SME Branding Lesson #13 – The Power of the Niche
Widely publicised in recent years, one of the most popular choices for entrepreneurs is niche marketing. Whilst I would be careful with the trend of ‘finding a niche and building a website around it’, I think if a business has established a differentiating factor that sets it apart, the targeted approach of a niche brand may be the next step in securing brand loyalty and higher profit margins.
What is a niche brand?
In simple terms, a niche brand is a brand that addresses the need for a product or service that mainstream brands don’t provide for. It is a very specific brand appealing to a subset of the market.
Niche brands often withstand market forces better because they have increased brand loyalty and a prime position within their market segment.
A niche could be a luxury brand, such as Rolex or Hermes who only target the richest consumers – or it could be a shop selling household products for people with dermatitis, e.g. catering for a very specific need.
Some niche brands on or off the high street
The following are just a few samples I would consider niche brands – though some have made the break-through into the mass market.
How can you find a niche?
Start with market research. If you don’t have a specific product yet, you can use a variety of online search tools to find out what consumers are interested in and if there is a range of products or services that can cater for their demand. You can use free tools, such as the Google keyword tool, to find out how many people search for a specific keyword and to find related terms to give you more ideas. Find something that has a good balance of demand and supply, so you can easily become the market leader and have sufficient interest in your product.
If you already have a product or service, consider the following: Which market are you in? Who are your customers? Think about to whom your product mostly speaks. What problem does your brand solve? Is there a recurring customer profile that works for your business?
Without trying to please everyone, you can become a market leader in a specific sub group and compete through your expert knowledge of your customer’s requirements.
Why should you find a niche?
In terms of branding, a niche means you automatically target a very specific segment of your target market, and thus you will be presented with some great opportunities of engaging with a willing crowd of enthusiasts. I just remember my interview with Steve from phILOFAXY, which gave me great insight into the nature of those Filofax fans – you could not wish for better brand ambassadors!
Niche brands have the appeal of being expert and serving the individual, so you can benefit from better margins if your brand is right and from stronger loyalty if you fulfill your brand promise.
That also means that niche brands are often more resilient in a more difficult financial climate. And if your business is built on being profitable without needing mass sales, a drop in purchasing is not going to affect you as severely as mass product brands that suffer when the general public tightens their purse strings.
Building a niche brand also means that you have more opportunities within a chosen sector to become the expert, the market leader, the one to beat – and benefit from interest where big brands won’t bother because it is not worth their time and investment.
Any help out there?
There are a number of pod casts all around niche branding which are very interesting to listen to and who discuss a wide array of subjects relating to finding and marketing a niche brand. Of course you can always talk to me, too… 🙂
Internet Business Mastery
A lot of niche websites rely on internet marketing which both these pod casts address nicely. Any more gems out there, please let me know!