81% of SMEs want and need an external marketing agency to help them grow their business. But the global creative agency market is increasing by 8.82%, making competition stiff. To stand out among your competitors, your agency needs to niche down your brand. We’ll cover why this is critical to remain relevant and generate leads.

What Does It Mean to Niche Down Your Brand?

A niche is a smaller market segment for marketing your products or services. You target more specific niches within your larger market segment when you niche down. Selecting a smaller niche allows your brand to focus its value for its customers.

By targeting a niche, you’ll be able to tailor your branding and marketing efforts to how your product adds value through solving pain points, become an industry expert within your niche, and stand out from your competition.

Benefits of Focusing Your Niche

Focusing on a specific niche for branding and marketing is critical to all businesses. Here are just a few of the benefits Business News Daily identified:

• Higher ROI: When you target quality leads, you’ll see better conversion rates which lead to higher ROI.
• Increased Customer Loyalty: When you can speak directly about how your product solves your niche’s problems, then you stand out as an industry leader and garner customer loyalty.
• Reduced Competition: When you focus on a smaller market segment, your competition decreases because your brand differentiates from mass brands, where larger generalized marketing campaigns can get lost.
• Reduced Marketing Costs: You can target your ads and campaigns specific to your audience’s needs instead of broader efforts, decreasing advertising and promotional costs.
• Increase Industry Authority and Expertise: You can establish your business as an expert in the smaller niche and build trust with potential customers.
• Increased Profits: You’ll increase profits through better conversion as you target your product positioning to meet the needs of your specific customers and leads.
• Increased Efficiency: By focusing your position on a small market, you’ll find ways to be more efficient in the space.
• Faster Growth: By targeting a niche, you’ll gain customer loyalty and industry expertise, which grows word of mouth, leading to rapid growth and more substantial leads.

Risks of Niche Marketing

You need to be aware of a few risks before you decide to niche down. By understanding the risks, you can do the necessary research and validation to find the best niche for your business:

• Smaller Market: It can be scary to reduce your target audience to a smaller segment. You’ll want to validate that the niche you choose is profitable.
• Higher Return on Investment Isn’t a Sure Thing: You’ll want to test conversion rates on niches to ensure you get the ROI you want before you commit to the niche.
• Becoming Too Niche: Researching and testing will validate whether the niche you’ve chosen is too small because there aren’t enough customers searching for targeted keywords.

Is it Better to Niche Down Your Brand?

Yes. While the risks exist, you can avoid most of the pitfalls through testing and researching which niche will be the most profitable and viable. Targeting your branding will always give you the advantage of differentiating your products and services from the competition.

When customers can quickly identify how your brand does it better, you’ll become an authority in your niche and attract potential customers from broader segments. If you don’t niche down, your brand runs the risk of getting lost and losing relevance with customers.

How to Niche Down Your Brand

Here’s a step-by-step guide on how to niche down your brand:

1. Identify All Your Potential Sub Segments

You must first identify all the market segments to which your products or service may appeal. You can start broad, but then you’ll want to narrow down sub-segments within each market segment. You’ll want to choose segments where your business is knowledgeable and then identify sub-segments.

2. Target the Right Segment

Looking at all the segments that fit your business, find the right segment where there are market gaps that your business solutions could meet the needs. Is this sub-market segment looking for solutions, and is the market big enough to generate significant revenue?

3. Position to Solve Pain Points for Your Target

Your business solutions need to solve the pain points that the target audience currently experiences. To do this, you need to understand your audience’s goals, needs, frustrations, motivations, and expectations. This enables you to identify their pain points and can create a marketing campaign that positions your business as the solution to their specific problems.

4. Identify Competition in the Segment

You’ll want to analyze the competition within your niche. Is the space crowded? Can you position your business to stand out as an industry leader? How does your business compare, and what do you do better? Will it be harder to penetrate the competition that already exists?

5. Determine if the Niche is Profitable

You’ll need to answer these questions:

• Does the audience in your targeted niche pay for what your business offers? 
• Is the audience base strong enough to support your business? 
• Are there additional services, subscriptions, or products that can create recurring purchases from repeat customers and grow your word-of-mouth in the segment?
• Are customers looking for your products or services?

6. Do the Market Research

You’ll want to validate whether the niche is profitable and sustainable. Ask your existing client base by adding market research questions when they first purchase or repeat purchases. You’ll also want to A/B test different niches to see where you gain the most traction and conversion. Utilize social media and forums to conduct market research in your niche to see if your solutions will appeal to the community.

Niche Down Your Brand for Improved Positioning and Growth

You’ll grow your business faster by focusing your marketing on a niche market segment vs. broader markets. By targeting a smaller market, you gain industry expertise, customer loyalty, and greater ROI. But before you decide on your niche, make sure you research all potential niches, assess the competition, and viability of the market.

Twiz facilitates partnerships for increasing revenue through referrals. Our targeted approach helps your business reach more potential customers through strategic partnerships within your niche.