Why Should You Do Niche Marketing

Many of you tuned in for our previous Show 8 “What is Niche Marketing” and we thank you so much for listening. On this show “Small Business Stacey” and “Digital Dave” continue to get more in depth on the topic of niche marking and discuss 10 Reasons Why You Should Do Niche Marketing. They present multiple examples of why niche marketing helped not just their coffee and smoothie business become extremely fun and lucrative, but you definitely won’t want to miss how a company using niche marketing literally has a waiting list to buy $900 plus irons.

Episode Transcript:

Stacey: Today, we’re going to share with you 10 reasons why you, as a small business owner, want to do niche marketing. Now, we’re not going to have time to go into depth into all 10, but we’ll try and elaborate on 2 or 3 of them so that you can really understand why niche marketing will benefit you. Here’s the 10 reasons why.

The first is that you can’t be everything to everybody. As a small business owner, that’s just going to be unrealistic. The second reason you should do niche marketing is it allows you to gain a deep understanding of your customer’s needs. The third reason to do niche marketing is it allows you to stay engaged with your customers.

Now, Digital Dave, in our coffee and smoothie business, we work with all different types of clients. And so how did you find that, when we really realized that niche marketing could help our business? How did it help us engage with those customers and clients?

Dave: Well, I think the important part … and that’s a really good question, by the way. I think the important part of … if you’re trying to answer the why you would want to do niche marketing, and you look at the first couple points there, you can’t be everything to everybody. And what you really want to try to do to engage with your customers, to get them to know, like, and trust you … and this is the main reason why … is that you’re trying to solve a problem for them. You’re trying to solve an issue for them.

If you look at our coffee and smoothie business, we were trying to be all things to everybody. And I’m not going to say we didn’t get business that way, but we didn’t get it at an accelerated rate. It was difficult to find a customer. It was like I felt like I was fighting to find a customer. And when we took a step back and we said, “Well, what can we do? What can we do in a niche that we can help them solve a problem?”

And so I’ll take the fundraising, or the fundraising example again from our first video. All these schools that we were going to to do fundraising need to raise money. They can’t exist without their PTAs raising money for pencils and extra stuff for educational needs, and they rely on people like us to help come in and help them raise money. They don’t have the time to put together these events and all the vendors and stuff like that, so we serve a very specific “why” for them.

The “why” was their pain. Their pain was, “We need to raise money. I don’t have the time to go make smoothies for people. Let’s just bring this company in. They’d do it all for us and give us a check.” That sounds like a pretty good why to me, or for fixing a problem in a niche, in an area, which is really what you’re trying to do with niche marketing.

Stacey: Yeah, and I would say since we’re focusing on why it helps engage the customer is then, they’re going to be more loyal to you, right? Because you did help them solve a problem, so when you talk about doing the fundraising, they’re not going to spend the time, effort to go and try and find another vendor, because they say, “You get me. You understand, and we have a great partnership now, so let’s continue working together.” That’s where the engagement comes in, right?

Dave: That’s correct, and they’re engaged. I mean, you’re engaged with them. I mean, you have got it like that. Once you’ve got to that know, like, and trust stage of fixing that problem for them, they don’t want to go anywhere else, unless you go somewhere. And this is really important, that you understand their needs. And they want to work with people that understand their needs and problems. It’s that simple.

Stacey: Right. Okay. Well, there’s some other reasons why. Should we keep going on?

Dave: Yep.

Stacey: Okay.

Dave: Absolutely. We got more.

Stacey: Okay. And this kind of hones in on what we were just talking about, but the fourth reason why to do niche marketing is it creates a one on one conversation. Again, instead of being everything to everybody, where you’re sounding so generic, right, then by having a one on one conversation, it’s very specific. Like, the language that you use, the images that you use are so pointed to that person that they say, “Yes.” They’re raising their hand. “You get me.”

