Jack is a marketing consultant. He’s worked with lots of companies on lots of projects.
His clients have been Fortune 500 companies, middle market companies, and even a few start-ups. His projects have been strategic plans, new product introductions, branding strategies, market analyses, pricing studies, and many more.
Jack enjoys his work. He likes the variety. He is constantly exposed to new ideas and new people. It’s fun.
But Jack has a problem.
Colleagues consider him, well, a “jack-of-all-trades and master of none.” They don’t know how to refer him.
Jack needs a niche.
What is a Niche?
Here is a definition in BusinessDictionary.com
“A small but profitable segment of a market suitable for focused attention by a marketer. Market niches do not exist by themselves, but are created by identifying needs or wants that are not being addressed by competitors, and by offering products that satisfy them.”
Your niche is defined by what you offer and to whom. It can consist of any of the three combinations below:
- Service Offering +Target Market
- Service Offering + Problem/Situation
- Service Offering + Target Market + Problem/Situation
Here are four examples:
- Target Market – The accounting firm that focuses on expatriates
- Problems Solved – The online marketing firm that specializes in companies reaching baby boomers
- Service Offering – The IT firm focusing on Fortune 500 companies with high risk/high reward projects
- Fee Structure – A law firm that offers fixed price project fees in an industry that bills by the hour.
A Niche: Why You Need One
The best reason to specialize is that you’re more likely to be successful.
In their book Spiraling Up: How to Create a High Growth Professional Services Firm, Lee Frederiksen and Aaron Taylor argue that the fastest growing and most profitable firms position themselves as specialists. These firms have a well defined target market and a well defined set of services. This clearly differentiates them.
Key findings from their interviews with hundreds buyers and sellers of professional services are:
- Specialist firms grow nine times faster and are 50% more profitable than generalist firms
- High-growth firms are three times more likely to have a clear differentiator than their slower growing peers.
Another advantage of specialization is connecting with the right people…. faster. Specialists have much more efficient business development efforts than generalists.
So, let’s review the advantages of a niche:
- Well defined target audience = Focused prospecting effort
- Clear message = More referrals to great opportunities
- Effective networking = Meeting the right people faster
- Efficient marketing = Reaching the right people for less money
But I Don’t Want to Limit My Options
A common concern I hear from professionals is that a niche will limit their opportunities. Actually, a niche may increase and/or improve your opportunities.
I would argue that you could get more referral because colleagues will actually understand what you do. Even if you get fewer referrals, they will be better referrals i.e. better opportunities
And remember, having a niche doesn’t preclude taking on a variety of projects when asked. You can work on lots of things.
But position yourself as an expert who works on only a few things.