If you’re feeling overwhelmed trying to market your product or business in an oversaturated industry, you’re not alone. Trying to stand out amongst a crowd of competitors marketing to large, often over-generalized demographics is not an easy feat. For example, if you’re trying to sell ERP to “small-to-medium businesses located in North America” then you will have to cast an extremely wide marketing net to cover your pool of potential customers.
Instead, you might consider casting a much smaller net to a hyper-specified audience. This tactic is called niche marketing (or vertical marketing).Niche Marketing is using all marketing efforts towards one defined segment.Trying to reach fewer people may seem counterintuitive, but in marketing, quality is much more valuable than quantity. Niche marketing works best when you have a high number of potential customers, but few resources to reach them.
How Does Niche Marketing Work?
Let’s walk through an example of niche marketing.
CRM Inc. is trying to grow their sales and they’re having trouble generating good leads and converting those leads to sales. In the past, they’ve targeted any company with 1-500 employees that sells a good or service. They mostly use email, Google ads, and LinkedIn to market and sell their product.
Lately, a lot of the customers on the larger end of their demographic have been leaving for a competing CRM system. Now, they want to try niche marketing to fine-tune their prime potential customer base.
Analysis. The CRM Inc. sales and marketing team works together to perform an analysis of their past and current customer base, and their competition. A general SWOT (strengths, weaknesses, opportunities, threats) analysis provides them with in-depth information on their successes and room for growth, as well as who else in the industry might be working towards the same goals.
In their analysis, they want to figure out which of their customers have the most success with their product, which customers stay with them the longest, and what type(s) of leads fall through the most.
Focus Group. Out of their current customer base, they identify 10-15 customers who have been with them the longest and grown the most. Their marketing team reaches out to these customers asking if they’d be interested in participating in a short focus group, rewarding participants with a free month of support. In this focus group, they ask the customers about their experience with CRM Inc.; how did they find this product? What are the strengths and weaknesses of the product? What is your age, education level, personal hobbies, and so on?
Results. Through their research, CRM Inc. identifies their core group of successful and loyal customers as small non-profit organizations with 5-50 employees. Most of these organizations found CRM Inc. through referrals or LinkedIn connections. Many of them fall into the age of 40-55 and enjoy fine arts, sports, and outdoor activities. Their favorite features of the CRM system are the integrated and automated email features, user-friendly interface, and training tutorial videos.
Now, what to do with this information?
Reposition. CRM Inc. decides it is in their best interest to turn to niche marketing; they’ll reposition themselves as a small non-profit CRM system. By repositioning, they may have to do an overhaul of their marketing and sales content which will not be fast or cheap but will be worth it for the end results. They’ll begin to use different keywords, new targeted customer profiles, and advertise in more focused areas that will reach their target audience at a higher rate (perhaps nonprofit industry publications, event sponsorships, and so on).
Repositioning allows them to spend their money and time where it will have the most impact and generate high-quality leads. Their sales and marketing teams will need to work closely during this transition time to ensure there is no miscommunication on the niche target. Doing so will help the company build a strong foundation for future strategies.
The Fine Print
Niche marketing may not work for every business, but it can be extremely helpful if your company is able to create a unique brand and solution that fills a void in your industry. Differentiating yourself from competitors is the key way to stay afloat in a crowded pool.
While this was a very high-level example, there are many different ways to establish your niche through market research so you know what methods make the most sense for your industry and company. The important part is to dive deep into that research and establish the customer profiles and buyer personas to target as a niche.
If your company is ready to explore niche marketing, The Partner Marketing Group can help you through your journey. Contact us today to get started!