Niche marketing. It's another perfect example of why conventional marketing books are ineffective for business owners in small towns. And a perfect example of why I wrote my book.
What exactly is "niche marketing"?It's the process of taking a large group and separating out a small portion that has a need for a particular or specialized product or service. It's specializing to a specific target within a larger target.
What part of this equation is missing in a small town? Right...the large group. Small towns by their very definition are small groups. If you start separating a small group to begin with, all you have left is an even smaller group. The smaller the group, the smaller the economic opportunities will be.
Are there other small town niche marketing problems?Yes. You must also consider your "cost per customer." The smaller the group the more costly it is to reach them in a small town. Why? Because small towns don't have the media choices available in large cities. Some towns won't even have a newspaper or radio station.
Here's one example. Let's suppose you are doing a targeted direct mail to a small niche market you have identified. You may have too few mailers to qualify for any significant postal discounts. You probably won't be printing quantities large enough to qualify for any volume discounts. To reach a small niche market you are going to pay more than reaching the total market.
You might as well run an ad in the newspaper that reaches everyone in town, but is targeted to your niche market.
OK. I'm still reaching my niche market, what's wrong with that?One word...positioning. Another danger in a small town that differs from a large city. You should be trying to position your company or service in such a manner that when someone mentions your product or industry, they should think of you. I know that's a long sentence. Go back and re-read it again.
In the case of niche marketing, you want to take a group and show them something just a little different. You also want to do this without disturbing the rest of your target market. A tall order in a small town. Why? People in small towns talk to each other more than in large cities.
So, they talk to each other. What's the worst that could happen?Suddenly, your niche market gets an offer your mainstream market doesn't and both markets are now confused. "Did you get the mailer from XYZ?" "I thought they did this." "Are they changing?" "Is the business in trouble?" "We better look for a back-up alternative just in case."
Ok, I'll admit that the above may be a little overly dramatic. The point is, that the perception of your business, and what it does, in the mind of the customer, is critical in a small town.
You spend a lot of time and money to give your business an image that is attractive to your target market. You can't be all things to all people but be true to your bread-and-butter...your target market. (See: How To Develop Your Position Strategy) and re-read Chapter Seven of my book.
So, niche marketing doesn't work in small towns?I didn't say that. But you must be careful with both the message and the group(s) it's directed to. In many cases, it isn't so much that it doesn't work, as much as niche marketing may not be necessary.
Break it down to the basics.If you want to be successful, look for someone who is successfully doing what you want to do, and emulate them. Is someone in your town using niche marketing? Are they sending different messages to different groups? What is the reaction among your group of acquaintances? Are there mixed messages about what the company does? Or, are they successfully positioning themselves as two or more entities. (Very difficult, here's why)
Why niche and positioning work as oppositesIf you're in the United States and I say soup, most people would say Campbells. However, if you're in the UK, most people would probably say Heinz. In the US Heinz is catsup, in the UK it's soup. Once you have, in your mind, the perception of what a company does, it sounds strange if another answer is given.
Would you buy the IBM lawn mower? Betty Crocker Motor Oil? Chanel #5 fertilizer? The image of the company name doesn't fit the product...according to our perception. There is nothing worse than altering the perception of your company in the minds of the consumer. It actually feels uncomfortable.
Are there any positives about niche marketing?Of course. When done correctly it can open whole new profit centers for you.The best example is the ability to target a completely different industry from your primary market.
For example, you have a sandwich shop. You are located near a University. During the school year your business is composed primarily of students. During the summer your business drops off.
You decide to buy a used van, hire a driver and make the rounds of construction sites and office buildings that are not within walking distance of restaurants.
You pass out coupons and sandwich menus (even free samples) as you make your rounds and take orders for delivery the following day. If you are successful, expect competition.
This niche marketing should not effect your school business because these people will rarely come in contact with each other. You can offer one group some special discounts that you wouldn't want to give the other.
The Last Word On Niche MarketingMy primary job at this website is to create some questions to make you think about the subjects I cover and consider all your options. Don't just read a book on any business subject and throw caution to the wind and put it into practice without careful thought and planning. What's the best thing that can happen? What's the worst?
You may get the impression from this article that I am not a fan of niche marketing. That's not true. Niche marketing can and does work well in certain circumstances. There are certainly enough books and articles written on the subject. But, like many "theories" proposed by the "experts" small towns are often the exception to the rule. (Main Menu)
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