How To Do Niche Marketing

Today we’re talking about how to do niche marketing. You get “what” niche marketing is and “why” you should do it. What you really want to know is HOW to do it. That’s what “Small Business Stacey” and “Digital Dave” share with you in this episode.

Episode Transcript

This is really what everyone wants to know, how can I find riches in niches? How can I be a big fish in a small pond? Digital Dave, we’re going to give them some theory and some strategy but we’re also going to share some examples.

Dave: It should be fun.

Stacey: All right?

Dave: Okay.

Stacey: Great. Let’s start with how you do niche marketing in regard to some of the research that you’re going to have to do because you really want to get to know down to a very specific 101 level who you’re talking to. Right now most businesses are very broad so, Dave, how could a small business owner start to doing some research to hone in on what may be a good niche for them?

Dave: Okay, great question. In our coffee and smoothie business back in the day we had multiple lines of revenue. One of the ways you can easily niche your business is the 80/20 rule, figure out where you’re most profitable in your business. We had a lot of revenue coming in and we would look at the books and we’d see this tiny little percentage of profit after everything. What we did was that we decided, “Hey, you know what, we’re killing ourselves here, we’re working ourselves to death.” so we looked at our business and we found the part of our business that the percentage of profit was much, much greater for the amount of revenue than the other parts of our business. This was catering so this is where you can start your niche-ing. Where can I find the pot of gold?

From there, as we’ve talked about previous episodes, we looked into, “Okay, well catering is still a big, broad market. What can we do specifically to break that down even into smaller pieces to find niches?” What you’re looking to do when you’re trying to find niches is that … really two things; one is that you want to find a niche that is either profitable … I guess it could be three things, but we’ll call it two. It’s profitable or it’s following some kind of a trend, you’re riding a wave. You don’t want to be the one swimming against the current, you want to be the one that’s just sitting there on the surfboard letting the wave take you. So that’s number one.

Another way to find niches within your product or services is to look for issues. Where people … are asking you to help them and you need to find out those things.

Stacey: Right. That’s a great example. Let me share with you an example of a company that figured that out and how to do their niche. This company sells toys and you’ll be thinking, “Oh. well, everybody sells toys. You just throw up a website and sell some toys.” Well, this company realized that, one, parents don’t want this cheap stuff coming from overseas. If you watch the news every single day there’s a recall and kids are choking and these toys are very hazardous. This company realized that there was an issue, a need as you alluded to, for parents who are willing to pay a premium price for something that has craftsmanship, that’s handmade, that is not going to have these safety issues.

This company, mind you, did not have some big, fancy eCommerce site. They had a very basic online store that actually only took PayPal. When you think like “Oh well, if I’m getting so specific I have to spend all this money to do a lot of things,” you really don’t.

Dave: It’s actually kind of quite the opposite.

Stacey: Right.

Dave: What this company did is exactly what I said. They looked at their customers and they said, “Okay, we know our customers are parents. We probably know that our customers are parents with kids of certain ages maybe”. Those are the easy ones.” That’s what a lot of people would follow. They would stop right there. Well, then they went and they said, “Okay, what are the issues with toys today?” Well, there’s two as far as I can tell. The first one is the quality of the toys obviously today doesn’t seem to be nearly the quality of toys were in the past. Just my opinion. Number two is that safety was a huge concern when you hear about all these recalls and stuff.

Now it was easy for them then to take these niches and deliver their message.

Stacey: Right.

Dave: They didn’t have to spend a lot of money to do it, it actually came to them.

Stacey: Right. That’s an example of a product based business. I have another example of a service based business. I have a client who’s a realtor who was selling real estate up in the Boston area. She came to me because she just felt like her marketing wasn’t working. She was just so focused on volume, volume, volume. “I got to sell, sell, sell and be the number one agent,” and she was exhausting herself. We started looking at where her profitability was coming from and what she was really great at. Who could she serve the best?

