All good business leaders these days know that developing a niche market strategy is critical to growing deep business development roots. People want to be served by experts, particularly in the consulting or professional service spaces. If you haven’t made a mark as a thought leader in your specific slice of the market, you’re breathing competitive tailwinds as you lead from behind, and soon you’ll be choking. Or so says conventional wisdom. I’m here to tell you that it’s not a one-size-fits-all world, and there are times when, for your own fiscal health, you need to commit Nicheocide and kill your niche market.
A Good Niche Market is Good Business
If you’re thinking this article is anti-niche for your business, sorry to disappoint. I love niches! My niche is helping to move the sales needle for technology firms in the Federal marketplace that are willing to invest in their growth. Master motivator Zig Zigglar has made the concept axiomatic with the mantra, “It’s better to be a meaningful specific than a wandering generality.”
Many professional consultancies try to keep the options open in order to turn a buck. I sold for 2 Information Technology firms that had a genuine fear of even putting a few key market verticals that they served on their websites and brochures, thinking it would shut them out of other business. My comment then and now was “balderdash!” There is the business you pursue and then the business you take, the latter usually being a broader pool.
Beyond the obvious focus that a niche market strategy provides, according to Tamara Suttle of Private Practice from the Inside Out, great niche market players in good niches are more memorable than generalists. Keep in mind the subtle difference between finding an existing niche and creating a new niche or category. There are pros and cons to both.
Committing Nicheocide – Pulling the Plug
I could have called this piece, “When Niches Attack!” or perhaps more aptly, “When Good Niches Go Bad.” How do you know when your niche has jumped the business shark and it’s time to kill it? Due to the rapid change of the world in 2014, you need to be evaluating marketing strategy at least quarterly to see if your good niche has, in fact, gone bad.
Here are three good evaluation questions to ask. If the answer to any two of them is Yes, maybe even one of them if it is strong enough, it’s time to break out the sleeping pills and euthanize your niche:
1. Is Your Niche Market Stale?
At one time your narrow marketing strategy was cool and unique, giving you a competitive advantage. Heck, maybe your company invented the category. But is it still that kick-butt, innovative idea or way of doing business that sparks curiosity, intrigue and action while insulating you from competition?
Paul Niederer in his Niche Marketing blog points out that “…the word “crowdfunding” will have virtually disappeared as peer to peer transactions will have become the norm. Same thing happened with the term social networking.” Ask all the self-styled social media consultants how easy it is to get business these days, even while social media is still all the rage. Another way to view this is to ask if your once-successful business niche has become commoditized over time. All good ideas eventually go this route.
2. Does Your Niche have a Negative Association?
“I can help you get a sub-prime mortgage!”
…you squeal as you force your headshot-adorned business card on people at the chamber of commerce, but no one’s taking. It wasn’t always like this, you think. Back in 2005 to 2007ish, you were making a killing. What happened? How did what was so good get so bad? Times change, and so do connotations of many market niches, either due to simple buyer fatigue, or, in the example just given, something unpleasant has happened in business or society that is now attached to your niche, be it the collapse of a financial system and ruin of millions, a miracle cure that resulted in a few ill-timed deaths, or simply the media with an axe to grind. It really doesn’t matter why. If your niche has developed a negative association, it may be time to get out of it.
3. Has Your Niche Market become Obsolete?
The final and perhaps the most obvious reason to re-consider your niche market is when you determine it no longer adds high-value for customers. No high-value = obsolescence in a hurry. Notice I didn’t say it adds zero value, it’s just not considered the maximum value any longer. Imagine all the buggy whip manufacturers and horse-drawn carriage companies whose executives leapt from tall buildings after Henry Ford made his mark on the planet.
It’s not always that obvious, however, and that’s why you need to keep asking good questions. Suppose you are the pre-eminent print media buy consultant for small business in the year 2014? You may want to take a look around and re-examine that niche as corporate dollars flock to social advertising in higher percentages of spend each day.
Reincarnation – Reinventing the Company
So what do you do? Well, you can write a book on corporate reinvention. Come to think of it, there are gobs of them on Amazon and Barnes & Noble now. The reality is, reinvention and rebirth comes when you realize that your niche is most often a tactic, but it shouldn’t define the business you are in. The horse and carriage jumpers that realized they were in the people-moving business did just fine when the automobile came around, they simply changed their approach to people moving (RE: see railroad, see airplane, see teleportation).
I had two friends in the sub-prime mortgage business. That was their niche market. Before the flames had totally engulfed that business, rising from the ashes came the fellas’ early entry into the loan-modification Phoenix. Heck, they already had the call lists! As that business entered the nursing home of commoditization and scheysterization, these guys realized that companies (like their own) were willing to pay a lot for very specific data lists. Leveraging the contacts they already had, they moved into a B2B information gathering and distribution service. That last jump of B2C on to B2B seems like a big one if you can’t visualize it, but really it was the next logical extension of market thought. Bigger ticket sales, few customers and closes, more money. The American Dream is alive and well.
Now I am not suggesting that everyone look to reincarnate their business every couple of years. It’s up to you to evaluate the cycle time of your business, see the factors affecting it, and take action. No one wants to slowly decay toward the inevitable business death brought about by stagnation, negative public associations, or obsolescence. Better to commit well-timed nicheocide and create a new, exciting and successful business baby.