The Law of Niching

The law of Niching says, “Don’t try and sell your product/service to everyone, sell to a particular type or group of persons – in other words sell your products/services to a particular niche market”.

“Very narrow areas of expertise can be very productive. Develop your own profile.
Develop your own niche”. –
Leigh Steinberg

So what is a niche?

I love this definition by business dictionary.com which says that niche marketing is: “Concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not ‘exist’ but are ‘created’ by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them. As a strategy, niche marketing is aimed at being a big fish in a small pond instead of being a small fish in a big pond”

Let’s take some 3 examples:

  1. Health is an industry which includes hospitals, pharmacies, medical equipment, health food, fitness, etc but fitness for the over 40’s is a niche.
  2. The finance industry will include banking, insurance, investing, etc but insurance for freelance photographers will be a niche.
  3. The music business includes musical equipment, recording studios, touring, accounting, publishing, music business law, education, etc but artists that sing R&B Gospel music will operate within a niche market.

It might help for you to think of niche as narrow and deep! The opposite of working within a niche is to focus ones efforts into a broad market. Actually those who are unaware of niche markets say things like (let’s assume the person is a web designer):

‘My intention is to create a website for anyone that needs it’

or

‘Anyone who wants to go online to trade needs a website and I can make one for them’


You may ask why the above statements are impractical.

Firstly the freelancer does not have the technical knowledge to build websites for every type of business. The website needed by a farmer will be completely different to the one needed by a business who wants an online trading platform.

Secondly, the freelancer does not have the capacity or cash flow to create 5000 websites a month. Even if you can subcontract the work; managing the process will require staff and huge financial responsibilities plus skill sets that are out of reach for a new business.

Thirdly not everyone that needs to trade online needs a website. If I am selling on Ebay or Amazon I don’t need to have my own website.

Finally, not everyone who needs a website will come to you.

From this simple example, it should begin to dawn on you that you need to niche your activities to have the clarity necessary to succeed.

There are several reasons why the law of niching is so important for the freelancer/self-employed person.

We will use the earlier example of the web designer as a means of learning the key points in this section.

  • Save time and money on product development: In the example, we gave earlier about the web designer; it could take decades to learn to build websites for every single industry and business sector. Even if that can be learnt; individuals would make so many variations that the web builder will become overwhelmed. Just think about the money and time that will be saved if the designer had a service that created websites for only one niche like Nursery Schools or Photographers or Cafe’s.
  • Cost of promotion: It is 100 times cheaper for our web designer to market to Nursery Schools then everyone that needs a website. Apart from the savings in cost there are the savings in time and learning curve. In the beginning of your freelancers business, you should endeavour to get sales as quick and as cheap as possible. That can only be done within a niche. We need to remember that the kinds of advertising that save money are those specifically targeted to an exact type of person or group. It is easier to establish credibility by writing articles on forums, blogs within a market niche instead of watering down ones effort trying to reach many groups at the same time.
  • Achieving expert status quicker: Experts get paid more than anyone else within a particular market. Once you are recognised as the ‘Go to person’ within your niche; it attracts higher pay, status and influence. Many people talk about social media marketing but the Facebook expert will command a higher pay than someone who knows a bit of everything social. The expert status becomes achievable because you are working with a specific type of group within a small market. Taking an example from the competitive soft drink market; those who supply energy drinks have carved out a niche instead of competing with the established brands like Coke and Pepsi.
  • The big fish attraction: In the definition given by business dictionary on what a niche market is; they spoke about being a big fish in a small pond. What they did not say is that the big fish automatically attracts large and better businesses. So, if you want the best businesses to come to you instead of chasing business all the time; it only makes sense to work within a niche.

There is one more thought I want to share with you about the law of niching and it is about what features you should bear in mind. In fact, I call them the ‘secrets to successful niching’.

Thinking and working to accomplish these 3 secrets will help you achieve a greater degree of success.

  1. Work in a Growing Niche: The first secret to working profitably within a niche is to discover whether the niche is big enough and if it one that is on an upward growth. If a niche fails in those two tests then it is probably not the best niche to concentrate on. Take our web designer example; if he/she wanted to concentrate on building websites for Vacuum Cleaner Manufacturers that will probably be too small and already well-established to enjoy the advantages discussed above. But if we consider a Nursery School or Child Care as the niche that kind of market is probably big enough and continually growing because the population is increasing and anyone with an interest can setup that kind of business. You might conduct some research and ask the following questions:
    • How many people started the business last year?
    • How many blogs and forums cater for this niche?
    • What can be learnt from the number of Google searches?
    • Are there strong barriers to entry?
  2. Do what you know. Match your expertise with what the market needs. Since you will be working within this niche for many years you must ensure it is one you love and can provide services for. There is no point getting involved in a niche just because it looks promising financially. That is a recipe for failure in business as a freelancer. Building the expert presence also becomes more difficult if you cannot prove your expert knowledge within the market. So marry what you know well with what the market needs and the battle is half way won!
  3. Sell other products once people recognise who you are. According to Danny Iny from Firepole Marketing he established himself first as a blogging expert and after it worked he expanded the services he offered. In our web designer example that freelancer may be comfortable building sites for 10 different types of industry but being know as an expert in one, is the key to getting business from the others. What many freelancers try to do is get involved in as many markets as possible at the same time. That kind of action dilutes the effort. Think about a major brand like Coke. Once we all loved Coke it was easier for the same company to sell us Fanta, Sprite and other variations of fizzy drink. Start in one market, dominate it and then expand!

Get Started

  • Interview those who want to work with you and asked for the best methods and means to reach people like themselves.
  • Feature on established forums and sites. Ensure you are contributing into that community.
  • Attend industry events to learn and generate useful contacts
  • Speaking at events and publishing articles in that niche can be a great start
  • Start delivering to the first few clients
  • Listen to clients, tweak your activities and move forward
  • Keep repeating points 1-6 for the next …….. Years

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