Finding a Niche, or not?
I have been having a lot of conversations lately about finding a niche.
Coming from a background in advertising sales I personally don’t care for picking one niche. I have always believed that it limits revenue opportunities. Unless you can get dozens of clients it seems like a bad idea.
What are your thoughts on this?
When speaking with agencies and I ask if there’s a specific vertical or group of businesses they’ll be going after. They often reply, “Whoever needs my services.” I don’t think it is a bad idea to go after markets or verticals that you are familiar with or you have experience with in the past. It’s great to be able to empathize with your client’s struggles and needs. I think the issue lies when people get too boxed in, they focus on either a small group that is difficult to convert or a vertical with a high churn rate. Keeping an open mind is important, but a general niche isn’t a terrible idea.
Interesting that you’re talking about churn in specific verticals Katie. The first thing that came to mind for me when reading this was Vendasta’s SMB churn study. Totally agree that some verticals have a high churn rate but overall our study found that vertical-specific marketing providers have 15% higher SMB retention after 2 years than non-vertical sellers. Here’s a link to the study if anyone is interested in reading more!
I think it’s a lot easier to align with the audience and gain their interest if you’re speaking to their niche. A massage therapist sees a marketing agency, ok… now they see a marketing agency for massage therapists…, without even seeing the offer, it’s pretty much the specialists client to lose at that point. There’s no shortage of businesses needing our help in practically any local niche… save maybe used cars, hotels,…
I think a lot of this depends on how you generate new clients.
For example…If you belong to networking groups you are leveraging relationships to get high level referrals that have a high close rate.limiting to just auto repair might not make sense. But… If you are running ads the message needs to be focused to the audience (niche).
I think you just need to consider what your agency marketing vehicle is and weigh that heavily along with what solution set you want to sell to your clients. They need to match up.