Niche marketing is extremely cost-effective.

For instance, if you are offering a product for a

selected demographic, you could advertise the product using a local media so that marketing
budget go a lot further, allowing you to use a more comprehensive media mix. Niche
marketing works well when you understand the market.

Understanding the market means you are able to identify the unique needs of your potential
audience, provide new and compelling products, tailor your products in the right way,
communicate efficiently with the target group and identify how you will position against your
competitors.

Advantages

Less Competition

When you have a highly specific product or service, there will be less companies out there
with the exact same offering. For example, there are millions of companies out there that sell
knives. There are fewer companies that sell knives with handmade wooden handles, and yet
fewer that offer customized knives with your initials on them. The more specific your product
or service, the less companies there will be to compete with you for customers, and the harder
it is for them to duplicate your strategies.

While it’s important for companies to have competitors, reduced competition is not
necessarily a bad thing.
The less competitors you have, the less you have to worry about monitoring prices and
keeping tabs on what they’re up to.

At the same time, the more specific the product is, the less people there will be that are
looking for it. Reduced competition is only a benefit of niche marketing when there is a
significant audience to compete for. If your competitors aren’t targeting a niche because they
can’t meet their needs, then that’s great news for you. If they aren’t targeting that market
because it’s not lucrative, then you may not be at an advantage.

Unlike in generalized marketing where market competition is still, niche marketing has quite less
competition for the viable customers purchasing the products.

One of the benefits of a niche market is having little or no competition. When you have a highly
specific product or service, there will be less companies out there with the exact same offering.

The more specific your product or service, the less companies there will be to compete against for
customers, however, there will also be less customers looking for your product or service.

Reduced competition is only a benefit of niche marketing when there is a significant audience to
compete for.

Kristen McCormick, a US based Marketing consultant notes, “If your competitors aren’t targeting a
niche because they can’t meet their needs, then that’s great news for you. If they aren’t targeting
that market because it’s not lucrative, then you may not be at an advantage.” 4
Increased Visibility

Increased visibility is a benefit of niche marketing that not only leads to more customers but
can also improve your online presence.

Businesses that serve a niche market tend to be unique, such as a cleaning company that uses
all natural cleaning products, a gluten-free bakery, or landscaper that creates interesting
mowing patterns. Businesses with a unique product or service tend to stand out, and often get
featured in media outlets such as talk shows, radio stations, or newspapers.

With niche marketing especially, getting in front of the right people is more important than
getting in front of a lot of people. However, getting in front of a lot of people such as through
these media outlets also has its benefits. The more people who know about your business, the
more people there are to recommend your business to a friend who fits your niche market.

Word of Mouth Growth

Another benefit of niche marketing is that it is very word-of-mouth-friendly. People in a

niche tend to be in frequent contact with others in that niche, which means more opportunities
to get the word out about your business. For example, expectant mothers attend prenatal
fitness programs, take childbirth education classes, and shop at maternity clothing stores,
where they meet many other expecting mothers.

If you are a prenatal yoga instructor, your current customers will be some of your best
marketers. The better you serve them, the more likely they are to recommend, and maybe
even rave about, your services to their many fellow expectant mothers.

Brand Loyalty Built Through Strong Relationships

Niche marketing makes it possible for businesses to build their brand loyalty. This marketing
approach lets you provide customers with products and services they need and desire. You
end up having a leg up on the competition because items in a niche market are difficult to
find in general products.

Niche marketing makes it possible for businesses to build their brand loyalty. When you are
engaging with fewer people, you can focus on the quality of those engagements and on
nurturing your relationships.

And as you are building your products and services specifically around this customer’s needs,
you are a true partner rather than a supplier.

Less investment:

Niche marketers require less investment as they have to produce limited goods for the niche
market.
Best for giving marketing insight

Niche marketing is all about selling to a segmented market. It is about taking your products to
people who have an interest in receiving them. This can help you redefine your business,
leading it in a new product directions and services. You will end up creating new
opportunities for your business by selling similar or support products. Once you begin to
concentrate fully on niche marketing, you will learn about new products, innovations and
ideas about the market.

Spending Less on Marketing and Advertising

This is a type of marketing where you will never throw away money hoping for returns.
Niche marketing makes it easy for you to save on your marketing dollars. Generally, you do
not have to send over ten thousand flyers to one or several neighborhood. Instead, send less
than a thousand flyers to a target audience that meets the requirements for your niche. With
this approach, you will be able to reach a larger percentage of people who are more likely to
use your services or purchase your products.

Marketing to a niche audience makes it easier for you to save on your marketing dollars.

Instead of taking a shotgun approach to marketing, ie the more is better philosophy gaining
the attention of the largest possible crowd in the hope it will encourage purchase, marketing
to a niche audience can be highly targeted and therefore more cost effective.

Higher Profit Margins

Niche businesses are often a high margin business. Customers don’t mind, or necessarily
realise, they are paying a little extra because they are only able to get that service, from that
company, or under its brand.

You are the Expert

When your business has a specific niche market, you are seen as the expert in your field, the
‘go-to’ for the right answers. It’s difficult to be an expert in everything, but when you
specialise in a niche market, you can define your skills and expertise in one area, attracting
those who need your specific services.

