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.
“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.
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.