When I started asking these questions we realized that the majority of her profitability was in two specific zip codes and she was focusing, she was the top person that people went to when they wanted a condominium with walk-ability. Up in the Boston area parking is at a premium and people just, they want to be able to walk to everything. To a restaurant, to transportation, to wherever, walk-ability.

Dave: Yeah, I thought walk-ability was the condo walks. Ha! Ha!.

Stacey: Maybe man …

Dave: No, I get it.

Stacey: As I started to listen to her more these words came out of what the issues that people wanted. Walk-ability, like you said. Not the condo walking but that they could walk to and from where they wanted to go. By helping her focus in on the niche we were able to get really specific in the marketing of who we were talking to, the messaging, and the media because then we knew exactly where those people were hanging out. We weren’t wasting money on Facebook ads and Google ads and just throwing money everywhere because we were getting so specific. She loved her business again. She wasn’t working 14 or 16 hours a day, she became a concierge realtor.

Dave: Right. Well, think about that. Think about what Stacey just said. The was a niche here, and again you want to know how, right?

Stacey: Right.

Dave: The niche was: obviously the first thing that you would look at is the demographic for those who buy condos. Probably first time home buyers in a lot of cases maybe, probably younger since they’re the first time home buyer so again you’re finding out. This is the who, and then you’re adding on the slices. You’re saying, “Okay, I’m going to just sell condos.”

Stacey: Right, because that’s a niche but we want to niche in a niche.

Dave: Right, we want to even go further than that. We want to go deeper into that niche. You could look at things like … Stacey didn’t mention this but it’s easy to go into other areas … maybe you only would market three bedroom, two bath condos. That can even be a smaller niche within a niche because probably the people buying that have a slightly different need than somebody buying a one or a two bedroom, they have kids.

Stacey: Exactly.

Dave: They need the extra space, they need the extra bathroom. The walk-ability is huge. That’s saying that I only want people that likely don’t have a car. They don’t want a car. Maybe they just decided they want to be an urbanite and ditch the car and have everything within walking distance to where they live. You can even take your demographic information and break that down more within your product itself into smaller niches.

In this particular case this client is working less hard, she’s got that fence out there around her people. She’s got a herd, that herd is not huge and when she delivers her message it’s very, very, very specific to who that message is going to go to. Her response rate is much, much better than trying to do it at a much bigger level.

Stacey: Right, because now she is the go to person. Somebody looking for that specific condo and that specific zip code, she is the person.

Dave: There’s another perfect example of how you can look at a business and break it down into niches.

Stacey: Great. We’ve shared some examples, Dave. The small business owners out there are saying, “Okay, I’m looking at my business. I see a lot of opportunity, but I’m not quite sure maybe what some of the needs and challenges of who I’m serving may be.” How could they do some research? Are there tools out there that these small business owners can use?

Dave: That’s an absolutely fantastic question, my favorite one, by the way. We talked about the three … two ways that you can kind of do some research in the beginning so I’m going to expand. The first one is look at your own business, but we’ll call that look at your own business and look at the trends within your business’ industry. You would want to maybe first look at something, a tool like, something like Google Trends, which is a free online tool.

Stacey: Trends.google.com.

Dave: Trends.google.com, they change these things all the time. You can go in there and you can type anything. You could type two or three bedroom apartments in Boston in there and it will actually give you a projection of the number of searches that have occurred over time in that particular keyword, in that area. What you’re looking for obviously is a graph that’s got an uptrend to it.

Stacey: Right.

Dave: We want to ride that uptrend, that’s the whole idea is that you want to ride that wave. One way to look at niches is to go in Google Trends in your industry, pop in a bunch of what you call niche keywords, products, things like that, and try to find within that industry, maybe some areas where things are up trending rather than down trending. Again, let’s look at real estate in two seconds quickly. I don’t know much about the real estate industry these days, but let’s just say I search single-family homes and all of a sudden I’m seeing a flat line or a downtrend.

