Loading…
what is niche marketing

What is Niche Marketing?

“Small Business Stacey” and “Digital Dave” discuss what is Niche Marketing and why it is so critical to marketing success for small businesses today. They will share real life examples of Niche Marketing Strategies that have worked for them in their previous business ventures to help you think of how to implement Niche Marketing in your business. This will be 1 of 5 episodes coming up on Niche Marketing so stay tuned.

Episode Transcript:

 

Stacey: Hi, I’m Small Business Stacey.

Dave: I’m Digital Dave.

Stacey: Where marketing.

Dave: Meets technology.

Stacey: You started your small business because you want to serve so many people, and make so much money. You have grand visions, right Dave? We did the same thing in our coffee and smoothie business, right?

Dave: That’s absolutely right, yeah. We were going after the world when we started.

Stacey: Well, how did that work out for us?

Dave: Well, it started off very well. Where we were able to get customers, but it never really scaled. It was very difficult, and a lot of hard work to get every new customer.

Stacey: That’s a good point. That’s because as a small business owner, you can’t be everything to everybody. One of the mantras that I’m always preaching is, “Be something for someone.” That’s what we’re going to talk about today. How you do that, with niche marketing.

Dave: You mean, what is a niche, right?

Stacey: We’re going to talk about …

Dave: What is a niche, right?

Stacey: What is a niche, right.

Dave: Right.

Stacey: Most small business owners, as I said, they think, “I want to serve anybody and anybody. Anybody can be my customer.” They don’t even know what niche marketing is. We’re going to start with the basics today, and really hone in on what is niche marketing, what does it mean, and then in future episode we’ll talk about how small business owners can do it, and examples.
Let’s relate niche marketing to fishing. Dave, you love to fish, right?

Dave: That’s correct, I love to fish.

Stacey: Dave loves to fish. Now, would you just put on any bait and throw it into the water, and expect to find a fish?

Dave: Absolutely not. Fishing is an art, where if you want to catch fish, you gotta know what kind of bait to use, and for what type of fishing that you’re doing. If you’re fishing in a pond, you use probably a different type of bait, if you’re fishing in a river, versus if you’re fishing in the ocean.

Stacey: Exactly. I referenced this in a post on the SmallBizMarketingSpecialist.com blog, where I did a video segment on using the right bait. Dave was out there fishing, and it made me realize that if you’re going to catch … Let’s say Dave is fishing for bass. What bait would you use?

Dave: It depends. This comes all down to, again, the way you can define and develop your niche market, you can use different baits in different types of ponds. You can use different baits in different times of year, and you can use different baits based on the water conditions.

Stacey: Wow, okay.

Dave: Which, when you think about it, relates highly to niche marketing.

Stacey: Exactly, because if … You just can’t put a leaf on a hook, and expect to cash a fish, right?

Dave: Probably not.

Stacey: Even if you use something as a worm, there’s live worms, and there’s, I guess these lure worms, right?

Dave: Unofficial worms, plastic, rubber.

Stacey: They catch different kinds of fish, right? You’re going after your niche, you want to catch that one specific fish.

Dave: That’s correct.

Stacey: The right kind of bait will catch that specific fish, right Dave?

Dave: That’s correct.

Stacey: Okay.

Dave: Yeah, I love fishing. Let me give you an analogy, a couple analogies of what niche marketing really is about, and why it’s so important. It’s kind of like you can go after any kind of customer, and that’s okay. When you’re getting ready to spend marketing money, and time, and effort to market your business, you’re putting the cart before the horse by trying to go after the whole world. Think about it like this, and this goes back to my fishing example. I think this illustrates it probably the best that I can do, of what niche marketing is. That is if you are the fish itself, would you rather be a big fish in a very small pond, or would your rather be a small fish in a very big pond?

Well, I would rather be the big fish. I would rather be the one that everybody comes to and looks to for advice, and expertise, and how to become a big fish like me. Niche marketing is very much like that, in that you want to spend your time and money laser focused into areas that you can become the big fish.

Stacey: Yeah, that’s a great analogy Dave. It’s such a simple, there are two words, right? There’s niche, and there’s marketing. Let’s sort of break that apart of what it means, okay? Marketing, we all know what marketing is. It’s selling products or services, getting it out into the marketplace. Niche is focusing in on a specific who, a specific person, a customer. Marketing, selling your products and services, to a specific person. It’s literally like having a one on one conversation. You elaborated on it when you talked about trying to be everything to everyone. No small business owner has unlimited marketing dollars. I mean, we tend to see what all these big companies do with their marketing, right? We want to do, we tend to want to emulate them. Let’s be realistic, they probably do spend more money on paperclips in a year than your small business will spend in marketing in a year. It’s just not realistic to try to do the type of marketing that a big companies doing.

