There are a great many professionals these days who are recommending that you find a niche, become specialized in that niche, and sit back and allow the wealth to pour in. The marketplace has been flooded recently with programs and courses, and even consultants advising businesses to take this approach, because it is sure to result in big success for your company.
While it’s undoubtedly true that some businesses have achieved success using this approach, the truth is that it’s definitely not any kind of guarantee for success. Here are some reasons why you should avoid limiting your company to a niche market, especially in the beginning, and putting it in the category of a niche business.
Your company gets boxed in
Especially for a company that is just starting out, there is no real way to know exactly what you hope to achieve, even a few years down the line. By limiting yourself to a niche market before you even really get going, you will be boxing your company in, and stifling some very worthwhile activities like experimentation and testing. If you’re focused in on a very specific clientele right from the beginning, chances are you won’t get around to expanding to a larger audience.
You might also find after you get going that you don’t really like appealing to this very narrow market which you’ve carved out for yourself. The bad thing is that by this time, you will already have invested a considerable amount of resources in marketing to this very small segment of your audience. If you’re going to become involved in a niche market, it’s much better to narrow your target audience as time goes by, rather than starting out with a very small audience segment.
You lose out on interesting ideas
When you limit your focus to a single very narrow niche, you tend to exclude all other interesting things that are happening in your overall industry. This can easily prevent you from considering any kind of ideas that are new and innovative in some way, and which might have a tremendous impact on your business. On the other hand, when you have a broader perspective, you’ll be much more open to cross-pollination of strategies and ideas from related industries which might be helpful to you. This can be extremely useful in growing your business, or in helping it to become better at what it already does.
Creativity is stifled
Many times when a company defines its narrow niche too early in its existence, it can cause all further creativity to become stifled. When you’re only working with a very narrow population segment, it becomes very easy to fall into the trap of repeating your process endlessly, rather than being open to creative ideas. By addressing new problems, and finding new solutions for those problems, you keep your creative juices flowing, and that will invariably reflect well on your business. When you have tunnel vision which allows you to see only your niche business, it tends to shut down that creativity, and it allows you to see only what matters to the niche itself.
Limiting your ideal client
When you’re first starting out in business, it’s probably not a good idea to have a restrictive and rigid concept of what your ideal client should be. Until you’ve actually done some work and you’ve actually been involved with the business for a while, you won’t really know the kinds of problems which have to be solved, and the types of people that you may want to be involved with.
When you do get good results by working with some clients in a specific industry, it increases the likelihood that other businesses in that same industry will take note and will want to connect with you. They may be referred by one of your clients, or they may notice the work on your website, and realize that you have a good understanding of their business. As you accumulate a solid group of clients, you can begin to identify what makes the ideal client for your business, and at that time, you may want to zero in on those specific clients.
Sharing your viewpoint
It is probably not the best approach to attract new clients by pigeonholing yourself into a particular niche. On the other hand, you just can’t leave it up in the air, and hope that clients will find you. A nice compromise is to begin by sharing your viewpoint with potential clients, and finding out who might share some of those same views. When you find clients who have similar views to your own, it will help to attract customers, because they will be interested in your thinking approach. This is much preferable to limiting yourself, and boxing yourself in to a single identifiable area that far fewer numbers will be interested in.
Focusing in on behavior
Many businessmen make the mistake of attaching too much significance to demographics, and too little significance to identifying client behaviors. After you have done a fairly good job of identifying your ideal customer, that is the time where you can start to weed out those individuals who are less likely to purchase from you, so that you’re left with more likely buyers. It’s worth your while to do some research on typical customer behaviors of those individuals likely to purchase your products, because that will help you to craft an appropriate marketing campaign which appeals to these individuals.
Businessmen who are focused in on a niche market generally overlook this aspect of marketing, and are far more concerned with the demographics of their potential customers. By taking this approach, and weeding out those individuals who are unlikely to buy based on their previous customer behaviors, you’ll end up with a solid group for your real target audience.
This is a more organic way of arriving at those customers whom you are genuinely trying to attract and appeal to, rather than establishing an artificial niche which may or may not include a number of solid buyers. When you begin your business approach the other way around, by identifying your niche first, you will be ignoring one of the most essential aspects of marketing, which is to identify and appeal to customer behaviors.