Well, that tells me that maybe, if I’m going to pick a niche to sell real estate in, that that one may not be the one right now I want to go into. Then I go in and I search three bedroom condos with walk-ability and it’s pointing straight up, that’s easy. Now you’ve found a very, very specific trend within your industry or even within your product or service. That’s one way. Now, another way we talked about which is the second way is to look for issues within your particular product or service. When people have issues they’re looking for solutions, it’s that simple. What your objective is, to deliver the solutions. You’re going to put those solutions out there.

In the services business I don’t have any examples right off the top of my head but in the product business one of the things that you can use very easily to find issues is Amazon.

Stacey: Yeah right. A small website called Amazon.

Dave: Small, small little Amazon. One of the things they do is they collect reviews of your products. If you sell a product that is on Amazon … which if you sell one that’s not on Amazon you’re lucky or there’s no competitor on Amazon I should say, in those reviews you can look for reviews that are what? Bad. Not good, not the good reviews because if they’re good reviews they don’t have a problem.

Stacey: You’re right, that’s right.

Dave: You want to look at the one and two-star reviews on those products that are in the niche that you’re looking at and you can very clearly and quickly figure out where some issues exist. Now, in looking in the reviews it’s easy to spot issues. One of the things I ran across the other day was … I was looking at Hawaiian shirts and I was looking at bad reviews. One of the reviews said this shirt was terrible. I put it in the wash the first time and the colors bled together.

Stacey: There is a problem.

Dave: There is a problem right there.

Stacey: That perhaps somebody could fix.

Dave: Right. One of the things you can do is market to that problem. You could market saying that my shirts are washable hundreds of times without the colors bleeding together. You solved the problem for them. Very easily within your market and within your product you can address and find the issues by doing some simple research, say for instance on Amazon. Now, for services it’s a little different. Stacey, do you have some ideas on services of where they can go do some research?

Stacey: Right. Amazon is good for product based businesses but if you’re a service based business some sites that you can do your research on would include Yelp. A lot of service based businesses are on Yelp or Angie’s List or contractors are on Home Life. There’s all these different service based review sites out there, and again, not looking for the five-star reviews because somebody’s already meeting those needs. It’s the one and two-star reviews that say this group of people are not happy and if you’re able to provide a solution, wow.

Dave: An example would be, long lines at restaurants. I’m just guessing here. I went there and I waited an hour and 50 minutes to get in they’re probably not going to give a great review, they’re going to give a not so good review. What you want to do is find that repeatedly within the reviews from different restaurants. Then your message, your niche becomes, “Hey, we’re the restaurant with less than a 10 minute wait.” You’ve addressed the niche, a problem. That’s a good problem to have sometimes to have a waiting list but people aren’t going to probably want to wait an hour and 25 minutes to get in. This is a good way to take an issue and make it your niche.

Stacey: Right. Okay, so we’ve laid the groundwork for some ways that small business owners can do some research either looking in at their own business and honing in on that 80/20. Where is your revenue, but more importantly the profitability and you’ll probably find a niche within there. You can use the tools that Dave referenced to do some research and/or you can just go out and create your own niche. You may find that there’s opportunities out there.

Now, what a lot of small business owners do is they start with the product or the service. I do this, I sell toys or I fix sinks and plumbing, and then they try and find a niche. I have this, who wants to buy it, where it really should be the opposite. It should be finding the niche, who has a problem that I can solve?

Dave: It’s that simple.

Stacey: Right, so that’s actually what we did in our coffee smoothie business. We were working with companies of 50 or more employees who wanted to do staff appreciation. We would go in and do our smoothie catering but then we had the niche, they came back to us and said, “Can you do this, can you do that, can you do coffee catering for us, can you do hot chocolate, we want to do something else.” It gave us a year-round revenue stream that we didn’t have before because we listened. It’s another way of how to do niche marketing.

Dave: Yeah, listening to your customers is always very important.

Stacey: Yeah.

