Can You Niche Yourself Out of Existence?

It happened again. Someone at a recent seminar insisted that carving out a niche was bad for business. I was speaking to a group of entrepreneurs about building a personal brand. Not surprisingly, they quickly understood the value of personal branding. In fact, they were pumped. But one of them – a self-admitted “engineer who just never got marketing” became quite agitated when the discussion came round to the idea of focusing on a niche. He shared this story with great delight:

“Yeah, well, I know a business owner who decided he was going to create a niche market. He decided he was only going to do custom work for really rich people. All was great for the first few years – he made lots of money. Then his business dried up. You see – he’d already sold his stuff to all the rich people in the area. If he hadn’t created a niche, he’d have more customers to sell to, and would still be in business today.”

Hmmm…how many different pieces of flawed logic can you pick out? But don’t judge too quickly – it’s not just entrepreneurs who have a difficult time with the concept of niching. I’ll bet you can easily rhyme off a couple of names of big companies who despite their size and resources don’t get it or are afraid to do it. No matter where you are on the spectrum, four key reminders jump out from his anecdote (regardless of whether the story is 100% accurate).

Ensure your niche is viable and stays that way. Are there are enough prospects who want your type of product or service? Do they value what you specifically offer vs. what your competitors offer? Are they willing to cough up what you charge? Will you to earn the level of profit you want? Which social, economic, political, or technology trends might influence your business – and how will you stay ahead of the curve?
Listen carefully to existing customers. How happy are they with your product or service? Why do they buy from you? Are they recommending you to others? Why or why not?
Increase “share of wallet” with existing customers rather than constantly trying to seduce new customers. What other wants do your customers have and how can you help them fulfill those desires (whether they’re mental, emotional, physical, or spiritual)? Can you offer new products or services? Can you build a strategic partnership with a company who can round out your offering to provide more benefit?
Deliver the right message at the right time to the right audience. Are you communicating with your audience using the right vehicles or media? Is your message compelling and relevant for where they are in the sales cycle?

By the end of the discussion, my friend did recant on his assertion that it was the niche marketing that caused the demise of the carpenter’s business. There’s hope yet.