A niche market is defined by the Chartered Institute of Marketing as ‘marketing of a product to a small and well-defined segment of the marketplace’. A niche must be quantifiable, measurable and accessible. It must be of sufficient size and growing at a rate to justify the allocated marketing and sales resources.
Niche marketing has many advantages including less direct competition and lower sales and marketing costs. However, there are also major challenges that include:
- A small number of customers/prospects.
- Ensuring the message is heard.
- A relatively small number of opportunities.
The Problem With Niche Marketing
The blunt truth is most marketing is shotgun based. That is to try to hit as many targets as possible in the hope a (small) percentage will respond.
In any market niche, there are insufficient prospects to use a scattergun approach. In some cases, there may be less than 200 customers in a niche market, which means mass marketing techniques simply will not work. A small number of customers usually results in a low level of opportunities. It is therefore essential all potential opportunities are identified, tracked and serviced appropriately.
Niche marketing tends to be more focused and the cost of each conversion can be relatively high. It is important to establish if the returns per customer justify that investment. That often means each customer must have a high potential value.
This leads to another problem, that of being heard. In B2B markets a specialist product or service may need to compete for attention in a space dominated by larger suppliers. With their brand presence and resources, they may dominate conversations with decision-making teams.
Profiling And Targeting Potential Customers
A well thought out strategy is of prime importance. Delivering a general message is not a viable way forward for a niche supplier. Instead, it is important to define the business offering. Clarifying exactly how it satisfies customer needs.
Armed with information on the benefits the business offers and a precise profile of target customers it should be possible to identify all potential customers in the niche. The next step is to define the main functions and personnel within those customers that may influence the purchasing decision.
What are the information requirements of each department or key decision-maker? What is required to remove any roadblocks that may be thrown in the way of a sale?
To achieve the above it is important to accept the customer is in control. All the niche sales team can do is ensure they deliver the support the customer needs.
Sales should have direct customer relationships and therefore lead the process. Working hand in hand with marketing to provide the market intelligence and information needed to progress the sale. The objective should be to supply information, build credibility and start an ongoing dialogue.
Delivering Key Messages To The Niche Market
There is no doubt growing B2B sales in a niche market is difficult. Where sales have a weak presence or worse no presence at all, there is the problem of growing awareness in a crowded market.
Buyers tend to perform early supplier evaluations before engaging with sales. This put them in control rather than the supplier. However, with a well thought out strategy in place a sales and marketing team working in harmony and a solid communications strategy those difficulties can be overcome.
Every effort should be made to secure press coverage in the form of press releases and feature stories in relevant publications. In one respect it can be difficult to obtain coverage in a market dominated by major brands but on the other, a story about something outside the mainstream is often of interest to the media.
It is highly likely prospects in the niche will be searching for information on the product or service offered by the business. For a niche product, searches will probably be specific and either carried out online or by reviewing specialist publications.