Dave: Let me add to that, okay? That’s exactly right. A big business can afford to be wrong in their marketing as well. If they spend a million dollars on an ad and it doesn’t work, that’s not critical to them probably. You as a small business owner, if you spend $5,000 on an ad and it doesn’t work, that can be crucial to your business, to your money, to your cashflow. This is why niche marketing is so critical … That you find out which niches that you specifically want to take your business into. Generally, we’re going to talk more about how to do this in future episodes so I don’t want to spill too much of the beans in this one. Generally you want to pick niches that are something that you have interest in, some area that you may have had some previous experience in.
We’ll talk a lot about our coffee and smoothie business, but one of the things that we did with our coffee and smoothie business as we said, is we started out like most people. We wanted to take over the world. We wanted to go do all kinds of different things. We wanted to do events, we wanted to do catering, we wanted stores, we wanted celebrity endorsements, who knows. We wanted it all. We went out there to do that, and what we realized is, “Oh my God, how do we all this?” You cannot do this. It’s impossible to do all of these things at one time.
What we did is we backed up and we said, “Okay, how can we get business quickly and efficiently? We need the money, okay? We need the cashflow. We know we’re going to have to spend some time and money in our marketing efforts. How do we do this and get the greatest return in the quickest fashion?” What we did is we backed up and we said, “Well hey, let’s look at some things we can do with our business that would allow us to get in front of a lot of people.” One of the areas that we immediately looked at, I mean this is something because of our product. We’ll get into the difference between what a market niche and what a product niche is eventually.

One of the things we did was, well we sell coffees and smoothies, that’s our primary product. Where is our market for coffees and smoothies? Well for doing this for awhile before this, we knew our niche was younger people at the time. Probably people that were college level or less in age were the smoothie drinkers when we first came out. We said, “Well where can we find these people? Where’s a good place to look for these?” Well that’s a no brainer, how about in the schools, right, right? We said, “Well, why don’t do we this. Why don’t we take our smoothie business into the schools?” We did this in a unique way, we looked it and we said, “Well we can’t just call these people up and say, ‘We’re great, they’re going to love our smoothies. Have us come out, we’ll have a big smoothie party,’ right?” Probably not going to get too many people, our phones not going to be ringing.

We decided to take that a little further and package this. Package this almost into a product that they could buy. That was a fun raiser, F-U-N raiser, right? What that meant in our business is that, have us out to your school, we’ll bring our tiki bar and our great smoothies to serve to your students. Guess what? We’re going to give your school money. We’re going to give you part of the proceeds that we make, to allow us to come out. You know what? The phones instantly started ringing. We were booked for schools week after week, month after month. We had constant business coming in for fundraisers. We actually raised probably in the neighborhood of 15 to $20,000 per year, 15 to 20,000 per year for schools in our area.

Not only were we getting great exposure by being in these schools, we were in the right market for our product, we had no problem selling things. In fact, we had lines that were so long we couldn’t even get through them. We were helping the schools out, what a great way to get your name out there, have fun, right? Fun raiser, and market into a specific niche where we could be known as the Fun Raiser Tiki Bar Smoothie Company. Not just the Smoothie People, but the Tiki Bar Smoothie People for fun raising. You can see how we took a niche and really focused in on that niche so that we could go as deep as we could into that, and actually productize it so that people knew that we’re fundraising. I mean they knew that we were the Tiki Bar Fun Raisers. That is what you can do by niche-ing your product. That was one of my examples that I wanted to share today, do you have some examples from some things we’ve done in the past?

Stacey: No, that’s a great example. Dave elaborated, there’s really two pieces to niche marketing. There is market niche, and product niche. You can do both, right? Dave was giving the example of focusing on a market niche. Instead of selling smoothies to everybody, we honed in on, “Well, who was asking us most for our smoothies, and how could we best deliver it to them, and make money doing it?” Schools, because kids became a market niche. From there it was easy to duplicate. We expanded our market niche once we got really great in the schools, and then we started going to churches, and synagogues, and pools. Dave mentioned talking about fundraisers for schools, but we were easily able to duplicate that and take it into other niches.

That’s an example of the market niche. Now, the product niche, what happened is this worked so well that we were so busy in the summer, but then the winter came and we were kind of sitting here twiddling our thumbs. We were like, “Well what can we do to generate some cashflow in the colder months?” We knew we had coffees and smoothies as our main product, but what we did was we listened to what our customers were kind of asking for. Even within the schools, they were looking for something that was fun, and that they could still make money from as a fundraiser. We realized that we had great coffee, Hawaiian coffee, the best in the world. Why shouldn’t we do those foo-foo coffees? Cappuccinos, and lattes, and macchiatos. I mean, everyone is always talking about going to Starbucks.

Well, we were bringing Starbucks to you. We productized the niche, and then we expanded into hot chocolate because it was something we had that was just so easy to tag along. We already had the niche per say, but we were able to offer additional products as additional product niches to expand our offerings and keep us busy year round.

Dave: We were the big fish in the small pond.

Stacey: Right.