Okay, Dave, so in our coffee and smoothie business, we finally figured out that it was much better to do niche marketing. And we could engage and have those one on one conversations. An example of how we did that was … how we would market to accounting firms would be completely different from how we would do that to, let’s say, for teacher appreciation. Can you maybe give some examples and elaborate on that?

Dave: I can, and it even goes further than that. How you market to an accounting firm obviously is very different from how you would market to, say, a teacher or a school. An interesting thing is, even within our own product lines, how we would market coffees and smoothies was actually very different than how we would market, say, coffee catering to an accounting firm. The reason being is that a lot of times, what happens is, an accounting firm may be doing different events for different reasons. If they’re doing a staff appreciation for their staff, they’re looking for something fun, right?

Stacey: Right.

Dave: Probably want somebody to come in, liven it up, have some fun. Well, if they’re doing a client appreciation, they may want to do something that’s a little bit more traditional, a little bit more conservative like coffee catering, so the people that they’re doing the event for don’t think that all they’re doing is having fun on their dime, right? Like, the accounting firm is just having a big party, right?

Stacey: Right.

Dave: And that really gets into nicheing and sub-nicheing. I mean, you’re literally nicheing within a niche. It is very different, how you market to an accounting firm, and it’s also very different, sometimes, how you market two of your different products to the same market.

Stacey: Yeah, and I would also add that it really allowed us to build those one on one conversations, because then, we became front of mind. When we were working with an accounting firm … and let’s say we got in there because we did do smoothies, then when they … because it was such a great event, when they wanted to do something fun like you elaborated to, we were the first person that they would call to find a solution. And sometimes, they would ask us to do services that we didn’t necessarily specialize in, and we would tell them so.

But it was great to know that we were the first point of contact, and that was because … why we did niche marketing.

Dave: That’s absolutely right.

Stacey: Yeah.

Dave: That makes sense.

Stacey: Okay. Let’s move on to some of these other ones. We are on number 5, and the fifth reason why is that niche marketing helps focusing your marketing efforts and your money on the customers that make sense for your business. Number 6 is that niche marketing creates barriers to entry and limits competition. I really like this one, because it’s sort of like building the fence around your herd, right?

Dave: Yeah, absolutely.

Stacey: That’s what we’ve been saying.

Dave: Right.

Stacey: You have the one on one conversation. They think of you first. They say, “God, this company gets me.” And now, you’ve built a fence around them. They’re not going to go anywhere else.

Dave: Right.

Stacey: But here’s an added benefit. They are willing to spend more because they think … not that they think, but because you do get them. An example is an iron company called Laurastar. Now, an iron is just an iron, right?

Dave: Could be, yeah.

Stacey: And sort of be everything to everyone, right.

Dave: Yeah, right.

Stacey: You can go to Target, Wal-Mart, Bed, Bath, and Beyond and probably buy one for about $35, right? This company was selling irons from $900 to $2,000.

Dave: Oh my gosh. Wow.

Stacey: $900 to $2,000, and they have a waiting list. It is so popular. Now, that was because they focused on niche marketing. They built the smallest and best iron that money could get.

Dave: Okay.

Stacey: Okay? They’re not catering … they have a very specific niche. They’re obviously focusing on the affluent, who want the very best and pristine … however that iron works, but it obviously works very well. They’re also making more profit by being able to charge $900 to $2,000 for an iron, whereas if you just buy one in general for $35, there’s probably minimal … 5 to 10% profit in that, right?

Dave: Makes … I mean, that makes sense. I mean, it really does.

Stacey: Yeah.

Dave: And that’s true. That’s exactly right of what will happen once you have kind of put this fence around your audience, in that you can generally charge more than your competition because they know they like … they trust you, and you saw an issue or a problem for them. Why would they want to go somewhere else? And that’s generally why you would do niche marketing.

