Rather than try to be everything to everyone, small businesses are having more success focusing on niche markets. Richard Conway defines the latest strategies behind this approach.
In an age of increased saturation and crowded, competitive markets, we’re seeing the specific focus, or specialisation, of businesses getting narrower and narrower.
In a bid to achieve penetration and set themselves apart, companies are investing more time and energy into truly uncovering what makes them special and different, taking their own niche position in – and owning a focused and targetable part of – the market.
As a result, businesses are seeing the benefit of being the best option for a smaller section of buyers, as opposed to trying to be ‘everything to everyone’.
As specialists, businesses are providing more tightly defined products and services that focus on a specific client group’s needs – needs that cannot be addressed in such detail by other, more mainstream, providers.
This has obvious ramifications for research and development, innovation investment and other areas of the business but, as we work to ‘stick to our knitting’, what are the specific things we need to remember to focus on, from a marketing perspective?
We know that marketing is all about targeting, and this is where niche businesses excel. However, the smaller your market, the better you need to understand your customers, so it’s vital to define your target market segment carefully. Consider not only the basics (age range, income brackets and gender) of your target market, but also the more granular aspects your customers might have. What do they value? And, what are their unique challenges or pain points (plus how does your product or service take these away for them?).
Be clear on your unique selling proposition (USP), and what makes you special and different. It’s vital to know how your product or service fulfils a need not currently being met by another company in your industry.
Once you have defined your specific target market, you can usually market to it relatively cost-effectively, as you can target your spend towards niche channels that have considerably lower (marketing) rates than those that reach broader audiences.
Rethink traditional methods
Niche marketing is not the same as traditional marketing done on a smaller scale. Instead, you likely need to consider entirely different ways to spread the word about your offering.
Rather than merely ticking the boxes of each channel that you feel you need to have as part of your marketing mix, assess the strengths of each and every one of them in relation to your specific market.
As an example, social media marketing has been successful for a number of small businesses operating in niche markets. However, the granularity of targeting that can be achieved on the likes of Facebook and Twitter may not necessarily be cost-effective for your specific business, as more social platforms become aware of exactly how valuable this type of targeting is. If this is the case, paid search – or some other channel – may be a more viable option.
The point is that it’s important to test and measure the return you’re getting on your investment across each of the channels you use, and adjust accordingly.
Invest in influencer marketing
No doubt you’ve started to notice more and more instances of influencer marketing, but have you considered how this trending channel can work for your niche? Influencer marketing takes place in that grey area between a passing product mention and an official testimonial. It enables you to get targeted exposure to the right kind of consumer, by leveraging a key person’s audience for your brand.
By its very nature, influencer marketing is niche marketing, because a key person or social media influencer holds sway – or influence – with a tightly defined group of people.
Even better, the specific group of people that they are talking to are actively following and engaging.
Not only that, people trust people ahead of ads. Recent research by Ogilvy and Google found that 74 percent of consumers identify word-of-mouth as a key influencer in their purchasing decisions. BrightLocal discovered that 88 percent of people trust online reviews by other consumers as much as they trust recommendations from personal contacts.
Whether on social media platforms or people’s own sites, influencer marketing is relatively inexpensive in New Zealand, especially when you consider cost per engagement. The number of people who view photos or watch videos online means that you can achieve a lot of views for moderate spend. The industry standard tends to be 0.1 times each engagement (so $100 per 1000 likes). And, if you consider how much time we spend online, and the kind of things we tend to do there, influencer marketing is a means to target people where they are, which just makes sense.
Talk to your market
I cannot stress enough how important it is to genuinely listen to your customers. As well as testing and measuring each of your marketing channels, make sure you engage regularly with your customers for their insights into your business. Lots of marketers shy away from the numbers, but engaging with your customers – and proactively asking what they think – can provide hugely valuable insights into how you’re tracking, and point out areas that you can make small improvements for big results.
While your niche market might seem like a relatively homogenous group, they will all have their unique perspectives and ideas. Measure your Net Promotor Score (NPS) regularly and use this to refine your offering, or engage with specialised customer feedback tools to keep your focus outside of your business, not just within.
Richard Conway is the founder and CEO of Pure SEO.