Niche

Niche

A niche can be the key to creating a unique story for your product. I experienced that when I helped my son at his school. Every year, the school organizes a charity party. The kids prepare some products, and their parents host the tables to sell to other parents. My wife volunteered for a slot at the table. Our son and his friends created bee‘s wraps, and I was motivated to help with the sales.

My first approach was to relate to the audience, saying that the wraps were hard work done by our children. One family whose kid was in the same class as my son bought the first wrap. I wanted a bit more. I told the next parents that not only was the wrap made by the kids, but also that there was a fantastic bundle to be sure that all the food that kids bring to school was properly packaged. The parents bought the bundle that was more expensive.

I wanted to push the story further and see if I could be more convincing. I told the next parents how the kids prepared the bee‘s wraps and how the product is sustainable. Their children can re-use the wraps indefinitely, and every time they are happy, they protect the environment. No waste, no plastic, only re-usable bee‘s wraps so that the kids can respect the world in which we live. The parents love the story so much that they paid 10 times more for the bundle! At the end, all of us were happy. The kids put in a lot of work to create the wraps that sold out, and the parents were happy to support the children and the environment.

Bees Wrap Niche

Takeaways

  • An example of sustinability niche
  • Niching to become an expert
  • Define your price

Niche: Because Your Customers Are Unique

If we want to find the opposite of niche, it would be mass. In terms of products, you can choose between mass production and a personalized offer. If you decide to go for a particular niche, then you can define your offer in a specialized way so that your small audience can relate to and appreciate what you do. Following this approach brings you several benefits.

The Niche Expert

As soon as you identify the audience of your niche, you can understand it better and provide them with what they care about the most. Your niche audience becomes smaller and has specific traits. You can then talk to your audience, knowing what they wish for. You can be the expert because you know them and can talk in specific terms. Meet them where they meet and become a thought leader in your niche! This increases your reputation and brings more value to your brand.

Most people think you should go for the largest market possible, to make the easiest sales, instead of intentionally limiting your customer base. Doing so actually elevates your status, however, because now you seem exclusive.

Chris Dreyer, Founder of Rankings.io

Niche leverages prices

Now you can imagine the following situation: you are an expert in your niche, you understand what your audience wants, and you can offer them exactly their wishes. In this scenario, you can charge a higher amount of money because your audience values you. You are not a commodity that people can swap with. Mass producers fight to present the cheapest price, and you are not one of them. You are an expert; your reputation is high, and you can decide what your value is.

Think of a brand you like that can set up high prices. Think of Ferrari, Rolex, and Louis Vuitton as expensive brands. They created products for particular audiences, and they can charge premium prices. In the same watch industry, Casio targeted a cheaper and more technical audience. Swatch entered the market to be funny, colorful, and personal. Even less-known brands can engage with their local audience, treat their customers better, and their customers will pay more for a higher service.

Niche Expert

Niche unlocks referrals

Another great aspect of niching is that you can gain referrals in an easier way. The most common referral is from customers who appreciate your expertise and the quality of your product. Stop for a second and think. When you offer specific products, then other businesses can refer you to their customers. If you offer anything, then everyone else is your competitor. If you offer specific products, then you can cooperate with other businesses to refer each other because you are no longer competitors but complementary. Referrals from other businesses can be a great way to collaborate with other partners and form synergies. In this way, you can save a lot of money on marketing and advertising.

Efficiency

Another advantage of niching is that you can focus on particular aspects of your production. The operations you do become less expensive, and you can increase their quality. Better operations mean lower costs too. 

Niche Referrals

Experiences with Niche

I do not know many companies that are so strong that they do not need to select their niche. If they are generic, then a competitor can enter one of their niches and serve the customers better. Let’s say that Rolex is the first player in the industry, then Casio comes and has to find a niche, for example, the technical specialty. If later on Swatch wants to have some market, then they need to find their niche and aim for a fun and cheaper audience. They can all make great watches and do more than they do. They still need to select the specific area where they can be the experts—the special ones.

Once, we developed software that was running in the cloud, on premises, and on mobile phones. This was done to address every possible client. The result was that we had to niche up in order to better serve our focus market. One of the reasons why startups fail is that they go after a 3% market. Even if this number seems small and it will contain a great number of customers, the risk is that we do not really focus on that 3%, making them feel special. We just hope to convince the 3%. 

Niche in action!

Now is the time for action; it’s your turn! Consider your business. Do you know your customers well? Do you identify their specific characteristics? Can you specialize further to address a smaller niche while at the same time creating a better connection with them? Can you create a new product that addresses a smaller market? Is the new market a new niche? Is it the right time for you to wake up?

Conclusion

Niching is a great way to address a smaller audience, become an expert, and offer your clients a much better experience. Among the benefits, you can be seen as a thought leader, you can gain referrals from complementary businesses, and you can define your own unique prices.

Do you remember the story at the beginning about my son‘s school producing bee wraps? I researched the top niches for new businesses and found that sustainability is gaining great momentum, and one company is indeed producing… bee wraps.

As book reference, I can recommend Niching Up: The Narrower the Market, the Bigger the Prize by Chris Dreyer.

If you selected your niche and want more information on how to create your own site to have your own blog, you can read my guide on how to create a website.

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