Finding your niche: Targeting smaller audiences can be the key to success

Most emerging small brands are presently facing a ‘growth paradox’ whether they are aware of this or not. On the one hand, they are trying to be everything for everyone and reach as many prospective consumers as possible, which is a viable strategy per se. On the other hand, they severely lack the resources necessary to launch large-scale marketing campaigns. While many of them do not realise this, this effectively makes the first strategy worthless. Imagine investing all your money in an 8-cylinder V-8 engine but lacking the money to purchase fuel for it. In practice, this usually leads to one of the following outcomes:

1. You waste all of your resources on large-scale campaigns during the first 2-3 months and give up this strategy due to the lack of results.

2. You fail to reach a lot of consumers since your positioning exposes you to competition with major brands.

3. You cannot build a loyal fan base and find yourself fighting a price war with multiple rivals offering similar products and services.

Why Less Is More in Small Brands Marketing?

Entering the competition with hundreds of rivals in a saturated market is an uphill battle and a suicide move for many small brands. You are trying to sell something already offered by other local companies as well as multinational corporations that are usually present in all lucrative market segments. The aforementioned strategy of ‘competing with the greatest’ via increasing marketing investments is a lost cause right from the start. As usual, the right solution lies in a place where no one is looking for it.

Think about a general practitioner. There are thousands of them in any country. Most of us usually have our favourite local GP but they are easily replaceable. Otherwise, any retiring specialist would lead to a collapse of the whole local healthcare system due to the difficulty of finding an equally unique replacement.

Now, think of a top 10 doctor in a narrow field of study such as endocrinology, immunology or ophthalmology. This imaginary person probably has their schedule booked several months ahead and does not encounter direct competition with general practitioners. Why would they? They have discovered themselves a unique niche.

What Is Niche Marketing?

A niche is a small segment of the market characterised by unique consumer needs. Do you like old gaming consoles? How about an interest in environmentally responsible furniture manufacturers? Maybe, you like to support social initiatives and purchase from social entrepreneurs making the world a better place? In all of these cases, your requests and expectations may differ from that of the general population. Chances are, you will be looking for a limited number of companies or experts capable of addressing your unique needs.

From a marketer’s standpoint, being this kind of provider automatically excludes you from the general competition. If you are making premium grilled gourmet burgers with seasonal herbs and spices and use Garlic shrimp and Mexican chorizo instead of cheap beef patties, McDonald’s and Burger King may not be your direct competitors anymore. You may even ‘wake up’ some ‘sleeper audiences’ who have been craving unique and high-quality products in this niche but could not find their favourite provider.

What Are the Pros and Cons of Niche Marketing in Relation to Your Business?

Like any method, niche marketing is not a magic panacea solving all your problems by simply being better than all its alternatives. It is a fine instrument addressing specific needs and challenges, which means that your brand needs to fit certain criteria to successfully use it and enjoy all of its benefits. Let us consider both pros and cons of niche marketing.

Pros:

1. Your marketing costs may decrease substantially

As you avoid direct competition with powerful major brands, you may find yourself saving money on Google Ads impressions and keywords prices. Your focus automatically means that you are targeting relatively unpopular spheres, which decreases your marketing costs. You can use the extra money to further strengthen your domination in these niches as soon as you see the first positive results.

2. Your targeting becomes more effective

Similarly, your capability to reach the consumers with unique needs boosts your conversion rates since interested clients are generally more willing to click on the ads offering solutions to their specific problems. In combination with local marketing and a good geotargeting strategy, this can quickly make a physical brand unstoppable in its key regions of presence.

3. Your customer base is more loyal and engaged

In the doctor example, your positive initial experience will most likely lead to a ‘consumer lock-in’ where you will be seeing the same specialist every time you encounter a problem in this unique sphere. The same goes for a fantastic burger bar serving your favourite dishes you have not encountered anywhere else. The best thing is, the consumers interested in your niche may spread the word across their communities granting you instant access to highly motivated buyers you could not access directly otherwise.

Cons:

1. Risks of non-performance

Niche marketing is largely based on a combination of a trial-and-error strategy and a good knowledge of your targeted customer segment. In order to reach certain audiences, you must be 100% certain that they exist and are willing to purchase your products and services. This may require some thoughtful experimentation to select the most optimal niche and marketing communication strategy.

2. Unpredictable audience size

Choosing a narrow market niche automatically reduces the size of your targeted audience. While this is generally beneficial for your marketing focus and costs, this also means that you can make the mistake of targeting an excessively small segment of customers. If you see that the number of leads is not growing over time, you may need to extend your niche size or choose another niche.

3. Threats of new players

If your customer numbers have grown beyond a certain point, your niche may turn out to be highly profitable. Unfortunately, this also attracts the attention of your local competitors as well as major corporations. Make sure that you maintain quality relationships with your clients and offer solutions specifically tailored to their needs to protect yourself from direct rivals lacking your expertise in a certain niche.