of dollars from current and new clients than we did from creating and sending email campaigns.

However, there was always this question knocking at the back of my head: what if I’d stuck to our original email marketing niche?

Could I now be running the world’s largest email marketing agency, with offices in London, New York, Tokyo and Rio?

I’ll never know.

Business is all about sliding door opportunities.

No matter how much research you do or rely on, deciding what you should focus on comes down to a judgement call.

One way to tilt the odds in your favour is to look at the size and market demand for the niche and assess your potential competition.

While there are approximately 15,000 marketing agencies in Australia, a quick search on Sales Navigator reveals that there are over 76,000 senior marketers working in companies with 50 or more employees.

Notionally, that suggests that at least considering a niche focus is a worthwhile exercise.

Why you need a niche:

Focus and Expertise: Look at a general practitioner versus a specialist doctor. While the GP has valuable, broad-based skills and can make good money, the specialist has mastered a specific area of medicine, and can make enormous money.

Similarly, by honing in on a niche, your business can focus its efforts on understanding the unique challenges, trends, and opportunities within that market. This concentrated focus can allow you to develop deep expertise, positioning your business as a trusted authority in your chosen niche.

Clients are more likely to choose a specialist who understands their specific needs over a generalist who offers a ‘we can do it all’ solution.

Differentiation: In a crowded market, differentiation is key to standing out.

As per medical specialists, clients are often willing to pay a premium for specific expertise because they perceive greater value in working with a business that understands their industry, or specific needs, better than a generalist.

Your niche becomes your USP, setting you apart from the competition and making it easier for potential clients to choose your business over others.

Targeted Marketing: It can be exhausting being all things to all people.

When you dispense with the ‘Jack of all trades, master of none’ philosophy, you can be laser focused with your marketing.

Instead of casting a wide net and hoping to attract anyone and everyone, you can focus your marketing resources on reaching the individuals or businesses most likely to benefit from your specific services.

Keep it Simple: As harsh as it sounds, clients don’t care about you. They really only think of you when they have a problem that maybe you can solve for them.

The simpler you make the answer to this question “Who can help me to do X service?” the more calls you’ll get. If you also deliver ‘A, B, C, D …..’ services, you make it that much harder for your customers to remember what the heck you do.

Whales are being bombarded daily by people and companies wanting to take their money; make it really simple and easy for them to give it to you.

Why you DON’T need to niche:

Overly Narrow Niches: While specificity is important, be cautious of niches that are too narrow or restrictive.

While it may be exciting to find a niche with little competition, there may be a reason for that.

Don’t waste time tilling a fallow field.

Ignoring Market Research: Before committing to a niche, it's crucial to conduct thorough market research to validate its viability.

This includes analysing the size of the market, identifying your target audience's needs and pain points.

While ultimately you need to make a judgement call, it helps to have some data to give you confidence in what you decide.

Lack of Flexibility: While niching down can provide focus and clarity, it's important to remain flexible and adaptable to market changes.

Industries evolve, consumer preferences shift, and new technologies emerge - all of which can impact the relevance of your chosen niche.

Avoid becoming too rigid in your niche selection and be prepared to adjust your strategy to stay competitive.

Failure to Communicate Value: Even if you've identified a niche with high demand and minimal competition, your business's success will ultimately depend on your ability to effectively communicate the value you provide to clients within that niche.

Clearly communicate the benefits of working with your business and how you differentiate yourself from competitors in the niche.

Neglecting Diversification: While niching down can be a powerful strategy, it's often important not to put all your eggs in one basket.

Relying too heavily on a single niche leaves your business vulnerable to market fluctuations or changes in client preferences.

So, what's the takeaway?

Do what works for you and your market. Only you can decide if going niche is the right way to go.

A good way to get off the fence is to experiment, test and measure.

Good luck!

If you want to get bigger clients and bigger budgets, we can help you achieve that! Book a session with us here.

If you’d prefer to receive this newsletter via email, please sign up here: https://bit.ly/landingwhales. Plus, you’ll receive a free copy of my book ‘Customer Romance: How to build your brand one customer at a time’.