Who do you want to sell to? It may seem like an obvious question for a business, but identifying your niche market (a.k.a. buyer persona, target prospect, target segment, ideal profitable customer, etc.) may be more challenging than it sounds. Plus, the answer might change over time as your company grows and develops. Here are some ideas about how startups and early-stage companies can improve the success of their sales and marketing investment by clearly identifying their target market criteria, building a list of ideal customers, and tightening the messaging.
The article topics include:
- Challenges of a Generalist Approach
- Benefits of Niche Marketing
- Niche Market Examples
- Steps to Find Target Contacts in Your Niche
- Video -> How I Personally Struggle with Focusing On a Niche (Plus an overview of what I cover in the article)
Challenges of a Generalist Approach
Being a generalist has its advantages: it means that you are competent in many different areas. Broad knowledge and expertise ensure a well-rounded understanding of the field, providing greater insight into problems and better solutions.
While being good at many things is awesome, companies with too many balls in the air can get spread too thin, especially when trying to scale. From a sales and marketing standpoint, knowing where to focus is much more difficult with a generalist approach (Read: An Unclear Target Audience Makes it Harder to Sell). Creating campaigns to target many different types of companies and buyers is expensive and usually impractical for startups or early-stage companies.
“Companies that try to be “all things to all people” have significantly higher costs, never really establish a strong customer base from which to grow, and often disappear before achieving profitable growth. If you’re like most people, though, it’s really hard to walk away from any potential business. Yet closing the door on some opportunities truly opens far more doors for you in others.” ~ Crossing the Chasm, Geoffrey Moore
The good news is that if a generalist is good at many things, they likely have the smarts and drive to be really good at a few things. But identifying the areas the business will disinvest in if needed and the niche to double down on can be tough. Check out How to Find a Niche Market for three tips you can use to help you narrow down your segment.
The struggle is real, but staying focused on the benefits of a targeted approach is an effective guardrail against chasing shiny objects.
5 Benefits of Niche Marketing
Niche marketing means targeting campaigns for a particular type of buyer. It’s the opposite of “spray and pray.” Here are the advantages of being willing to stop doing things that aren’t as profitable and focusing on the things that are.
- Increased Profits: Some customers are a better fit than others. When the marketing niche is clearly defined, organizations can stay focused on selling the most profitable products and services to their ideal customers.
- Increased Productivity: Focus and consistency create the groundwork for systems and processes to achieve maximum output.
- Reduced Marketing Costs: Well-designed sales and marketing campaigns that effectively engage the target audience can be continuously repurposed and re-used, driving leads for months or years.
- Greater Trust and Credibility: More experience in the marketing niche builds industry thought leadership and helps establish the brand as an expert who can solve problems.
- Reduced Competition: Once seen as an expert in the field, it’s easier to get more of the same types of customers. The niche expertise creates a clear competitive advantage when going up against a generalist.
Niche Market Examples
The narrower your segment, the better!
Example: Accounting by itself is very broad. Almost every person and business needs accounting services at some point, but the type of expertise and services they need varies widely. If segmented down to “business accounting services,” it immediately changes the conversation, and you can start visualizing who needs it and why. If it is narrowed down even more, such as “construction accounting services,” it’s even easier to identify particular companies and buyers that would be ideal for your offering.
Sometimes your marketing niche happens organically. For example, a dentist might start with a generalized practice offering all types of services to any person who calls. Her dental practice is near an elementary school, and many families with small children are nearby. Over time, she discovers her customer list is primarily families with small kids. She optimizes her practice to create a dental experience highly customized for young children. Pretty soon, the kids are telling their friends how much they like it there, and the parents are telling their friends how great the practice is, and then all the moms and dads want to take their kids there!
Here’s another scenario: A hobby shop starts with mostly art supplies but throws in a few remote control vehicles for fun. Over time, more people come into the shop to learn about remote control vehicles than art supplies. The profit is higher on remote control vehicles, so the business carries more varieties, parts, and related services. Pretty soon, they are the “go-to” shop for remote control vehicles, leading to more phone calls, more people in the store, and more sales of their most profitable products.
Steps to Build a Target Prospect List in Your Niche Market
Companies don’t sell to niches; they sell to people - real flesh-and-blood humans. Focusing on a target segment makes it much easier to identify humans that need your offering and create messaging that resonates.
1. Scrape your current database. Once you know the criteria for your ideal profitable customer, it can be easy to pull a list of contacts in your CRM that meet it. For example, your list criteria could include the following:
- Industry: Construction
- Annual Rev: $5M+
- Job Title: Construction Manager
- Location: Michigan
As long as those fields are populated in the CRM, filters can be applied to create a target list. If the CRM is not well-maintained, a data cleansing or append program may need to be implemented before a list can be pulled. (Here’s what a data optimization program looks like.)
2. Scrape your LinkedIn connections. A similar process can be used against 1st-level LinkedIn connections. Using filters provided by LinkedIn Sales Navigator, you can identify a list of contacts that meet the ideal profitable customer criteria.
3. Social monitoring and listening: Businesses can monitor keywords or phrases that indicate trigger events using social monitoring tools like Truescope. For example, if a company’s specialty is moving heavy machinery for manufacturing facilities in Ohio, plants shutting down or moving locations will likely need that service. Monitoring the Internet and social media for articles or posts about shutdowns or relocations is a perfect way to find prospects that need the service offering now.
Like social monitoring, social listening involves reviewing comments on relevant social media posts, checking out the people commenting, and identifying those who may be a good fit for the company’s offering. It can work! One of our customers has been hugely successful by posting good content on LinkedIn with high engagement, then scraping leads from the post comments.
4. Associations and Groups: Once the marketing niche criteria are identified, find relevant associations or groups for those target buyers. Using the example of the heavy machine moving company in Ohio above, getting involved in the Ohio Manufacturers’ Association will provide them with direct access to their target buyers. LinkedIn or Facebook groups, or other online forums can be great places to build brand awareness, credibility, and trust. And with solid social monitoring and listening programs, no potential lead will fall through the cracks.
5. Purchased List: You’ll notice this is last on our list, but it’s usually first on most businesses’ agenda when they attempt to build a target prospect list. Purchased lists are acceptable starting points but must be vetted before one-to-one outreach attempts.
Notice we suggest one-to-one outreach attempts to new prospects. Don’t just throw new contacts on the email marketing list! They should only be added if they opt in. When sales and marketing are aligned, the one-to-one communication plan gives prospects plenty of opportunities to engage with marketing content, subscribe, or follow the company on social media.
Video: How I Personally Struggle with Focusing On a Niche
Streamlining to focus on ideal niches and target prospects takes commitment and dedication but creates solutions that are more valuable to customers and profitable to the business. Check out the article, Example of a Full Digital Marketing Plan and Budget, for ideas about engaging your niche and converting leads into qualified opportunities.
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