The Riches are in the Niches: A Guide to Increasing Your Profit by Refining Your Target Audience

INTRODUCTION: What You’ll Gain From This Guide

Even though it feels counter-intuitive to intentionally narrow down the number of people you’re selling to, clearly and precisely defining your target audience is the best way to:

·        Make your offer irresistible

·        Spend less on marketing

·        Make your marketing spend work harder

·        Keep your pipeline full

·        Work smarter not harder at lead gen

·        Command a higher price

·        Make more money

This guide will help you understand why you win when you narrow down and will give you step-by-step instructions on how to do it.

Always remember...

Why niching feels weird (but shouldn’t)

First, let’s acknowledge that narrowing down your target market (the people you market to), or deciding you’ll market to a niche (a specialized or specific target market), feels weird to begin with. Common sense would seem to say that if you want to make as much revenue as possible, you need as many customers as possible – so it just seems like you’d want to avoid narrowing out a ton of people who could be your customers. I get it.

Here’s the thing to remember: You’re not narrowing them out.

Marketing to a specific audience does not preclude you from serving or selling to people beyond that niche. You are still allowed to serve other clients or sell to other customers, should the opportunity arise. You just aren’t directing your marketing messages at them. Having a niche or a specific target market simply means that, for marketing purposes, you narrowed down the group of prospects you’re actively messaging to.

If you’re in growth mode, you may need to take on any client you can get – and that’s cool. You’ve got bills to pay! You can still start the work of establishing your expertise and building a lead pipeline within your target market. It will actually get you more business, more quickly, if you’re able to concentrate your messaging and your efforts on a narrower swath of the universe. And having a specifically defined target to whom your marketing will help you keep your marketing efforts manageable while you’re building.

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Benefits of Being More targeted In Your Marketing

Need to know the “why” before you tackle the “how?” Following are a whole bunch of reasons why you’ll benefit from having a well-defined target market, or a niche:

Targeted messaging is more likely to get attention

The more precisely and unambiguously you can tailor a message to a specific audience, the more effective it is.

Think about yourself being on the receiving end of a marketing message. Whether it’s a print ad, a sponsored social post, a streaming audio ad, product packaging, or wherever – if you read/hear something that just seems like it’s speaking directly to you, you can’t help but pay attention, am-I-right? It’s not just us. It’s most people:

• 90% of consumers in the US find the idea of personalization appealing (Statista)

• 80% of consumers are more likely to buy from a company that provides a tailored experience (Slideshare)

• 90% of consumers are happy to share their data to receive exclusive discounts on products they’re interested in (SmartInsights)

There are million stats you could find to illustrate the point that the more personalized you can make your messaging feel, the more people will like and respond to it. (But no one wants to read a million, so I gave you three.)

Narrowing your target is the best (and most possible) use of your resources

Chances are, you don’t have unlimited time, money, or resources. Considering most consumers or potential clients will have to see your marketing message multiple times before it sinks in or hits them at the exact right time they can act on it, it would benefit you to concentrate your efforts so you’re getting in front of a smaller group more often and in more places.

Think of it as trying to boil the ocean in your kitchen. Could you do it? No. But do you and your kitchen have the resources to boil a few cups of it? Absolutely!

Narrowing down the size of the audience you’re trying to reach enables you to direct a higher concentration of effort to your most valuable market, and then keep the heat on them until it’s the right time to buy.

It’s only possible to find someone if you know who you’re looking for

Can you (or your marketing person/agency) find a list of prospects from a database, or enter targeting parameters for a digital ad if the only descriptor you have is “companies who need marketing help?” or “people who could eat salsa?” Probably not.

Can you pull a list from a database or enter useful ad targeting parameters if you’re looking for “CEOs and presidents of companies in the health and wellness space that sell online and net between $50 million and $100 million” or “parents between the age of 40-50 who live in urban metros and make a household income of at least $150k?” Hell yeah you can.

Niching is good for networking

If you’re an entrepreneur who’s networking to find prospects, one big thing you can do to make sure all that time you’re spending is valuable is to effectively communicate about the niche you serve. You’ll find that:

• People understand who you’re looking to connect with, because it’s not “everyone.”

• People remember what you do, because you can give them concrete stories and examples. (And people always remember a story better. It's scientifically proven. Here’s a short video.)

• When you start talking to people within your niche, they know a ton of other people you want to talk to.

