Any business with a target to grow sales in a niche market faces a unique set of challenges. Unfortunately, most marketing advice and literature focuses on mass markets and little information is available on marketing to a niche.
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’. Breaking that definition down product may be replaced with service. Small means there are relatively few prospects in the niche and well defined means that a niche does not exist at all unless it can be clearly defined with no ambiguity.
A niche must be quantifiable and measurable, accessible and, both of sufficient size to be viable and growing at a fast enough rate to sustain sales growth.
Niche marketing has many advantages including less direct competition and lower sales and marketing costs but there are also major challenges including:
- A small number of customers/prospects.
- Ensuring the message is heard.
- Relatively small number of opportunities.
The Problem With Niche Marketing
The blunt truth is most marketing is shotgun based. That is aim to hit as many targets as possible in the hope a percentage (often a single figure percentage close rate is deemed a success) will respond.
There may be lots of talk about segments, targetting, opt in, pull marketing and focused content. The reality for B2B businesses with a large potential customer base is often somewhat different.
In any market niche, there are simply insufficient prospects to employ the shotgun approach. In some cases, there may be less than 200 customers in a niche 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 and tracked. Any business attempting to grow sales in a niche market must try to obtain a request to quote on a high proportion of the available opportunities.
Which 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. Those major suppliers will most likely not be direct competitors but delivering other parts (perhaps several parts) on a project.
Larger suppliers may deliver significant parts of the total package required by the customer. With their brand presence and resources, they may dominate the conversations with the project decision making team.
A Potential Solution
Mass marketing does bring economies of scale. Niche marketing tends to be more focused and the cost of each conversion can be relatively high. It is therefore important to establish if the returns per customer justify that investment. That often means each customer must have a high potential value.
A well thought out strategy is of prime importance. Delivering a general message is not a viable way forward. Instead, it is important to precisely define the niche, the specific offer the business provides and why (exactly) it satisfies customer needs.
Armed with this information on the benefits the business can offer 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 key functions and personnel within those customers that may influence the purchasing decision.
The challenge then is to deliver the message on what benefits the business may offer to as many potential customers (and the key departments within those customers) as practical. What are the key information requirements of each of function and what is required to remove any roadblocks that may be thrown in the way of a sale.
It is important to identify and track key projects that each key customer may be bidding on. If the customer wins a contract it is important to be ready and in a position to make a specific offer that addresses the challenges the customer may face.
To achieve the above it is important to accept the customer is in control. All the business can do is ensure they deliver the support the customer needs to understand how the solution on offer can solve whatever their problem may be.
Sales should have the direct customer relationships and therefore have to 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 the required information, build credibility and start an ongoing communication process.
Of course, that assumes sales have made some inroads into a customer. For customers where sales have a weak presence or worse no presence at all, there is the problem of growing awareness in a crowded market.
Every effort should be made to secure press coverage in the form of press releases and feature stories in relevant publications to push the message to the target market 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 journalists.
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, it is probable those searches will be specific and either carried out online (in most cases) or by reviewing specialist publications. A web presence focussed on delivering information to any prospect typing in a specific search term is essential.
There is no doubt growing sales in a niche B2B market is difficult. Buyers and those that influence the buying process tend to perform early supplier evaluations before engaging with sales tends to 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.