Now, this iron example is pretty extreme. I don’t know what a $2,000 iron does versus a $35 iron, but I can tell you for certain that if they’re selling $2,000 irons and they’ve got a waiting list for those irons, they are not, probably, selling these generically on Amazon, meaning that they’re looking for a very specific kind of person that is going to use this iron. Maybe they live in a studio apartment in New York City and don’t have a lot of room, and they want a small iron.

I don’t know what the particular issue is that they’re solving here. Maybe, as Stacey said, it’s a pristine iron, and it does something very unique that the iron that I have doesn’t do. But they’ve obviously found a very small niche of people that are willing to spend $2,000 for an iron.

Stacey: Right, and you just hit on it. A small amount of people. They don’t need thousands and millions and trillions of people to buy their iron.

Dave: Oh, no.

Stacey: They can probably deal with a list of 100 to 200.

Dave: Sure, at $2,000 apiece.

Stacey: And make more profit-

Dave: Right.

Stacey: By focusing on those key customers.

Dave: I mean, that’s a great example. Absolutely.

Stacey: Right.

Dave: 100%.

Stacey: That’s a reason why you do niche marketing. Okay. Let’s continue on. The seventh reason is it limits the amount of time to do a sale. It’s going to shorten it, because as Dave mentioned, the customers know, like, and trust you. They’re not going to go around searching for five different providers. If they know that you can do it and you understand them, they’re going to give you their business.

Dave: That’s correct.

Stacey: Okay. Number 8 is it allows your team to have very focused responsibilities. I really like this, because again, instead of being a generalist, you can have somebody who specifically focuses on one key aspect of your business. In our coffee and smoothie business we have, as you mentioned, product niches. Smoothies and coffees and espressos and hot chocolate, so we don’t necessarily need to, but we could have one person who is responsible for each of those areas, right? One person oversees the smoothies. One person oversees the coffees.

And then, it’s great for if you’re a company who does a lot of different things, by having somebody who’s very focused, it helps them do their job better, because they’re focusing on just one thing. And it’s better service to the customer.

Dave: Oh, yeah, I would think so. I mean, obviously, if your staff is trained and very specialized in that one thing, like barista, just doing the coffee, right?

Stacey: Right.

Dave: And the person who’s most familiar with how to make a really good smoothie is doing the smoothies.

Stacey: Right.

Dave: Then obviously, you’re going to have better customer satisfaction, but you’re also going to have a lot less issues, headaches, and it’s that know, like, and trust factor, right?

Stacey: Right.

Dave: You’re sending your best person out to do the most … the thing that the client is asking for, and they’re the best one at it, right?

Stacey: Right.

Dave: Okay.

Stacey: Right. That’s great, Dave. Okay. The next one … we are up to number 9. Oh, yes. If you … a reason why you want to do niche marketing is look. We know you guys are the CEO, chief everything officer, right?

Dave: That’s right. That’s it.

Stacey: Yeah. They’re doing marketing and technology and payroll and HR and all these different hats, right? The reason why is that you’re going to just be exhausted, spinning your wheels, if you try and be a generalist and you try and be everything to everybody. If you focus on a niche, and again, build a fence around that herd, you will have a lot more free time. You will be a lot happier in your business.

Dave: The customers just come, and easier. And you’re not fighting for every customer, which is, if you’re a generalist, how you’re going to feel.

Stacey: Yeah, and like, when we first started in our coffee and smoothie business, we were generalists. We just went out and did everything, but we were exhausted.

Dave: Yeah.

Stacey: I mean, we were exhausted, and it just … it took so much energy out of us. We were kind of just spinning our wheels trying to figure out what was working, and then when we realized that, “Hey, if we just … we don’t have to be big. We have to be small, but be profitable in that small.” And that works so much better for us.

Dave: Absolutely. It’s 100% better.

Stacey: And now, we have so much more free time. We’re able to share our expertise with the small business community. We have a team who runs our day to day operations, and life is good, right?

Dave: Yeah. Yeah, it’s been great. It’s been great.

Stacey: Because we focused on niche marketing.

Dave: That’s right, and that’s absolutely right.

