Why You Need To Pick A Niche

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8 minute read

Wide or Right? Ocean vs. Pool.

Are you casting a wide net into an ocean of women business owners or are you casting the right net in the right pool of women business owners?

If you’re an online business coach, course creator or you sell something to women, you’ve picked a huge ocean to play in. 

You need to pick a niche to position yourself as an expert in your market and set yourself apart from your competition.

We (women) buy more online than men. 72% of online purchases (includes personal products and services as well as business products and services).

Women spend $31.8 trillion worldwide. (Source,  Catalyst.org/research/buying power, 2020)

So if you haven’t really honed in on your niche, you could be spending a lot more time and money reaching the wrong people. 

By niching in this ocean and creating a pool, you’ll achieve better results over the long run, I promise.

Niche – /niCH,nēSH/ 

Whether you pronounce it “Nitch” or “Neesh” you need to pick one if you’re doing business online.  Why? Because the more focused you are with your clients the faster you’ll get to transactional conversations.

A niche is a highly focused target market that you build all of your content, products, services, marketing and messaging around.

Merriam Webster defines a niche as “a specialized market”. 

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By specializing in your market you’ll reach more of the right people, faster.

If you’ve been in business for any amount of time you’ve heard that you need to pick a niche, right?

But for so many people the thought of narrowing the market scares them. 

Picking a niche isn’t always an easy task especially if you have a variety of products or services that could reach a broad market.

The operative word is could.

By not narrowing down your niche you’re risking reaching no one or at best confusing those who do happen to land on your site.

ocean and pool

“If you aim at nothing, you will hit it every time.” Zig Ziglar

In essence, by trying to reach everyone you’re reaching no one. The easiest way to tell if your niche is working is to test your marketing messages against the audience you are targeting and determine if the numbers line up. 

Uh Oh…. MATH

Time to do some simple math.  (I get it, your eyes just glossed over, but trust me, you want to read this. It really does support the need for a niche!)

How much money do you spend on marketing for your lead magnet? Add the cost to produce the lead magnet + the technology to capture the leads + the amount of money you spend in advertising + SEO spend. There may be other industry-specific expenses so add those in. 

Next, divide that amount by the number of leads you actually generated. 

Hypothetical Math:

Cost for 4 week campaign =$5000

Total number of leads generated =1000

Your Cost Per Lead =$5 per lead

Is that good or bad? 

It depends on the conversion rate of the leads and the revenue generated.

This is always one of the sticky places with my clients. The truth is that nobody wants to waste money and the variables that affect the success of any campaign move so much that there’s always a little hesitancy to spend.

Here are some projected averages for cost per lead by industry.

So let’s look at another hypothetical.

If you get 1000 leads and you convert 20 then you’re hitting the industry average for online sales which is 2%.

If you have nailed your niche, your conversion rate could double to 4%. Which is pretty good, as an average.

But the real question is what’s the marketing return on that investment (MROI)?

Depends on the cost of the product or service you’re selling.

If your product or service is $1000 then you spent $5000 to generate 20 sales or $20000.  Subtract your ad spend and the cost to deliver the product or service and you’ve got a rough MROI.

If your product or service is $99 then you spent $5000 to generate 20 sales or $1980. Again, subtract the cost to deliver your product or service and you’ve got a rough MROI.

Niche-specific marketing will drive up your conversion rate but it also helps support the price you charge for your product or service.

Are you ready to workshop your niche?

While this is a simple task, it’s not easy. This should take you a little bit of time to complete if you go deep to discover your niche. If you’ve already identified your niche, this is a great refresher exercise to see if you’ve missed anything. 

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How does niche-specific marketing drive up the price of your product or service?

Narrowing your niche helps you get in front of more of the right people who are ready to buy.  

Think of it this way:

Everyone needs a dentist for regular oral health. You know there are plenty of dentists out there but you don’t really get serious about finding a dentist or scheduling with your dentist until you have a need. 

You’re most likely to get an appointment when you have a problem and you want an immediate solution.  If you crack your tooth or have a cavity that’s hurting, you’re in transaction mode, not just search mode.

A broad niche = less defined and that means that potentially less of your audience is ready to buy.

The broader your niche you’re more likely to be reaching people who are just looking.

The other day I walked into a furniture store. We built our house a year ago and I’m still looking for the right furniture for several rooms.

As I entered the store, the salesperson asked me if I was looking for anything in particular. I said no because I am still just looking. 

Trying to get ideas and inspiration. I’m not looking for anything in particular right now. 

I know I need something for the formal living room, may want to change some things in our great room and definitely want a new shelf for my office. But I’m not sure exactly what I want.

The salesperson had the chance to narrow my focus (identify the niche I was in) by asking me what room I was thinking about right now so that they could point me in the right direction of those types of furnishings.

