Grand Business Decision– To Niche Or Not To Niche? A Niche is All About Being Narrow, Not Small…

Business is about targeting a market… it’s about getting the right product to right customers at right time with right message… and for many businesses it’s about identifying a market niche… However, not many people are quite sure what a ‘niche’ is…

According to Val Nelson; it’s that sweet spot where a product or service best satisfies the specific expectations of a specific grouping of customers… It can be a subset of a larger market, or segment of a market, or the market itself… The market niche defines the product or service features aimed at satisfying a specific customer needs, generally consisting of; price, quality, features, demographic elements, such as; education, age, gender…

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The narrower the market focus, the crisper the message and the easier it is to target a market… The broader the target, the mushier the value proposition… and the value of a market becomes more abstract… According to Anna Mar; the balance between market size, acquisition cost and viability are rules of the game. The niche market approach focus on core issues without interference or ambiguity… It’s a narrow market focus (not necessarily a small market) and that provides a minimal viable product or service with barest and most essential touch point… User value, customer wonderment, sometimes even just pure fun is the connection to capture… Find that one customer and you’ve got a great start and a direction to find the next one…

In the article Think Large, Focus Small: Myth of the Niche by Arnold Waldstein writes: Remember when niche used to mean a market too small to matter? Not any longer: The flatter the connected world gets the more relevant and attractive narrow and focus is over broad and general… A niche market approach is not only a valid business strategy, but a potential antidote for a business’– attention deficit disorder (ADD)…

According to Om Malik; 50% of Internet traffic sources are ‘niche’ keyword searches… The more specific the content, the more valid and useful the search results– it’s a basic SEO and SEM truth that plays well… And for a business model, the more contextual and relevant to a market grouping the greater the pay-back…

A sharp focus both deepens and broadens the market, i.e.;  a ‘finer net’ captures more of the higher quality users, rather than a larger sieve that is forever churning looking for meaningful connections…

According to Seth Godin; a business becomes successful one customers at a time… and the more specific that customer connection, the more clarity there is in making that interaction successful… You get farther faster by focusing narrowly… It may seem obvious but whether you have an early product or service for which you haven’t discovered a right customer connection, or at a later stage ‘noodling’ over how to expand faster… a singular passion-point, focus on a single-need, for a customer connection; just works better…

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In the article Niche Business Is All About Narrow, Not Small by Marsha Lindsay writes: The ‘classic’ definition of a niche is– the targeting of a narrowly defined customer group that is seeking a distinctive mix of benefits… usually a small, low-volume, transnational market… and in the opinion of some experts, it’s unsustainable, unscalable… But in contrast, in ‘digital age’, the meaning is very different: According to The Economistthe very definition of a flourishing economy is one rich with niches… and a niche’s size no longer has limitations of magnitude as in the past… In fact, today niches come in many sizes– some are small, but many can be very large…

So rather than equating niche with ‘small’, think ‘narrow’… As in narrowly targeting a group whose self-interest/self-concept is so clear that business can offer something ultra-relevant and vastly different from alternatives… Hence relevance and differentiation can significantly increase growth… which makes-up for narrowness of the target… A focused offering resonates with a target, for which there are few alternatives– it creates predictable revenues, lifetime value, word-of-mouth advocacy… Hence, the old niche stereotype, as just a marginal business opportunity, is an important business model for both large and small enterprises…

In the article To Niche Or Not To Niche by Daniel Priestley writes: It’s a common business fear– getting pigeon-holed and missing out on other opportunities… There are two reasons against being pigeon-holed into a niche: 1.) fear of not attracting enough customers within that niche.. 2.) fear of having limited options outside that niche… However in the real world, focus on niche markets is the pathway to faster growth, greater profitable… Conversely businesses that present themselves as ‘jack-of-all trades’ end-up competing only on price… Hence according to some experts; the lesson is simple– niche then pivot, niche then pivot, niche then pivot…

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In the article Niche Strategies To Compete With Goliaths by Andreas von der Heyd writes: David vs. Goliath legend is alive! At the same time, however, the Goliaths of today´s fierce and highly dynamic business world (think Google, Wal-Mart, Apple, Coca-Cola, Procter & Gamble…) have become much more innovative, agile, and aware of the need to enter attractive niches… While a mass market is about selling to everyone… niche market is about focus on a specific segment of customers, e.g.; gender, age, ethnic groups, occupation, hobbies…  and benefits are; more profit margins, greater customer loyalty…

The Internet is all about niche markets, the Internet is the enabler of specialty, focus markets… and targeted business models… However, a successful focused business is highly vulnerable and it must be agile, flexible… and continuously innovative… The key to focus strategy is the ‘brand’… Building a ‘brand’ through the successful experience of every single customer, one customer at a time… Also these focus businesses must take advantage of gaps in their market, and fill the gaps, and expand the gaps, and create new gaps… while mostly stay true to their customers specific expectations…

Building strong networks and relationship beyond the niche boundaries is critical, while being consistent with customer expectations… it must be part of their DNA… These networks and relationships are anchors of in this business model… it means regular exchanges and collaborations  with other players in the grouping, e.g.; other businesses, universities, research centers… it means share knowledge, information, expertise, skills… learning from each other, and assisting each other…

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Managing in a niche business is a true entrepreneurial challenge… Nowhere else do leaders need to encompass two main and opposed characteristics: Thinking Big and Thinking  Different… Thinking Big means– create, communicate bold direction that inspires results… Think Different means– look around every corners for new, different ways to provide better value and service to customers…