09/ 20/ 2006
The Expert:
Ed Grubb
President and Co-Founder, Network Alternatives
www.network-alternatives.com
Langhorne, Pa.
Choose a niche to propel your business' growth
I consider myself very lucky. When I started my small business in 1999, along with two partners, we quickly defined our target customers. The idea for our business actually spawned from a problem we kept seeing at our old company. Our clients, mostly small- to mid-size law firms, were wasting too much of their time in the IT business. So we came up with the concept of helping them get out of the IT business by outsourcing their IT operations to us.
In the last six years, Network Alternatives has grown from four employees to 24--and we did it by sticking to one niche: law firms. That's not to say we don't have clients in other industries, we just don't deliberately market to other types of businesses. As a result, 85 percent of our customers are law firms, and that's where we focus our energy.
When you're first starting out, there's something to be said for casting a wide net: You never know what you're going to catch. But the sooner you can narrow your focus, the more efficient you'll be in marketing your products and services. Without a niche, you lose a good opportunity to use your reputation and market awareness as free marketing tools. When selling to potential customers, we're able to leverage the fact that we already work with other firms that face similar challenges. And oftentimes, that's enough to make the sale.
By marketing to one group, we've also been able to establish ourselves as an industry expert. We host quarterly educational seminars for attorneys and office administrators, and we also speak at legal trade shows and conventions. Our customers think of us as providers of valuable information--not just an IT solution.
Niche marketing is great, but before you narrow your focus too much, make sure there is a legitimate need and a sizable market. Your niche needs to be accessible, and your products and services shouldn't be easily threatened by large businesses. If the niche can't satisfy these criteria, you may want to generalize your marketing strategy. Otherwise, you might appear to offer value to your target market--but no one else. We've had potential customers say, "We're not a law firm, so you couldn't help us." For us, that's a risk worth taking because of the growth potential within the legal community. But if you don't see significant opportunities within your niche, narrowing your focus could backfire for your business.
The benefits of niche marketing
- Targeting a smaller audience stretches your marketing dollars further than marketing to the masses.
- You have a greater chance of being recognized as a sought-after expert in one specific field, which gives you credibility--and a better chance for customer referrals.
- You can't be everything to everyone. Focusing on a niche will give you the opportunity to hone your skills and improve your service.
How to get the most from your niche
- Capitalize on your expertise by offering to speak at seminars your target customers attend. This positions you as an information provider instead of just a solutions provider, and helps you create an ongoing relationship with customers in your target market.
- Find out what trade groups or associations are in your niche, and get involved. Purchase booth space at their conventions, offer to sponsor events or even contribute articles to their newsletters.
- Don't assume customers will refer their colleagues to you. Use formal client testimonials and case studies to market to potential customers in similar industries.
