How important is a niche market to you?
4th November, 20140 Comments
Written by: Hoffman & Cohen
In simple words, a niche market is a specific group of individuals and businesses that could benefit the most from your product or services and could afford to pay for it. Choosing the niche market is however not as straight forward and could require considerable experience and understanding of your customers in order to decide the right niche for your business.
Some may argue that by only focusing on the niche market, one would be limiting their exposure of targeting a wider market. It may be true but is it better to diversify your resources on a wider market or use all your resources to target a small number of well chosen segments?
You can either choose to spend £1 per 10,000 of a wider audience or £10 per 1000 of a well chosen segment. In the end, it will cost you the same £10,000. Because you are targeting smaller numbers, the same amount of money you were previously using to acquire customers is spread across a smaller number, and therefore you have more to spend on each prospect than you would if the market was bigger.
This leads to a thought that how would it be better to target less than more? Focusing on a niche market you limit the wastage of your resources and in return could spend time on quality prospects that could result in a higher return. Is it better to have 10% of £1000 (£100) or 50% of £500 (£250)?
I could use an example of the accountancy industry. Lets say you are a small building company looking for an accountant. You were referred to two accountant’s website, one that says they provide the usual accountancy services and one that says they only work with builders. Which one do you think you would choose?
Choosing your business is a no brainer from a customer’s point of view, as you are one of few who are experts in a specific industry. If we want a burger, would we go to McDonalds or a Lebanese restaurant?
A decent pitch to your niche market could result in an average outcome. A great pitch to a wider market could result in a poor outcome.
What’s your pitch?
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