One of the biggest mistakes a small business owner can make is to cast too wide a net when it comes to who they will serve and the products and services they offer. It might seem counter-intuitive to narrow your focus to make more sales, but when you have a small business it’s the best way to earn more money with less effort.
There is always someone out there who is able to charge less money. In that case, don’t compete on price. Instead, narrow your niche and compete on specialization. Show your market how special your product or service is compared to your nearest competition. Make sure that you stand out from the rest by not competing on their level but on yours.
Facts about niche markets:
Niche Markets Have Fewer Customers – This seems like an obvious statement but it should be stated again, because when you have fewer customers you need to differentiate in a new way. By choosing a narrow niche market, you’ll focus on quality or even quirkiness over price.
Niche Markets are Less Price Sensitive – Due to the fact that fewer businesses are willing to serve smaller markets, they are often less price sensitive due to lower competition for their business. So the customer is more impressed by how you are different than your price.
Market Expansion Means Creating New Products or Services – One issue with a narrow focus is that you’ll need to find new ways to make more sales. Usually, this will be in the form of new products and/or services created just for your niche, such as education, more personalized services, continuity programs and more.
Staying Successful Means Always Improving over Competitors – With a narrow focus you can really get to know not only your customers but also your competition, and continue to improve the value you offer your audience without lowering your price.
You’ll Need to Build Relationships with Customers – When dealing with a smaller niche, you want to bring your customers into your circle and make them part of your family. You want to get to know them very well and let them get to know you. Building relationships is an essential component of increasing sales within a niche market.
Narrowing Your Niche Enables You to Focus Your Talents – The more specialized you become, the more you can be seen as an expert by your audience and in truth the more of an actual expert you will become. You’ll become a lot freer to do the kind of work that you need to do to perfect your craft.
Narrowing Your Niche Gives You a Competitive Advantage – By working with a very small, focused, and narrow niche, you’ll have an advantage over other businesses owners who don’t understand the power of focus.
You’ll Get More Referrals and Recommendations – Due to having a smaller market your audience will become a lot like fans and cheerleaders, recommending and referring you to their friends and colleagues who are likely to also be members of your niche.
Finally, the way to narrow your niche market is to choose a market in which you already have experience, talent, connections and an understanding of their needs. This won’t reduce your need to study the market and research the market, but it will give you a good starting point from which to develop the research.