In the wild and unpredictable world of entrepreneurship, being a microbusiness owner can sometimes feel like being caught between a rock and a hard place when it comes to defining your target audience.
Niching down, which basically means narrowing your focus to serve a specific audience, sounds like a great idea on paper, but it's also one of those things that can make you break out in a cold sweat.
I recall the extraordinary pain of doing this myself for the first time, having qualified as a coach. I felt I was going around in circles, and it eventually came to me on a dog walk. I have revised and tweaked my niche several times since then. It gets a little easier each time.
Many business owners I speak to believe they have niched when they haven’t at all. Others don’t feel like they need to niche, they like being generalists. Ultimately there is a lot of resistance to niching, so in this blog I explore why many microbusiness owners resist the whole niching thing, and why - if this is you - you might want to think twice about it.
Why microbusiness owners are playing hard to get with niching
1. FOMO is real. That old chestnut: Fear Of Missing Out. It's like you're at an all-you-can-eat buffet, and niching feels like picking just one dish. Are you resisting niching because you're worried that you'll miss out on a boatload of potential customers?
2. Lack of clarity: Let's face it, defining your niche can be like trying to solve a Rubik's Cube blindfolded. (I understand this is possible, but it’s incredibly difficult!) Are you finding it tough to figure out what makes you unique and how to stand out in a crowd?
3. Quick returns and low hanging fruit: When you work for yourself paying the bills is a priority and making money from any client can feel more important than a longer-term strategy.
4. Flexibility rules: Did you start working for yourself because you wanted greater flexibility? And are you mindful of advice that says you need to be able to pivot and quickly adapt to changing market conditions? I totally get it, you want to keep your options open. Niching can feel like putting you and your business in a small box.
The benefits of embracing niching
1. Spot-on marketing: When you niche down, your marketing efforts become like a laser beam. You're not throwing your message into the void and hoping it sticks somewhere; you're hitting your target audience dead on.
For me, this has the biggest benefits of saving my precious time and energy and this focus helps me make very clear decisions about what marketing will be effective and what won’t.
Niche marketing leads to 60% more engagement compared to generic marketing efforts. (Source: HubSpot)
The Content Marketing Institute's research indicates that 90% of consumers find custom content useful, and 78% believe that organisations providing custom content are interested in building good relationships with them.
2. You become the expert: By narrowing your focus, you can become the go-to expert in your niche. People love experts. They trust them, they respect them. And they're willing to pay more for their knowledge or products.
According to the Edelman Trust Barometer, expertise is one of the key factors that influence trust in a business or individual among your target audience.
3. Increased customer loyalty: Niche markets often breed fierce customer loyalty. When folks realise that your business caters specifically to their needs and offers tailored solutions, they're more likely to stick around, buy more from you and become vocal advocates for your brand.
increasing customer retention rates by as little as 5% can boost profits by 25% to 95%. (Source: Bain & Company)
4. Reduced competition: Niching can reduce your direct competition by making your business less interchangeable with others in the market. With so many microbusinesses providing any number of services and products, if you aren’t differentiating yourself, how do your potential customers begin to choose you from the rest on anything other than price? And this assumes they have the time to do the research to find you among all the others.
The Harvard Business Review reports that niche businesses are often more competitive in the long-term because they can develop specialised expertise, products, or services that are difficult for broader competitors to copy.
Not yet convinced? The consequences of not niching
1. Marketing money pit: I talked about the benefits of specific marketing earlier, but without getting specific with your messaging you’re wasting resources trying to reach a broad audience that probably doesn't care about what you're offering. Think about the last time you paid attention to an advert or a post that wasn’t specifically talking to you.
Ultimately you are throwing money down the drain. And if you think you’re not spending any money, your time is money!
2. Diluting your brand: You had fun designing your brand. You think it looks great. You had good feedback from friends and family. But without a niche nobody knows what your brand stands for. Confused customers are far less likely to notice you, let alone spend money with you.
3. The price race: When you don't niche, you’re far more likely to compete on price rather than the value you or your product offer. This can lead to a race to the bottom, where your profit margins shrink, and your business struggles to stay afloat.
4. Burnout and over-extension: Trying to be all things to all people is a one-way ticket to burning out. If you find yourself chasing after different markets and trying to meet varied demands, it’ll be exhausting and it’s unsustainable.
So, what's the bottom line?
While it might feel like niching is limiting your options, it's actually the key to hitting the bullseye and unlocking your full business potential. And it doesn’t stop you working with clients who approach you who aren’t in your niche. But by not niching you are leaving money on the table, left right and centre.
Niching brings big benefits: it lets you focus your efforts, build trust and loyalty, and avoid the pitfalls of generic marketing and price wars. Don't be afraid to take the plunge and discover the magic that niching can bring to your business. It has the superpower to make your brand shine in a crowded marketplace.
You have everything to gain by giving this niching lark a go; so what have you got to lose?
Want to know more about how to niche? Let’s have a conversation.