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Business Leaders Go Niche or Go Home

Alicia Arenas
Alicia Arenas
by
August 12, 2011

A friend asked me this question: “If you could give a client only one piece of advice, what would it be?” Easy answer: Choose a target market.

On the one hand, it seems to make sense that if you sell your products or services to a vast set of demographics, you will make more money. However, the exact opposite is true.

Most entrepreneurs are resistant to defining their niche usually because of the following beliefs:

  • If I choose a specific, niche market, I will lose business.
  • If I choose a target market, I will be stuck with it forever and I thrive on variety.
  • The more I have to sell, the more money I’m going to make.

I hear those statements all the time and at best, they are false. At worst, operating in those beliefs will sink your business.

In his book “Purple Cow,” Seth Godin tells us that the market is very good at ignoring you, just as you’re good at ignoring the market. Think about all the emails you delete before reading, the times you click “unsubscribe” and the T.V. shows you Tivo so you don’t have to watch the commercials. What’s the solution? The answer is “niche.”

Benefits of Having a Niche Market

Defining your target market:

  • Allows you to become an expert to that market
  • Multiplies your referrals – the more specific you are about who you serve, the easier it is for people to send business your way
  • Keeps you focused
  • Streamlines your marketing efforts and dollars

If you’re still not convinced, sit back, relax and prepare to laugh. This YouTube video says it all: Why You Need A Niche

  • http://dashthis.com Stephane Guerin

    I don’t know if this comes with experience and gray hairs, but I think it takes some maturity to choose a target market as it is to say no to business opportunity. At least, from a startup point of view.

    I’ve been launching startups for 15 years now and I think I’ve just started to say no. No to customers even if it costs me a sale. The reason is that we’d have to update significantly our product to get that customer. We do it for one, we do it for everyone and the product soon will look like an all-dressed pizza with no distinctive flavour.

    The guys from 37 signals get it right: Underdo the competition. Do less stuff, but do it better. It doesn’t matter if don’t get all the business. It wouldn’t be possible anyway.

    • http://www.sanerapdc.com Alicia Arenas

      Stephane, I started saying “no” when saying “yes” was costing me too much time, money and peace of mind. Adopting a target market and narrowing a niche is challenging, but the payoffs are huge.

      Thanks so much for your comment and for the 37 Signals quote.

  • http://www.getgravitas.com Jay Lebo

    This is a great article. Indeed one of the hardest things for any business leader to do is to make choices — to say no to one thing so you can say yes to another.

    Too many entrepreneurs let their customers or circumstances dictate their strategy. But the most successful business leaders are the ones who announce boldly what they are and what they do, not the ones who morph or change tack for every opportunity that presents itself.

    Choose a destination and pursue it without distraction.

    • Alicia Arenas

      I think you nailed it Jay.

      I see this issue frequently from corporate refugees. Layoffs, restructuring or retirement has prompted many in the corporate world to start their own businesses. In corporate, they are used to being what the company, customers and/or stockholders tell them they should be and they have a difficult time discovering who they really are and what they really want to do.

      Shout it from the rooftops: Choose a destination and pursue it without distraction.

      Thanks for stopping by the blog.

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