Dave: Sometimes they’ll even tell you a niche, I think that’s what Stacey’s saying here, is in our coffee and smoothie business once we had our herd around the people, around our tribe, for lack of a better term, they came back to us. They were like, “We want to use you. We know, we like, we trust you, you show up. Your people are responsible, they’re on time.” All these things play into that, they were telling us some other things that we should be doing. We investigated those and some of those we found to be very, very good ideas. Niches such as offering hot chocolate catering in the wintertime to supplement our smoothie business which is more of a seasonal summertime business.

Again, listening to your customers on an ongoing basis is another great way to find how you can find riches in niches within your own business.

Stacey: Right. Getting a little bit deeper into the how. We’re really focusing on the who, you’re figuring out the specific person that you want to talk to, I call it the customer avatar. You should know that person in depth, they should have a name. You should have a picture of them in front of you. You should know those issues, their pain points, what they like, what they don’t like because when you get this right you are having a one-on-one conversation with them. You will know what to say and where to say it.

We have a tool that we use, a customer avatar worksheet that will help you work through this what questions to ask. Let me give an example before I tell you where you can get this. I had another client who worked with dentists and they came to me because they were saying, “I’m doing all this marketing, but I’m not really seeing any results.” Again, when I started diving deeper they were sending the same message to everybody, but they had in their database, when I started digging deeper, they had people as young as people just coming out of dental school starting their practice and yet people who were on the way out looking to retire.

This dental business, they were actually teaching dentists how to invest in real estate, somebody just coming out of school building up a practice is in a much different place and may or may not be interested in investing in real estate versus somebody who is looking to sell their practice and what am I going to do with the rest of my life.

Dave: Right, right, exactly.

Stacey: We quickly realized that there were six different avatars within their database and so we got very specific with this customer avatar worksheet of what their needs were, who that person was, where did they live? What were their needs, what kind of words could we use that would resonate with them? Now we’re having one-on-one conversations and as you might imagine their marketing is working.

Dave: It is that simple, it is literally that simple. You really need to address and create a roadmap. We’ve done this multiple times where you work through this worksheet all the way down to the point of how you’re going to get to these people, like what types of marketing you’re going to be able to find these people on and actually reach to them with a message that is very specific to their issue. I think that’s what Stacey’s saying on why this worked so well for this dentist.

Stacey: Right. We want to give you this worksheet for free, you can download it by going to smallbizmarketingspecialist.com/show18. You just download it and walk through, creating your avatar so you can have that one-on-one conversation.

Dave: Sounds good.

Stacey: Great. Anything else you want to add, Dave, about how to do niche marketing?

Dave: No, that’s all. No, we’ve given them everything.

Stacey: Okay.

Dave: I shouldn’t say that, there’s way more to it but we’ve given you want we can for this show.

Stacey: We’ve given you the stepping stones of how to do niche marketing. We hope you enjoyed this episode. If so, we would be truly grateful if you would leave us a review and/or subscribe to our YouTube channel. Anything else you want to add in regard to that?

Dave: No, that’s all for this episode.

Stacey: All right. Go out there, find some riches in niches, be a big fish in a small pond and love your business again. Signing off here Small Business Stacey and Digital Dave. See you next time.

This is “Small Business Stacey“, your Small Biz Marketing Specialist, here to help your business grow to seven figures and more by helping you become a #SmallBizMarketingWiz

About Stacey Riska

Stacey Riska, aka “Small Business Stacey” is a serial entrepreneur who is passionate about saving small business and rebuilding Main Street. She helps small and local business owners become a #SmallBizMarketingWiz by teaching them marketing strategies that get MORE: MORE leads, MORE customers/clients, MORE sales, and MORE money. Stacey is the founder of Small Biz Marketing Specialist, THE go-to place for marketing tips, techniques and strategies that get results. Stacey is also the creator of the Daily Deals for Massive Profits Training Program, an online video training program that teaches small and local business owners how to use daily deal sites like Groupon to skyrocket their business growth and get massive profits. In this program she teaches from experience, as it was the key strategy that transformed her coffee and smoothie business from being $500K in debt to a 7-figure profitable business. When not saving the small business world, she enjoys sipping red wine, eating chocolate (who doesn’t!) and spending time with her amazing husband.