They did not ask me that and I didn’t think to ask for specifics at that time. 

I was just looking. I might have shifted my “just-looking” to “interested in buying” if there were more focused attention on me as the buyer.

I walked out of the store and popped back onto Pinterest to continue my random searching.

That’s what happens in the online world as well.

A broad niche attracts a lot of people who are just looking. 

words find your niche

Attract more people and solve their problems faster with a targeted niche.

A targeted niche attracts more people who are closer to buying because they are guided to their solutions faster.

When you can remove doubt, confusion, and fear coupled with solving a lingering problem, people will pay more for what you’re offering.

Narrowing your niche is not narrowing your profitability.  Let me repeat, just because the pool is smaller, doesn’t mean you’ll make less money. It means that you’ll have more of the right people in the pool who are ready to buy faster. 

More math (hint: marketing is about math, not just pretty graphics and social media)

Broad Niche: You have 100 people in the pool but only 10 who are really interested in what you do. Out of that number only 2 are ready to buy. There’s that 2% average conversion rate.

Narrow Niche: You have 100 people in the pool and all are your target market. Out of that number 40 are ready to buy. There’s your 4% average conversion rate. 

“Finding a niche is important for small business owners who want to not only create a steady stream of revenue but also establish a loyal audience. Walters said that a solid market niche helps to ensure that a particular group of customers will want to buy from your business, instead of going to the competition.” Business News Daily

The more specific you are in your niche, the easier it should be to identify your ideal market.

This is another tricky place for my clients. There’s some wrong thinking that trips people up when it comes to niching.

We go through this rapid-fire exercise when creating a niche that taps into what you already know about your ideal client.

Often, these identifiers are demographics, but the fun comes in when we get specific on their psychographics.

  • How do they feel right now?
  • How will they feel after you help them solve that problem?

We spend a lot of time in this feeling-to-result exercise and then we validate it through research and testing.

When you can get into the head of your niche and really narrow down what it is they want from your products or services, you’re so much closer to creating a customer.

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What do you need to do to narrow your niche?

  1. Decide what you want to narrow YOUR focus on for at least 3-5 years. If you can’t get inspired by it, you won’t do it well. The best example that I know of in this area is the brilliant Amy Porterfield. She went from general Facebook marketing to focusing on course creation and list building. She’s one of the most successful online marketers with integrity out there. Props to Amy for all the good she does because she’s passionate about helping people in a specific niche with a specific need.
  2. Do people need what you want to sell in that specific niche? Time to hop on google and search for the most specific keywords in your niche. I’ll share more in part 2 of this post about those specifics. 
  3. Do you already offer part of what your new niche is looking for? Look at your current product or service and determine what you need to change or add to help narrow what you’ve already created to meet the new niche.
  4. Is it even possible to narrow your niche in a way that you’ll be passionate about it and you can help them move from stuck to successful?
  5. How closely tied is it to what you currently offer? Is there synergy? Will you love talking about it? Creating content about it? Creating problem-solving solutions for it? Stepping into verifiable authority with it?
  6. If the answer is no, then you don’t have a niching problem, you have a passion or expertise problem and maybe you’re in need of a Business Passion Reboot. (No problem, sista! I can help).

The reality is that you’re not going to reach everyone in your niche, not even close. 

But you’ll have a better chance of reaching more of the right people who are closer to buying if you are passionate about something specific, you’ve mastered that something specific, and you can solve a problem for others who want that same specific solution.

Characteristics of a Healthy Niche

  • You can clearly identify the needs of the niche, down to what makes them buy. 
  • You’ve aligned your products or services with their most pressing needs.
  • The pressing need or underserved/neglected needs of this group of customers can be addressed by you.
  • You have expertise in helping people move from their point of pain to success or mastery in their needs.
  • There’s a clear path to reach those customers. You know where they spend time looking for their solutions and you have the budget, skill, or resources to be recognized where they are searching.
  • There are enough people looking for the solution you are offering. There’s a risk of going too small in your niche. Think small but profitable. 
  • You don’t want to be the first in a niche. Unless you have a huge budget and you want to create the market. That’s an expensive place to be.
  • Search for others who offer similar services and products to the niche you are focusing on. 
  • You aren’t looking for the most profitable niche because you might not be the credible expert in that niche.
  • You’re looking for a niche that you are qualified in and passionate about. I’m passionate about chocolate truffles and red wine. I have no business creating a business making chocolate truffles and red wine. 

Are you ready to workshop your niche?

While this is a simple task, it’s not easy. This should take you a little bit of time to complete if you go deep to discover your niche. If you’ve already identified your niche, this is a great refresher exercise to see if you’ve missed anything. 

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xoxo Lisa
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