It’s a little too easy to fall into a trap of thinking that your products and services can be used in any industry and bought by anyone. While it could be true to a certain extent, there’s a challenge with having that mindset: it makes it much harder to see where you should be spending your marketing dollars and resources. Especially if you’re a small to medium sized business, your marketing contribution rate is never really near the 3% of revenue that you bring in. When your marketing budget is low, you must be careful on where you focus marketing efforts. That’s why identifying your target customer industries, or niches, is critical.
Here are 5 things to consider when determining your niches.
- What industries do you have the most experience in?
Credibility is very important when it comes to closing a sale. If there is a particular industry that you have experience in, those companies will see the highest value in choosing your products and services.
- Which niches give you the most profitability?
Depending on the products or services that you provide to the marketplace, your profitability may vary. If you’re going to be investing marketing dollars into specific industries or niches, you need to find those that will give you the highest ROI.
- How easily can you break into each market?
Some industries are harder to ease into than others, and every industry varies in terms of how you can gain visibility. Some industries host trade shows, conferences, publications, networking events or awards events. Select the niches where you feel you have the highest visibility with the least amount of resources it takes to be seen. Where are you most needed?
- Who values you?
Some industries may challenge your value harder than others. This makes it oftentimes difficult to work within a particular industry. You may get business, but you can find it less rewarding to support them if the partnership drains internal resources and support. When determining your main niches, consider working with those who deeply value the products and services you provide.
- Where are your contacts?
Select niches where you have the strongest relationships and contacts that can influence your value on these industries. Business is all about relationships. It’s wise to choose industries where you have the highest potential to influence the relationships you already have.
The sooner you decide on your niches, the sooner you can spread your resources wisely and grow your business more effectively. This will not only save money but time as well. It’ll be more rewarding and encouraging for your company, and allow you to forecast sales growth more effectively. So before you decide how to spend your marketing dollars, or craft that next tagline, consider whom you’re targeting and who you most want to work with.
And always remember….