To Be Niche or Not To Be Niche?

It’s the age old problem isn’t it when you’re starting your business… Do I focus my business on one group of people or do I open it up to everyone and anyone  who’s interested?


The truth is all business are ‘niche’ at some level. All businesses, whether they know it or not, ‘speak’ to a certain group of people and attract a certain type of customer.


Take the large supermarkets, for example, they sell a vast array of products and services available for all types of people throughout the country and some overseas. But each supermarket brand attracts a certain type of shopper:


The Sainsbury’s shopper tends to be more affluent than average and slightly older with a higher level from the 45+ age range. In addition the proportion of shoppers without children is greater than the norm.*


The Tesco consumer spans all socio-economic and all age groups, but overr-performs in the 18-44 age ranges. It performs well for families, particularly the average C2 with kids type, larger families tending to favour its competitor ASDA. It underperforms in the less affluent groups.*


ASDA’s consumer profile is heavily skewed towards lower socio-economic groups (C2D), and amongst larger families. They are typically younger than average and 34% of consumers come from households with four or more occupants.*


Waitrose has the most affluent consumer profile of all the UK grocery retailers, over performing in the affluent ABC1 groupings. It over performs with singles and couples who fall into the “time poor/cash rich” category. In addition, they have a core of older, ‘empty nesters’.*


*Source: Design Intelligence


They are not just aware of this but make it their business to talk to and attract this kind of customer.


A niche business is a business that is targeting one very specific group of people with a very specific common shared interest or passion or desire.


Seth Godin calls them tribes.



So why should your business be niche? Why should you target a specific group of people?


The more niche you are the more relevant you are to your customers


Effective marketing starts with the customer, knowing who they are, what they want and what’s important to them. Focusing your business, products & services on a specific group of peoples’ needs allows you to establish a much better relationship with them.


  •  Talking direct to your customer is cheaper – undirected communications/advertising leads to a lot of wasted time and money
  • Directed communications – the right messages, to the right people, using the right channels – results in increase sales. You are speaking in their language!
  • New product or service research and development is geared to what this target group wants, so again, sales are maximised.


Successful niche businesses that know their customers intimately generally have higher customer loyalty because they offer them something that is relevant and which they’ve expressed and demonstrated an interest in.


Choosing the right niche for your business Well going into a bit of theory – Porter’s Generic Strategies – there are generally 3 business strategies you can employ:


  • Cost leadership i.e. ASDA, Primark, 99p Stores – Higher profits through lower costs and higher volume.
  • Differentiation i.e. Apple, Blackberry – Creating a product or service that is perceived to be unique throughout the industry
  • Focus i.e. Graze, the Dry Cleaners on the high street – Concentrating resources on entering or expanding in a narrow market or industry segment.


All businesses fit into one of these areas. Which one is your business?


If you have been in business for a few years it’s worth looking at the type of customers who usually buy from you. If the same types come up again and again, you’ve most likely managed to establish a niche for yourself.


To do better in that niche do further research into that customer. Maybe slightly adjust your marketing activities and messages to communicate with more of this group which will help to get more of them to buy from you and stay longer.


It’s very important that you choose the right niche in the first place. Even if everything is right with your business, if you’re not communicating in the right way to the right group of people your business simply will not make money.


How have you positioned your business to target a specific group of people? How has it worked for you?


If your niche market is proving to be unprofitable, get in touch and lets have a chat about repositioning your business for increased sales.



Categories : Branding, Challenges, Consistency, messages, Planning, positioning, Strategic Marketing

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