Niching Down your Business
What does ‘Niching Down’ Mean?
Instead of trying to appeal to a broad audience, a niche business focuses on a narrow segment of customers who share common interests, challenges, or goals. They then choose which product/services they currently offer will match up best with this target market and makes that product/service the main product/service they offer. This allows the business to differentiate itself from competitors and become known as an expert in that particular area.
Niching down can be a powerful strategy for a small business, as it allows them to establish a strong foothold in a specific market and build a loyal customer base. By offering highly specialized products or services, a niche business can often charge higher prices and enjoy higher profit margins than a business that tries to appeal to everyone.
Why should you Create a Niche for your Business?
Thinking about what a niche is can be the first place to start; this isn’t about racking your brain to think of something no one has ever done before.
There aren’t many completely new ideas out there, so as much as this could be desirable, it’s not going to be an easy task. But if you manage to find and crack into that niche you will see massive increases in your profits, with up to 61%, and cost decreases rapidly. Creating a niche within your market is something you can spend some time thinking about.
Finding a Niche for your Business
A great place to start is to think about the type of work you enjoy the most. What aspect of your current offering do you most enjoy delivering to your customers? This is more about becoming a specialist as opposed to a generalist. It doesn’t mean you can’t offer other services however it is about building a reputation as the go-to person/business for the product or service you most enjoy delivering.
An example of niching down is you might be a trainer, delivering both, 1-2-1 sessions and group training, and your real passion lies in delivering sessions to large groups of people if you can build your business in such a way that you are delivering these group training courses more often.
This will mean you’ve effectively started to develop your niche but also structure your work in such a way that you are picking up the business you most enjoy! This is a basic example however thinking in this way means you can start to dig deep into what aspect of that task you enjoy.
So to expand this slightly, you want to deliver health and safety training and that is your real passion, however, you can also supply and carry out risk assessments and reports amongst other services.
Understanding that your real passion is in the delivery of the training means when it comes to marketing your business you can focus the branding on the people who need that training the most, allowing for your business to segment the industry to find your niche.
Evaluate your Business’s Niching Opportunities
The next question to ask is ‘Does this service/product solve a problem?’. Simply, is there a need for the product or service you want to specialise in? If I’m going to put my time, effort and money into making a chocolate fireguard, are there going to be people at the other end who think it’s a great idea, wonder why no one ever thought of it before and want to spend their money on it?
Niching down is about focusing your brand message whilst also streamline your services to gain respect and authority in that chosen niche. You need to understand if there is a market for your service or product and if there are any number of ways to do this. Get to know your target market really well, understand who is going to buy this product or service and make sure there is a need.
Check out how you can use Niching Down can help your business with our Business Coaching Services.
4 Reasons for Niching Down your Business
1.) Niching Down your Brand
Niching down your business means that the message you take to market is much clearer, as opposed to trying to market to everyone you can specifically market to the people most likely to buy your product in the language they will understand, in the place they are most likely to see it and with a message which is most likely to encourage them to buy.
This is called niching down your brand, so a practical example would be, if I am a personal trainer and the niche I want to create is helping new gym users to gain confidence, I can specifically target the gym’s new members with a message about building confidence and understanding how to use the kit in the gym. If my message shouts ‘if you want to build confidence’ then the people thinking ‘I want to build my confidence’ are far more likely to continue reading.
2.) Better Clarity of your Target Market
Niching down your branding will help you to think about the people who are currently using your product or service and really understand all of the things they have in common. What connects these people to each other and the service I am providing?
It’s ok to have more than one target market for your product! There’s likely to be any number of differentiating things from age to where they spend their time both physically and on social media, by getting really focused on your niche, you can ensure that the money spent on marketing gives the best possible chance of a good ROI.
If, in my marketing material, I can clearly speak to the people who will benefit from my service, the message will have a bigger impact, meaning, not only is that return on investment increasing, but I’m likely to need to spend less on the first place to attract the business I need.
3.) Niching Down Creates Stronger Supplier Relations
Niching down will also help with supplier connections and cost reductions in raw materials, as you won’t be offering as many services so that will mean fewer suppliers. Having fewer suppliers will massively improve the relationships you have with the ones you keep as you’ll be placing bigger orders and have more time to build a report with them. Therefore niching down your business will massively increase B2B relations and most likely lead to more opportunities and cost reductions.
4.) Niching Down Gives Business Expansions a Focus
Niching down and focusing on your business does not mean you are limiting your opportunities into new markets. It is about refining the core values and services of your business in order to make them as clear and efficient as possible so that you can create a big authority in that niche.
Once you have established your business in the original niche, you can then start to look for opportunities for growth into new niches. It is important when looking for a new niche to expand into, you focus on one which will strengthen the one you are already performing in, and most importantly will your branding and values fit this new niche? If you get all this right then niching down will not stop the expansion of the business, but it will refine it to make it more efficient and focused.