You've Seen it Work! (A Few Case Studies You Know)

In Nashville – the #1 destination in the U.S. for the bachelorette parties of young brides-to-be who are affluent enough to travel (but don’t wanna spend Vegas money) – an $11 billion industry caters to this niche market. The target market benefits “transportainment” ventures like Pedal Tavern and Party Barge, party planners such as Bach to Basics, tour companies like Photowalk Nashville that get bridal parties in front of the city’s most Instagram-worthy murals, along with a host of spas, salons, bars, and brunch spots. (There’s a whole film about it.)

Pictured on this guide: one of hundreds of thousands of bachelorette parties that go to Nashville each year

Impossible Burger caters to people who don’t eat meat – but really miss it. That’s a company who understands their customer’s psychographic profile.

Dollar Shave Club found a successful niche by offering young, trendy men an affordable alternative to pricey razors. The differentiator is right there in the name.

Slack is a successful B2B target expansion. It was made for one company, Tiny Spec, that was developing a game called Glitch. The game didn’t make it, but Tiny Spec understood there was a need in the market for their communication tool, and they successfully expanded their niche to other tech-forward businesses who needed more effective ways for their teams to collaborate.

How to Narrow with Confidence

Confession: Given that I’ve spent years encouraging entrepreneurs to narrow their target, it was surprisingly difficult to narrow down my own. I feel the pain! But now I can tell you from my own experience that it’s easier to make connections if you have a well-defined niche than it is if you don’t. Here are a few steps you’ve gotta take.

Embrace the Niche

First, I had to get over that mental hurdle of feeling like I’m somehow selling myself short by having a niche in the first place. Remember: You’re never excluded from doing business outside of your niche (or your narrowed-down target audience). You’re just using your target as a tool so you can more effectively market.

Embrace Your Target Audience

Choosing your target may feel like another mental hurdle – especially if you’ve worked with multiple types of people or companies, and enjoyed them all. What you’re looking for as you narrow down is an area in which your success is relevant, you are excited about focusing, and it is feasible to find a big enough target list. Also consider how well that market or niche can support the revenue you want to make, and whether it leaves you room for growth or expansion into a related niche.

Clearly Articulate Your Audience

If you’re an entrepreneur or a CEO, you are often your own best lead generator, just by nature of being out in your community. It’s important to understand how to define your target audience in a way that people can quickly/easily understand and act. Imagine yourself asking a networking contact, “Who do you know that is the CEO of an [X company]” or “Who do you know that is an [X type of customer/client]?” If it’s too hard to say in a few words, you probably need to narrow down further.

How to Define Your Target Audience

Any marketing strategy – no matter how complex it may get with KPIs, ROAS, automated email sequences, customer journeys, or any other marketing nerd term – can be boiled down to this:

1. Figure out who is most likely to buy your product or service

2. Build compelling messaging around how you can solve a pain point for those people and why your offering is better than their other options

3. Get your message in front of those people

Understanding your target audience is fundamental to all these steps. If you have literally anything you need to market, knowing your target audience is the place to start. Here's how you do it:

Start broad and narrow down with this framework

Target Market: A group of potential customers to whom a company could sell its products and services

Target Audience: A set of consumers a business is trying to reach with their advertising efforts – usually characterized by similar qualities (demographics, psychographics, etc.)

Ideal Customer Avatar (ICA): Semi-fictitious, research-based persona that helps marketers get to know their ideal customer

Example - a clothing subscription company:

Target Market: People who wear clothing, want to look good, and have disposable income with little time for shopping.

Target Audience: Busy, professional moms between the ages of 38 and 48 who are tech savvy, with an interest in fashion.

Ideal Customer Avatar (ICA): Alexis, a 42-year-old account exec with two children who loves shoes and handbags but hates malls and lines.

Here's a handy visualization. Start broad and narrow down. Then narrow down again.

Now you try! Come up with hypothetical examples for a beard oil, a food product, a B2B software, or a mountain bike – it’s kinda fun! After you've practiced on a few easy ones, go ahead and move onto your own offering.

Summary

Though it feels counter-intuitive, the benefits of refining and narrowing down your target market, or homing in on a specific niche, are numerous. It is less of a challenge to connect with more customers, and you can command a higher price when you offer what is perceived as a specialized service or product.

The more specific you can be about who you serve, the easier it becomes for you to find them, and the less resources you leverage to get in front of them. This is why the riches are in the niches.

Want to find your ideal customer?

I created a worksheet for that! 🎉 It's got fillable fields and everything. Click the button below to get instant access to your Ideal Customer Avatar Worksheet with fillable fields to make it easy!

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