The book Battling Big Box referred to four niche marketing myths identified by entrepreneur, speaker and author Harvey Mackay which I thought were well worth telling you about.
Many business advisers and marketing experts say “get a niche” without saying much about how to choose a niche.
Let’s Go Niche Marketing Myths-Busting:
- Myth one – a niche market has to be chic.
- Myth two – a niche has to be new.
- Myth three – a niche shouldn’t be too narrow.
- Myth four – a niche has to be neat.
Now let’s dig deeper into each.
Niche Marketing Myth 1 – A Niche Market Has To Be Chic
This is nothing to do with Nile Rodgers disco band called Chic in the 1970s although Chic were leaders of the disco music niche.
Chic normally means stylish or smart. If you want to build a business to be proud of, then the temptation is to pick something fashionable and potentially also move your business upmarket.
If you wanted to own a hotel or restaurant, wouldn’t you prefer it to be chic?
But it may not be where the money is.
There’s an old Northern English expression that says “where there’s muck, there’s brass” and brass means money. This line of thinking suggests that there’s a lot of money to be made doing jobs that other people think are dirty or unpleasant.
When I was a trainee accountant, I audited a local Funeral Director’s business, and I was shocked by how profitable it was. The thought of doing the work – although much needed – makes me shudder but it does prove the point.
To prove the myth wrong, that niches have to be stylish, you don’t even have to go from one extreme to the another. Everyday ordinary things may provide an opportunity for a successful niche. The book mentions Turtle Wax for cleaning cars and Harvey Mackay built a huge business selling envelopes.
Niche Marketing Myth 2 – A Niche Has To Be New
There’s a temptation to think that you’ll only find niche marketing opportunities in new markets.
Markets are in a constant state of movement:
- Customer needs, wants and populations change.
- Competitors change – some competitors leave the industry sector, others lose their niche appeal by chasing growth and new competitors enter the market.
- The wider business environment changes – there are many markets that looked good five years ago (property as an example) but these crashed in the 2008/9 recession and have stayed in the doldrums.
Niche marketing positions can emerge if you’ve got the imagination to spot them, or they can be vacated when the incumbent steps away.
In declining industries, the decline can be very unpleasant and involve lots of red ink but the position of being “last man standing” can be very profitable and explains why some players in declining marketers will help competitors to leave the market.
Niche Marketing Myth 3 A Niche Shouldn’t Be Too Narrow
I talked about this in my article on niche marketing and differentiation.
You can work in a niche market but it doesn’t mean that you don’t have any competitors in that niche. A big niche often creates the opportunity for micro-niches with products and services designed for an even smaller group of customers with special needs.
Take my business as an example. I help small business owners to differentiate their businesses from competitors and that will often involve focusing in on one niche.
I am a specialist as an expert in differentiation and the variety is something that I love but I know that a rival coach or consultant could specialise in differentiation for hotels and restaurants. That’s two markets I am interested in so it could hurt my positioning. On the other hand I think there’s potential for a contradiction because industry specialists can apply industry recipes and in effect create local clones, much as a franchising business might do.
There is a risk that you can focus on a niche that is too narrow. The essence of niching is captured in the idea of bullseye marketing – a highly targeted match of what the customer wants and what you offer. Some times the bullseye is too small and you need to focus on the next ring out on the target.
Niche Marketing Myth 4 A Niche Has To Be Neat
This may seem a contradiction since you establish a niche position so that customers have a very clear understanding of what you offer and what makes you special but a couple of examples will help it to make sense.
The book talks about liquor stores in affluent areas that sell specialist wines but also sell a lot of popular, low-priced wines. The reason is simple, people want variety and just because customers can afford the most expensive bottles, it doesn’t mean they want to drink vintage champagne every night. Sometimes a couple of glasses of a pleasant, fruity plonk is all they want.
A second example is my own business and that of many other business advisers. While we can focus on a specialist subject, the relationship can easily move to trusted advisor because we get to know the owner and the business so well and our knowledge base often has to be broad to understand how the speciality fits in with other situations.
Are There Other Niche Marketing Myths?
Yes I think there are.
That you must operate within a niche market is a myth.
You can differentiate your business across a wide market and appeal to many customers. In some cases you don’t even need to think about niche marketing and differentiation because the business opportunity creates its own local pocket of demand.
The easy example are local shops and pubs. If there’s a gap in the market – perhaps because a business has closed (although this may be a warning sign) – then you can open and sell all the usual stuff without any consideration of these concepts. The geographical location creates its own local monopoly.
In the UK TV soap Emmerdale, The Woolpack is the only pub in the village which gives it a big advantage but it does have some indirect competition. Eric Pollard’s restaurant at the B&B and the cafe give villagers plenty of opportunity to eat out when they don’t want to cook for themselves.
Are there other myths of niching?
Do you agree or disagree with the myths identified?
Please let me know by leaving a comment.