Ingredient: Market Niche Definition

Your market niche definition identifies the people, organizations, goals, and problems that your business is primarily designed to serve. These people and organizations are the prospects you plan to pursue actively as clients. Don’t make the mistake of thinking that your niche definition must encompass everyone who could possibly be a client. Instead, decide which clients you truly want to work with.

Choosing and defining a specific niche allows you to maximize all of your marketing efforts. Without a niche, your marketing attempts will be diluted and haphazard, leading to wasted effort, muddy marketing messages, and an overwhelming number of choices about where to go, who to contact, and what to say. Making a name for yourself as a professional will be almost impossible because prospects won’t be able to distinguish your true expertise.

The most powerful niche definitions include both a target market and a specialty. Your target market is the audience your business serves, and your specialty is the scope of issues you address with your clients—the goals you help them achieve and the problems you assist them to solve. For example, a real estate agent’s niche might be “South Houston buyers of income property.” The target market is “South Houston real estate buyers” and the specialty is “income property.” If this seems too narrow a definition to you, consider the alternative. A broad description like “Gulf Coast buyers of real estate” will attract no one. It’s far too generic to be useful in crafting marketing messages or focusing your marketing action plan.

Here are some questions to help you identify your market niche:

Who needs your service the most?

Who is able to pay what you plan to charge?

Who is likely to give you large orders or repeat business?

Whose problems and goals do you care about?

What type of client work provides you with the most enjoyment and satisfaction?

What sort of people do you enjoy spending time with?

Where do you already have many contacts or an established reputation?

Who would be the easiest clients to get?

Remember that what you are doing by defining a niche is targeting a particular group, not excluding all others. You are not limiting your options by choosing a market niche; instead, you are organizing yourself to launch an effective marketing campaign aimed at the clients you most want. If someone outside that niche shows up in your pipeline, by all means do business with them if you like. But focus the efforts that you initiate on filling the pipeline with those clients you are most interested in getting.

For the target market portion of your niche definition, it’s important to describe your market using recognizable categories, such as demographics or industry classifications, rather than the presumed need of a client for your service. A contract trainer specializing in conflict resolution skills, for example, would find little value in defining her target market as “organizations that experience conflict.” This won’t help her focus her marketing, as it could be anyone.

“Organizations in need of conflict resolution training” won’t do the job as a definition either. Could you look them up in a directory? Would a referral partner know who would be a good lead for you? Could you figure out where these people would go to network? No. You can’t do any of these things with a need-based definition.

But if the trainer defined her market as “human resource development or training managers in midsize to large companies located in the Boston area,” now she can find them—and so can her referral partners.

If your target market is organizations, here are some ways you could define them:

Classification (e.g., retailer, manufacturer, government agency)

Industry (e.g., health care, software, travel)

Size (by number of employees or annual revenue)

Geographic location

Special characteristics (e.g., well-established, rapidly growing, family friendly)

Decision makers (by department, division, or position title)

And here are some ways to define individuals as your prospective clients:

Age

Gender

Family status (e.g., married, with children, with aging parents) Occupation (e.g., student, executive, self-employed professional) Income (by individual or household)

Education (e.g., high school, college, postgraduate)

Geographic location

Interests and hobbies (e.g., plays sports, active investor, travels often)

For the specialty segment of your niche definition, choose words or phrases that your target audience would typically use themselves when describing the problems or goals they need assistance with. People seeking interior design help might have goals such as “furnish a new home,” “remodel the kitchen,” or “stage the house for sale.” You could echo these needs by labeling your specialty as “custom home furnishings,” “kitchen and bath remodeling,” or “home staging.” Stay away from generic, abstract phrases like “innovative designs” and “outstanding interiors.” These may be useful in writing marketing copy for a brochure or website, but are inadequate as definitions of who you serve and how.

Join your target market and specialty together in one concise phrase that identifies your most-wanted target group and the problems or goals you address for them. For example: “computer network installation for small to midsize companies in the Denver area” or “career transition for midlife women.”

A final word of advice: If you can’t seem to narrow your focus to just one target market and specialty, you are better off defining two or three distinct markets or specialty areas than using one broad label intended to include them all in your niche definition. A financial planner seeking high-income individuals, for example, might choose “executives, established professionals, and successful entrepreneurs” as targeted groups. A target like this is much more helpful in locating prospects than saying “people with income over $100K.”