“Niche down” is advice a lot of business consultants give their clients as a way to find more clients and build a solid business. It’s also advice that scares a lot of business owners.
By definition, to “niche” is to identify a specialized area to focus on–a very specific segment of their industry. This smaller segment begs the feeling of scarcity within the business owner. Smaller pool of clients to sell to means fewer sales and a business that’s not scalable. However, this simply is not true.
What most business owners don’t realize is that niching down is actually a way to grow your business, to grow into the go-to person in a specific area and to eventually raise your prices.
Have a stand-out lemonade stand
An example I love to use is the lemonade stand. You’ve seen those lemonade stands on the side of the road in your neighborhood: Ambitious kids looking to make a few dollars on a warm weekend. The thing is, anyone can start a lemonade stand on the block, making for competition when the weather is hot.
Not only that, but it’s difficult to target your customer because so many people enjoy lemonade. It’s nearly impossible to stand out among all the other lemonade stands in the neighborhood. Unless you find your niche.
For example, suppose most of the lemonade stands are selling the drink from concentrate or from a powdered pouch because it’s inexpensive and easy. You recognize that while this may be cost effective, it isn’t the healthiest option.
If you want to stand out, sell fresh-squeezed lemonade, perhaps with a sprig of fresh mint. Sure, your price goes up, but your audience shifts to people who are willing to pay more for a healthier product. Now those runners and walkers and health-conscious parents who stroll by your stand are more likely to stop and buy. And all the other potential customers? They’re no longer your audience, and that’s okay.
As the fresh and healthy lemonade stand, you’re the stand-out and people will remember you. They’ll pay more and they’ll go out of their way to buy from you.
Create your niche, attract customers
The same goes for your business. The more niche you become, the more appealing you are to your potential customers. It’s no longer a guessing game with your marketing efforts, putting your message out there to anyone who might be remotely interested (or not) in what you’re selling.
Instead, when you niche down, you’re honing in to meet the needs of those who don’t currently have their needs met. In the lemonade stand example, those health-conscious buyers weren’t having their needs met until you niched down and offered what they wanted.
You might be selling the same general thing as your competition (graphic design, coaching services, copywriting, administrative work, etc.) but when you niche down to offer a specific type of service to a targeted audience, you become better known among that audience. And that is where the sales are!