3 Ways to Niche (Beyond an Industry)
Weird businesses show up and stand out in a noisy, digital world. In business jargon, that means you should pick a niche to succeed. You can make more money while servicing fewer clients.
One question arose during the talk, however, that merits further explanation: What happens if you can’t work with more than one business within a niche?
For example, if you work with a business in the pharmaceutical industry, and they require that you don’t work with any other pharmaceutical companies, how can you still own your niche?
There is more than one way to create a niche.
As Tim Williams notes in Positioning for Professionals, you can stand out based on:
- Who you work with (industry niche)
- What you do (service niche)
- How you do your work (methodology niche)
Your business should use at least two, but ideally all three, positioning techniques when describing yourself to clients.
1. Industry Niche
The most common way to stand out is by choosing a vertical, what I call an industry niche.
We started working with car dealers almost five years ago, but it took us until two years ago to finally call ourselves an automotive marketing agency. In retrospect, we should have done it sooner.
Depending on how you define “agency,” there are more than 120,000 agencies in the U.S. and over a half a million worldwide. In a previous age, a business stood out if it was the best at what it did in its community. Today, however, we are not competing just within our own zip code. We’re competing with everyone.
Choose an industry so that you know exactly what your clients need and what works in their industry.
2. Service Niche
The second way to stand out is based on the services your business provides. If you’re an agency like us, your niche might be a video marketing, Facebook ads, or PR.
Brick and mortar businesses do the same. If you’re a bookstore, you might specialize in comic books, kids books, or used and rare books. Bookstores that try to carry everything for everyone — like Borders — are going extinct.
At 9 Clouds, we pride ourselves in bringing inbound marketing to the automotive world. On its own, inbound marketing is not very specific. More than 18,000 inbound marketing agencies were in Boston with us last week. Combining inbound marketing in the automotive industry, however, brings that number to fewer than a dozen.
As you dig deeper into a service niche, you are more easily found on Google and can tout better case studies and expertise.
A company that has a strong brand and expertise, referred to as a high equity company, can charge 20-30% more for its services than a low equity company that does the same thing (Walshe and Fearn, cited in Williams).
Combine that price increase with the fact that a 5% bump in price equals a 50% increase in profit, and you suddenly have financial motivation to find a niche.
3. Methodology Niche
The way you work separates you from the crowd.
For businesses that can only work with one client in an industry, the methodology is a great way to be weird.
At 9 Clouds, we use data-driven marketing strategy delivered with a high-touch approach. We are great at testing and crunching numbers and are a boutique agency that is trying to provide unmatched service to a select few clients.
Other businesses take an even more explicit approach — such as the One Hour Agency, which promises to generate great ideas in one hour.
The knee-jerk reaction for businesses is to retreat to meaningless catchphrases. Fast service and one-stop shopping are what people expect.
What methods do you use to create unique work? That is your differentiation.
The Trifecta of Weird
The more specific your business is, the better you do. This doesn’t mean you have to work within one industry. Some businesses do not have the luxury of an industry niche.
Everyone, however, should position themselves based on services and/or methodology.
Using at least two (ideally all three) positioning techniques is how your business stands out.
Once you have made the decision to choose a niche, follow the model of mastery to become the leader in your niche. Your business will find new revenue streams, retain better clients, and differentiate itself from the competition.
Admit it. We’re all a little weird. Embrace what makes your business different. You’ll have more fun and probably make more money, too.