Stacey: Right. Okay. Ready for number 10?

Dave: I’m ready. Number 10.

Stacey: Okay. The tenth reason why is word of mouth, and this is actually from the customer’s point of view. A reason why to do niche marketing is that your customers will go out and become your marketing arm. They will spread the word for you, because you’re doing such a great job. Another reason why to do niche marketing, because if you’re just being a generalist … let’s go back to the iron. If you go buy an iron, and you bring that iron home, are you going to be so excited that you’re just going to go run and tell your next door neighbor about it?

Dave: I doubt it.

Stacey: Right. But if you buy a $900 or $2,000 iron, that’s very specific. You probably are going to be … you want to tell your friends about it, right?

Dave: Yeah, I’ve got to know what this iron does, but yeah. For $2,000, it must do something very, very, very fancy or unique. And Stacey’s absolutely right. When people are so excited about their purchase and what they’re using, they’re going to want to share that with people. They’re going to want to put it on social media.

Stacey: Yeah.

Dave: Without you even asking them, they’re going to want to give you a review and say how great this $2,000 iron is, because it’s unique, number one, I guess, and number two, because it’s doing something that’s really solving an issue for them. They’ll go out and be your champions, and that really does happen. We get so much traffic and business from our current customers that we’re almost at the point where we don’t have to do a lot of additional true marketing because it’s kind of building on itself now, right?

Stacey: Right.

Dave: Yeah.

Stacey: Yeah, our customers do. They post pictures out on social media, and they tag us, and so then, other people are seeing that. And then, they contact us, so yeah. It all just flows in sync. We covered 10 reasons why you should do marketing, and they really-

Dave: You mean niche marketing, right?

Stacey: What did I say?

Dave: You said why you should do marketing, but we have-

Stacey: Right, you should do niche … right.

Dave: Yeah.

Stacey: Ten reasons why you should do niche marketing, and it sort of follows … It runs the gamut, everything from … you’re not going to be exhausted. You’re not going to waste your time. You’re going to make more money. You are going to have customers, clients, and patients who know, like, and trust you. You’re going to be able to build a fence around them that they are not going to want to leave, and they will go out and become your brand ambassadors. I mean, that sort of summarize the 10, right? Huh?

Dave: That’s absolutely right, and I’ll just speak from my perspective of Stacey and our coffee and smoothie business, is that one of the funny things that happens is that when you do start to get into this position of having this fence around your customers and solving their problems and them knowing, liking, and trusting you, your business becomes fun again. It really does. It’s not work anymore, right? It doesn’t seem … I enjoy it.

Stacey: Right.

Dave: It just kind of … You’re helping them, and they’re helping you, and that’s how it works.

Stacey: Well, because you get to pick the customers that you want to work with. And ironically enough, it’s usually the cheap, low paying customers who are usually the pain in the rump, right?

Dave: Yeah, that seems to be the case a lot of times.

Stacey: Right? And so if you … and I don’t want to get off topic here, but by creating an experience and charging more for your products and services and giving people something to be excited about, they will pay more. They will become your brand ambassador.

Dave: Yeah, correct.

Stacey: And I’m just so excited of being able to focus on the niches that we have in our coffee and smoothie business.

Dave: Yeah.

Stacey: Because there was a point … and I talk about it, when it came to running a daily deal, because we were in trouble. And I hated the business. I mean, I was ready to be-

Dave: We got to that point.

Stacey: Yeah, I was ready to be done. And that’s when I realized that there was riches in niches.

Dave: Ah, a great saying. Riches in niches.

Stacey: There are riches in niches, so I think that’s probably a great way to end it, Dave.

Dave: That is a great way to end it. We’ll be back for the next episode of niche marketing, which will be the … we did what and why. It will be how, how to do niche marketing.

Stacey: Get more specific.

Dave: That’ll be great. That’s where we get into the nuts and bolts of how you do this. We’ll catch you next time.

Stacey: Right.