A niche is not a market segment. For example, if you’re in the financial services business and you say your niche is someone who has $500,000 in investable assets, you have no niche. What you have is a market segment. If instead you said that my niche is someone who is 55 years old and has worked in a particular industry at a particular group of companies, you now have a niche.
When you describe to others what your niche is they will immediately understand what you’re talking about. Some of the benefits you get from understanding and staying with a niche are:
You become an expert in your niche. If you work with the same group of people or Customer types on a regular basis you will become an expert on the needs and language of this group. This allows you to not only speak their language but also build rapport and trust quickly.
You can potentially become much more profitable. When you have a well-defined niche you find that your Customers have similar needs and wants. You can develop programs that fit for many in your niche and don’t have to re-invent the wheel every time you work with a Customer or Client. You will become more efficient and as a result will have a lower cost for servicing this Client group.
You can charge more money. Niches by their nature are very small groups of Customers out of a total pool. If you truly understand and can demonstrate you know your niche you can add much more value for a Customer than a generalist. If you can demonstrate that you can add more value often you can charge more money for your product or service.
You will have better Customer loyalty. When you develop and understand the niche you work in, you will find your Customers become more loyal. Since you are speaking their language and know how to build rapport and trust, competitors who are not experts in your niche will have a hard time breaking into your Customer base.
You will have more fun working in a niche. Since you’re an expert where your Customer and Clients look to you for expert advice about their problems you’ll have more fun. You’ll spend less time convincing potential Clients to do business with you and your present Clients will adopt more of your advice. Not having to always prove yourself can be a fun and liberating experience.
I really don’t understand why anyone wouldn’t want to develop and become a niche expert. As always, I’m curious as to your thoughts on niche management. Is this something you pay a lot of attention to in your company? Please contact me at Jpatrick@stage2planning.com to leave me your comments.
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