Last Updated on May 7, 2023 by Dave Schoenbeck
Most businesses reach a point where they must either narrow their offerings to a specific niche or become universal in their appeal and serve a broader audience. Many companies love the idea of casting a wide net, hoping this will be more profitable. However, the real benefit lies in owning a niche market.
The Advantages of Niche Marketing
In the book Positioning: The Battle for Your Mind, authors Al Ries and Jack Trout explain the “positioning theory.” The idea is that a customer can’t hold two opposing views of you at once. For example, if your prices are low, they won’t believe you can also be good. Likewise, they won’t think you understand their local community if you have locations everywhere.
This fact means that instead of trying to be everything, owning a niche market and choosing a smaller selection of selling points to emphasize to your customers is more important. When you try to do too much, there’s no guarantee that the message they will come away with is what you intended. If you try to serve everyone, you sacrifice what makes you unique.
It might seem counterintuitive to own a niche market rather than target as many people as possible, but it’s ultimately worth it. Here are some reasons to opt for a niche market strategy:
- Trust. Think about it: if you need brain surgery, will you go to a general practitioner or a neurosurgeon? One of the advantages of operating in a niche market is that customers trust a business with a proven track record in a specific area. As they say, a jack of all trades is a master of none.
- Loyalty. Many customers enjoy supporting a smaller, niche business rather than their large-scale competitors. For example, Peet’s Coffee can’t compete with Starbucks globally. Nevertheless, by knowing their target audience and consistently delivering high-quality, small-batch coffee, they’ve retained a dedicated fanbase that keeps returning. Starbucks can’t provide the same experience.
- Resources. There’s no point wasting time on targeting people who aren’t going to purchase your product. Depending on your marketing strategy, it can also be a significant waste of money. The more specific your ad campaigns are, the more likely they are to convert. Just because someone visits your website doesn’t mean they will buy.
The good news is if you are considering casting a wide net, chances are your competitors are, too. They might take the bait, but you now know better. If you own a niche market, you’ll be in a much better position to develop a solid reputation and a loyal customer base.
If you need to decide whether your business should serve a universal audience or if you should own a niche market, fill out my contact form. I can tell you real-life stories about the shuttered businesses that tried to be everything to everyone.
Coach Dave
- A Professional Definition of Executive Coaching and Why It’s Critical - December 19, 2024
- Inventory Management Concepts and Techniques for Small Businesses - December 12, 2024
- How to Create and Employ Positive Affirmations for Entrepreneurs - December 5, 2024
