Here’s an interesting take on niche Marketing from Cliff Spyker of MKS Learning Centre in Calgary. He spoke at the CAPS conference with me over the weekend.
He says that a niche should be no larger than 100 people! (In a further conversation, he said that a niche can be even better if it is just 10 people!)
Let’s take a step back before I go into detail.
Many people who talk about niche marketing use the clever phrase, “the riches are in the niches.” They mean that specialists make more money than
generalists. Why? Because they understand the market better. Therefore the market pays them more because their information is much better. Makes sense.
Some people are saying that niches are bad because if your niche dies, so do you!
So what’s Cliff’s point of view?
Let’s say you start a deck building company. Well there’s lots of competition there. So why no specialize in $50,000 decks complete with jacuzzis, big screen
TVs and bars. Who would compete with you? No one. Would everyone looking for a deck know about you? Yes Perfect branding, Cliff!
And if you got 10 clients (let alone 100), would you have a handsome business? Sure would.
I think Cliff is on to something here. We are so worried about old marketing terms, like market share that we sometimes lose the focus in thinking in a
targeted fashion.
After the talk Cliff let me in on another secret — those 10 clients aren’t necessarily the home owner. They’d more likely be contractors who would buy your
service and sell it to their clients, the home owners! So your marketing is targeted as well. It is easier to market to the contractors in your area than it
is to market to the homeowners!
Now relate this to your business. What is your real message? Who are your real clients? Who can sell your message for you to the ultimate buyer more
effectively than you can?
What do you think? You can post responses to my blog:
http://www.prleads.blogspot.com
Save time
10 clients? Sounds to me like recipe for disaster. Perhaps that makes sense for some businesses which are better off dealing with a small number of customers, but I can’t think of any examples of highly successful companies that have limited themselves to just 10 clients.
The point, I believe, is that less is often more. Rather than trying to sell to everyone who might buy, focus just one those who actually want what you have to offer and then within that group focus even more by spending as much of your time as possible selling to those who actually need you.
Far too many businesses spend 80 percent of their time chasing after 20 percent of their revenues and profits. If they took a more passive approach to the 20 percent, they’d likely double the amount of business they’re doing with the 80 percent. So what if you lose half of your business with the 10 percent if you can double the amount of business you’re doing with the 80 percent?
Steven Rothberg
President and Founder
CollegeRecruiter.com job board
http://www.CollegeRecruiter.com
Thanks for your kind words Dan.
Your comments are completely consistent with our marketing philosophy. However I need to clarify a couple of additional points.
First our focus is completely on growth or expansion markets. Our concerns are not existing customer bases or markets, we leave that to the firms themselves to maximize. Our interest is how to grow or start a new market.
We advocate the Law of Ten for Micro Market Segments with respect to growth. The Law of Ten is that a start up or growth (target, niche) market, call it what you desire, we call it a Micro Market Segment to force marketers to think smaller, should never have more than Ten Times the number of employees in your organization.
As such take the total number of employees in your firm and place a Zero behind that number and you have the maximum size of a single expansion market.
For example in my deck building company if I have three full-time equivalent employees than an expansion Micro Market Segment should identify a maximum of thirty high-end estate home builders for me to contact. If the typical ten-three-one sales process works then I would generate three new clients from this one expansion market. More then enough work.
Second and equally as important, this is just one Micro Market Segment. Not all of them. We recommend applying all your expansion marketing resources to one Micro Market Segment to get maximum return. When the sales process for the thirty potential customers is finalized, move on to the next micro market segment.
It is all about Physics. Apply your finite marketing resources to the smallest possible area to achieve maximum results.
Cliff Spyker
MKS Learning Centre
Calgary Alberta
spyker@mkslearn.com
My niche is teaching people how to self-treat for repetitive strain injuries such as carpal tunnel syndrome and low back pain. This isn’t a small group, but I become a niche marketer because I’m teaching people how to take care of the situation themselves, rather than coming to my office.
Thinking about this topic has made me realize that I’ve been going about this the wrong way. Instead of looking for a thousand people who are searching for an answer to their pain, I’m better off looking for 10 companies that employ 100 people. Then I can deal with just one person, and make it a win/win situation.
The company wins by keeping employees off the Worker’s Compensation list; the employee wins because they aren’t in pain so they can maintain their job; and we win by working closely with a smaller group of people rather then trying to address the larger population.
I think it’s a wonderful topic, and one that I’m going to put into practice.
Julie Donnelly
Carpal Tunnel Treatment Center
http://www.aboutcts.com