Dave: It was as simple as literally Stacey putting together an E-newsletter. Sending this out to our tribe of people, to our customers that were already our champions and saying, “Hey, let’s have some more fun. We’re just going to use a different product this time.” We filled our calendar even quickly during those months. This is a great way to take your market, and actually niche a product into an existing market. What is really crucial about this is that as we talk about what is niche marketing. It’s really important to understand why you should do this first, all right? Before you spend your marketing money. Maybe your product is so unique you don’t have to compete with somebody that’s bigger than you. Chances are you do, all right?

Why not try to be the bigger fish in a small pond somewhere? It’s just ultimately so critical before you spend money, to do this. Market niche, and product niche are very important to niche-ing. They are succinctly different. Again, when you look at our examples it was we looked at the market niches first, we had our smoothie product, okay? Very good product, good product, everybody loved it. We picked a handful of niches. Not even a handful, but we started with schools. We then said, “Okay, we are the big fish in this pond now for this. Let’s go out and go into something that’s similar.” We found that synagogues, churches, fundraising, they’re looking for ways to raise money the same way that schools are looking to raise money. We went into a similar niche, very similar to the schools.

Then we actually went further than that, and because we were already in the schools and we had all of the kids and stuff, we had them as captive audiences, where do they hangout in the summer? They hangout at the pools, right? We decided to say, “Hey, look. These are the same kids at these schools, let’s go find their neighborhood pools and see if we can do something with those pools during the summer.” We actually ended up having multiple things come out of that. We would get catering for parties at these pools. They always have pool parties, and they would invite our food trucks out there to sell concessions on the weekend. A lot of these pools don’t have concession stands, so they were happy to have some type of a vendor with food. Not food, with something to drink and eat, and snack on while they’re at the pool. That’s kind of how you can take and use market niche first, and then product niche second. You don’t have to do it in that order.

I also encourage that as you do decide to pick your market niches, that … Particularly look at your background, right? You probably have talents and things that are unique to you. For instance, Stacey was a baton twirler when she was young, all right? Now, there’s not a big market for baton twirling around this area, but one of the natural niches that goes hand in hand right next to it is gymnastics. There’s another niche that if we ever wanted to niche into an area where Stacey has some interest in, which your passion, it’s going to bring out her passion. Gymnastics and/or baton twirling would be a niche that would be unique to her probably. She can speak their language already, she’s already going to have instant credibility with these people, and very quickly be able to become that big fish in that small pond.

Stacey: It’s true. The thing is that so many small business owners, they focus on getting the sell. “Where’s my next customer coming from?” Where as when you focus on niche marketing, you’re actually focusing on retention. I talk a lot that my dad always says, “It’s cheaper to keep her.” It’s so true, but with niche marketing, because that person feels like you’re having a one on one conversation with them. That, “You get me. I want to do business with you.” It’s like you’re building a fence around them. They are not going to go anywhere else. I mean we experienced this at our coffee and smoothie business, because when we started honing in on the schools as a niche, and then the teachers were like, “Well gosh, let’s do this for staff appreciation.”

Then the moms and dads were there and they said, “God, this would be great in our office. Can you come out and do it?” We were building a fence around all of these different niches. Nobody could get in, because yes there was some competition, but they wanted to do business with us because in their mind, we were one of them. They felt like we understood what their needs were when it came to school fundraising, and we made it easy and fun for them. Again, small businesses, I know you’re always thinking, “Well where and how can I get more customers? That’s why I need to think so big.” As Dave keeps elaborating to, be the big fish in a small pond. You will be able to eat for a really long time.

Dave: That’s absolutely been, the analogy is the best way to present it in a way that you can picture it. In that think about the fence, but think about the big fish, right? Here’s another fish swimming in to your pond, trying to get your customers, all right? You’re the big fish. It’s going to be very difficult for them to get in there once you’ve already established yourself as an expert, or in our case, the people to come to that are going to be there, and deliver something that makes them look good, and is fun. Once you’ve established that type of credibility in that niche, it’s very difficult for somebody else to come into that niche, and take it away from you. That’s the whole part, the whole point of being the big fish in the small pond.

Stacey: Yeah, that’s great Dave. I think everybody gets that what niche marketing is, is being specific in your marketing. Being something for someone. Being the big fish, in the small pond. Anything else you’d add in?

Dave: No, I think that covers it. It’s the most important part of your marketing. It’s not where you spend your money, it’s how you spend your money. I would, in no case whatsoever if I were going into a new enterprise or business, just go out there and shotgun my marketing dollars all over the place trying to compete with these big guys. I would start at the other end and the niche, and work my marketing backwards so that I am the big fish in the small pond. That’s it.
Stacey: Thanks everybody. Go get started on your niche marketing.

 

Dave: Absolutely.

Speaker 3: This podcast was brought to you by Small Business Stacey, the Small Biz Marketing Specialist. What to grow your business more in the next 30 days than you have in the past three months? Get your free marketing plan at SmallBizMarketingSpecailist.com. That’s Small, B-I-Z Marketing Specialist dot com.

Leave a Reply