Niching is a risky business. We’ve heard the arguments against niching time and time again:
- But if I narrow my focus, won’t I miss out on potential customers? I don’t want to limit my opportunities by focusing on such a specific segment of the market.
- What if I get bored?
- What if my niche dries up?
MACKEY’s very own Sarah Grace is ready to bust some myths about niching and get real: nowadays, niching is necessary. It’s also a tried-and-true strategy to boost your profitability.
Stand Out From the Masses
The Pre-COVID playbook for getting your brand out there was rooted in a key strategy: network, network, network.
How did you find your clients? Attend events. Get to know people. Find the opportunities by relating person-to-person.
When COVID hit, we had to find new ways to connect and meet people. “Finding those perfect fits becomes a whole lot more complicated when confined to your home office,” says Sarah Grace. “And while the importance of having a digital presence isn’t new, it became … what’s a word for beyond essential? It became that.”
These days, if you’re not doing digital marketing, you’re setting yourself up for failure. But there’s a lot more to it than slapping together some Facebook posts and crossing it off your to-do list. You have to be intentional about your audience.
The internet is enormous and there’s a lot of competition. As a small business owner, you likely lack the millions of dollars a year that big companies spend to ensure their messaging is heard above the noise.
“The best way for small businesses to become discoverable in the digital space is to reign in your messaging. Be specific so that the right people can find you,” SG explains.
“Use social media and strategic hashtags to find your community and start speaking their language. Then repeat. Again, and again, and again.”
Harkening back to the role of networking at tradeshows, leverage digital spaces as a way of interacting with the right people. You don’t need to reach everyone, just your niche.
Niching is about honing your focus to avoid getting lost in the crowd. By defining who you are and using the right (and specific language) to market your company, your customers will find you. By narrowing your focus, you become discoverable.
Time Kills Deals
The other benefit of narrowing your focus? The people who find you want to find you.
We’ve heard it all before because it’s true: time kills deals.
“When you’ve niched down, the people that end up in your funnel are already good fits for your business. That means less active time and a smaller sales team needed to convert leads into sales,” shares Sarah Grace.
By getting nitty-gritty with your messaging, potential clients already, on a fundamental level, understand what you’re about.
“You spend a lot less time in those initial stages with a first-time client sorting through your offerings to figure out if you’re a good fit,” says Sarah Grace. “If what you offer is specific, it’s going to be pretty clear of how you can (and cannot) serve a potential client.”
The Winning Approach for Your Bottom Line
Not only does niching make the sales aspect of your business more efficient, but it also makes the actual creation of services and products more efficient.
Take one of our clients, Mach III, for example. They specialize in precision-made clutches, breaks, and torque limiters. It’s such a specific product that outsiders may wonder if there’s enough opportunity for a sustainable business. To which our client responds with a knowing smile.
Not only have they fine-tuned their skills to such an extent that they are the leading provider in the manufacturing industry and are therefore sought out by customers around the world, but they’ve also managed to optimize their processes so that they function with extreme efficiency.
Because Mach III only produces three things, they aren’t starting from scratch with every order. Instead of creating new CAD drawings each and every time, they work from pre-developed CAD templates, tweaking the design to fit the client’s specific requirements and move quickly into production.
Their specialization allows the company to fulfill orders faster, while also producing a premium product.
“Premium products mean premium price points and premium profitability,” says Sarah Grace.
This takes us to an important point that we see business owners make time and time again.
“Just because you can do something faster doesn’t mean you should charge less,” warns SG.
Read that again: Just because you can do something faster doesn’t mean you should charge less.
The time economy is a thing of the past. These days, we live predominantly in a knowledge economy, where the value you provide your customers informs the price point.
Niching allows you to become more efficient, enabling you to produce services and products faster, while still charging a premium price.
“Keep charging the same price (if not more),” says Sarah Grace. “This is how you grow your bottom line.
It’s also how you become a business by design and not a business by default. As you narrow your focus, decisions become easier, execution becomes second nature, and hiring becomes effortless since you know what skillsets people need to thrive at your company.
Niching is Infinite
Part of why we find people resistant to narrowing their focus is fear.
And fear is usually rooted in misunderstanding and misinformation.
“The options for niching are infinite,” Sarah Grace explains. “You don’t need to niche into a specific industry or a specific client persona. If you can dream it, you can niche it.”
SG explains that the MACKEY team niched into working with owners and leaders who want to build enduring businesses. “Yes, we have the skillset and knowledge to support someone primarily focused on rapid growth,” she says. “But we’ve decided that’s not the client that inspires us.”
Further, MACKEY intentionally decided against niching within an industry because (queue the Mackey McNeill nature talk) “We love cross-pollination!” laughs Sarah Grace.
“We’ve learned best practices and strategies from our clients in a broad range of industries. We’ve been able to take those ideas and tools and adapt them to serve clients in completely different industries. The constant business education we receive as financial advisors for owners in a variety of industries allows us to stay nimble, creative, and these experiences and learning opportunities help us spread the wealth and share resources for all of our clients,” SG says.
Find Your Fit
So how do you find your niche? Sarah Grace believes you already know what it is, though you may not have taken the time to articulate your focus.
She takes inspiration from Joe Polish’s ELF acronym, though she’s adapted the concept to ELFS.
Easy. Lucrative. Fun. Successful.
Here’s a quick exercise for you:
- Print out a list of your clients.
- Highlight your ELFS – the clients that are easy to work with, profitable, fun to spend time supporting, and convert to a successful partnership.
- Now, spend some time reflecting. Ask yourself some critical questions:
- What do these clients have in common?
- What about them makes them my ELFS?
Your answer? That’s your niche.
Once you’ve identified your niche and targeted messaging and services towards your ideal customer, it’s all about speaking from your heart. “That’s how you find the right clients,” says SG. “And yes, you may miss out on some potential sales, but I’d argue those clients will be less profitable and not the best fit for your business in the long run. So, while you may miss out on a few clients, you’re not missing out on actual revenue.”
What’s Holding You Back?
Here’s the hard part: niching requires a lot of vulnerability.
(You didn’t think we were going to interview Sarah Grace and not sneak in a Brené Brown reference, did you?)
“It takes courage to wave your freak flag and say, ‘This is who I am. This is what I’m about. And this is what I want to do with my business,’” says Sarah Grace. “But here’s the deal: what may be a freak flag to some is a symbol of belonging to others.”
By being true to yourself and your aspirations, you’ll find your people. And they’ll find you.
And if you’re in good company, who cares if some people think you’re a bit of a weirdo?