I recently read an article by HubSpot's Dharmesh Shah entitled, "Why Big Opportunities Crush Small Companies." In the article, Shah makes a compelling case for entrepreneurs and small businesses to concentrate on niche markets rather than execute a broad marketing strategy that targets all potential buyers of a product or service. His logic is sound and is borne out by real-world outcomes.The main point of his article is neatly summarized as follows:
We have advocated a focused integrated marketing strategy for our customers since our inception. Shah's article addressed the big picture reasons to focus on niche markets; this article will move from the strategic to the tactical to share some thoughts to keep in mind as you implement a focused integrated marekting strategy.
A focused integrated marketing strategy requires discipline
It requires discipline to walk away from "opportunities" that fall outside your targeted market. This is particularly true for new businesses trying to gain traction. After all, the "opportunity" might just be what you need to take you to the next level. But be careful - all that glitters is not gold. The "opportunity" will likely be a trip down a rabbit-hole that wastes your time and distracts your focus from your targeted niche.
It also takes discipline to ruthlessly qualify opportunities and tread carefully with those that don't fit your niche, have a budget for your product/service or don't have a real business problem that your company can solve. This doesn't mean that you can't share information with them or use lead-nurturing to stay connected to them. After all, circumstances change and the buyer may allocate a budget or recognize a problem that you can solve. The one element that won't change is whether or not they fit your ideal customer profile. It's okay to nurture these leads - they may refer you to someone within your niche. With respect to pursuing them actively as a customer, don't do it! Maintain discipline.
A focused integrated marketing strategy is evolutionary
Rather than be on the lookout for new customers outside of your targeted niche, keep an eye open for new niche opportunities that may arise. For example, you may be focusing on a select group of industries. In the course of your networking, you might meet someone who offers access to a specific geographic region or demographic. You should evaluate these situations based on how they might evolve as a new niche for your integrated marketing strategy. Ask yourself these questions:
How many opportunities exist within this niche?
Do the companies that compose this niche talk to each other?
Do you have relationships or specialized knowledge about the niche?
What are the costs to provide a specialized product/service for this niche?
Keep in mind that each sale within the niche makes the next one easier. In small circles, your customers will share success stories and ease the way to initiate sales conversations with other niche members.
Sometimes it's best to drop an unproductive niche
Let's say you've targeted a niche based on past business relationships and knowledge of the business practices of members of the niche. You create marketing content and sales processes to exploit the niche. But the sales just aren't there.
Your first step is to review analytics to see why the sales aren't there. Are you getting enough new business opportunities? Do the members of the niche see you as uniquely positioned to help them? Are there external factors impacting the niche that present challenges to selling your product or service?
All of these questions should be reviewed to determine if you should change your approach or drop the niche from your integrated marketing strategy altogether.
Unless your an enterprise-level business like Google or Microsoft, you should focus your integrated marketing strategy on targeted markets or niches where you can provide a customized solution designed to solve their unique problems. You should get to know this target market inside and out so that you can learn its collective problems and pain points. Develop highly-targeted marketing content, sales outreach and product/service solutions that will demonstrate that you're uniquely qualified to help. Do it all with discipline and don't chase opportunities outside of your target markets. In a highly competitive economic environment, a focused integrated marketing strategy is your best chance for success.
"Dharmesh’s Rule Of Thumb #1: In almost all cases, self-funded entrepreneurs should pursue smaller, addressable markets. The probability of early success is inversely proportional to the size of the initial market."