“The Riches are in the Niches.”
Is this advice you’ve heard before?
If you haven’t, it basically means that cornering a very specific portion of the market is what will lead to better success and profits in your business.
It rhymes so it has to be true, right? *wink*
In this new blog series, I will be examining some of the most quoted and doled out business and marketing advice out there, and busting (or supporting) these long-standing ‘truths’.
Welcome to volume one, to niche or not to niche. Let’s dig in!
So I’m going to tell you right now, this topic is quite controversial. There seem to be sound arguments for both sides, either honing in on a niche or going more broad.
At first blush, limiting yourself to just one target audience could seem risky. Afterall, you’re in business to ultimately make a profit and be able to sustain yourself financially. If you’re only focusing on one demographic, doesn’t that equal less potential customers to sell to?
Some argue that while the market is smaller, it’s easier to make a sale within a niche due to there being fewer competitors. In going into a larger market, you are having to fight for those sales as many other businesses are offering their products and services to the same audience you are.
Sure, this makes sense when you think about it, but there are those who oppose this view. Neil Patel, entrepreneur and online marketing expert argues that it takes the same amount of effort to create and build a business in a niche market as one in the mass market (Neilpatel.com). He adds that when marketing, although finding SEO keywords will be easier with a niche, the keyword volume (how much an audience will search the keyword) will not be high. Furthermore, he explains that having a smaller target audience will affect revenue growth, making it harder to scale your business.
While the points that Patel makes are reasonable and can certainly apply to a niche business, there are advantages that may override these unsettling possibilities. Meredith Hart of HubSpot lists some of the benefits of having a niche business:
Less to Compete With. As stated earlier, when you are trying to appeal to the masses, you are also competing with larger and more recognized brands that may already have a significant portion of consumers in their grasp. A limited audience means fewer competitors to contend with.
Cost-Effective Marketing. By catering exclusively to your target audience, you can focus on marketing to those who match your brand values and since it’s a smaller portion of the population, you are saving money on marketing costs.
Increase in Brand Loyalty. Building brand loyalty is an incredibly effective marketing strategy that I strongly recommend giving priority to. Having a niche allows you to develop a more personal and profound relationship with your audience. They feel understood and supported in solving their problem.
Another important advantage mentioned by Adobe Communications is credibility.
Since you are specializing in one particular area, you start to acquire the knowledge needed to become an expert in your niche. Achieving the reputation of an expert in your field will have your target audience flocking to you.
As Karen Hunter Moraghan, President of Hunter Public Relations told Henry DeVries of Forbes—
“When you become an authority in a niche, you don’t chase business, it chases you.” (DeVries,2023)
Added bonus? Those with expertise in a niche tend to get paid more for their work (Lenegan, 2021).
As a compromise, Forbes Councils member Adam Kipnes argues for both sides but with one caveat— let the niche choose you.
He suggests starting broad then seeing what client trends start to form and go from there. This prevents you from choosing the wrong niche for your business early on. He says the error is made when an entrepreneur picks the niche they believe will want their services, but really, they're just speculating with no definitive proof (Kipnes, 2018). Let your incoming clientele show you what your niche is.
Kipnes lays out 3 steps to help your niche find you:
Clearly define what your clients can expect from your products or services. What will be the end result when someone chooses you to be their service provider?
Obtain clients. Market, network, put yourself out there and get clientele.
Evaluate your consumer. Kipnes suggests surveying your customers and asking them more about themselves and why they choose you. This will give hints to the direction you should take.
So, have we busted the myth of “Riches are in the Niches”?
I would conclude that this piece of advice is solid with a few precautions to consider. Going with the advice to let your niche find you seems like the safest bet as taking this approach has market research behind it. One thing I do advise is to make sure that the niche you land on has a wide enough audience to ensure your business is sustainable in the long term.