Niche marketing requires more concentrated practice in one area, so it can really fine tune
your expertise in a shorter time period. The benefit of niche marketing is that it enables you
to become an expert or thought leader in your niche.

For most customers, expertise is more important than size or brand name. A small law firm
that specializes in immigration may be chosen over a larger law firm with a familiar name.
When it comes to legal, financial, or health services, people want the business that has the
most knowledge and experience in their area of concern.

When you are an expert at something, not only do you obtain more customer trust, you also
gain more brand recognition. If you do everything, you’re going to be average at everything,
and you will blend in with the crowd. If you do a lot of things but are really good at one
specific thing, you will stand out. You may be even become known for that specific thing.
This won’t detract from other services you provide. The key here is that you become known.
People may learn about your business because of a specialty you provide, even if they’re
looking for a different service you provide

Less risks:

There may be lesser risks, as the marketing is done to a very small segment of the market.

Goodwill:

A niche marketer can earn name and reputation in the market. For example, companies such
as Rolex Watches and Rolls Royce command a lot of goodwill.

Enhanced Customer Relationships

Niche marketing targets a very specific kind of customer, so depending on what you’re
promoting, your niche market may be very small. For example, if you are a physical
therapist, there are only so many expectant mothers who are looking for physical therapy for
hip issues.

A small customer base has its benefits. When you are engaging with fewer people, you can
focus on the quality of those engagements and on nurturing your relationships. Your emails
can be more personalized, your follow ups more diligent, and your thank yous more frequent.
You can also accommodate special requests, offer custom services, and get to know your
customers on a more individual level. Each of these practices will enable you to better serve
your customers, further enhancing your relationship with them and solidifying their loyalty to
you.

However, if you have a small niche, be careful not to pigeonhole your marketing. If your
niche is just a part of your target audience, make sure your efforts on your niche are boosting,
and not detracting from your efforts on your target audience. This is one of many important
considerations to make when forming a niche market strategy.

Less Resources

One important part of effective digital marketing is identifying and understanding your
audience, which requires an investment of time and money on data and analytics tools. The
benefit of niche marketing is that because you are confined to a specific person and a specific
need, less focus is required on digging into your data to understand and keep up with their
needs. You will also be doing less trial and error with your methods, which also can be
resource-heavy.
Another cost effective benefit of niche marketing comes from audience segmentation.
Businesses with a broad audience will have various segments within that audience.
Successful content, ads, and communication channels will look different for each segment,
and catering your methods to each segment requires more effort and bandwidth. When you
serve just one demographic, you have less work to do. You can also operate more seamlessly
and give your undivided attention to this one area.

More Fun

Businesses don’t always pick their niche and pursue it. Oftentimes, they accidentally find
their niche in the process of serving their target audience. A photographer whose target
audience is people (as opposed to landscapes or animals) may find that she is especially good
at capturing candids of children. A landscaper might find that he particularly enjoys jobs in
senior citizen communities. A financial adviser may find that he works better with
teachers. The benefit of niche marketing is that since your niche arises from your interests,
passions, or special abilities, you are doing more of what you love.

Whether your business serves only your niche, or a niche among other audiences, the purpose
of niche marketing is the same. You want to find a small pond in which you can be a big fish.
If you compete for everything, you’re going to win at nothing. However, if you pick one area
to concentrate on, you can focus your efforts and stand out in your market.

Disadvantages

Because of the smaller market size, this marketing approach is not suitable for a company
that is small and intends to grow in the current market. The smaller market makes it difficult
to enjoy a larger profit margin in the market.

Among the advantages and disadvantages of niche marketing is that there is limited growth
because there is a small group of customers to buy products.

The niche marketing strategy may not be suitable for long-term marketing, as niches may not
give adequate business

The niche markets may be invaded by large companies, and small marketers may find it
difficult to compete.

A firm’s survival chances may decrease if it depends solely on niche

Impact of New Competitors

It’s the global nature of business that when a company creates a new service or product, it’s
only a matter of time before a competitor comes along. When marketing to a niche audience,
the impact of a new competitor can have a much more dramatic effect than when the
audience is bigger. Strong relationships and brand loyalty can help to provide some level of
protection for businesses.

Limited growth

By its very definition, a niche market is defined and limited, which will affect the
opportunities for growth for your business.

If the market is poorly targeted or not targeted at all, you must ask yourself some questions.
Is this happening because the product or the service is not needed at all? Are there only a few
potential clients that would fail in bringing enough profit for surviving on the market? If
these questions give you headache, then think twice.

If you are among the first, then there is a high chance that you will have to “educate” your
potential customers, and it won’t be an easy job. It might take years until people will begin
understanding how a certain niche works and why they should buy their products or services.

Volatility / Fickle Nature of A Niche

“You Pet Your People Too Much!”

Strong words from one of the top urban promoters we collaborated with on a regular basis.
To some extent he was and still is right. We have to walk a kind of tight rope with our niche
because we place so much value on their relationships and support.

The venue has to be just right.

Music, just right.

Pricing at the door, just right.

Temperature of their drinks just right. LOL

Attitude of the event staff, JUST RIGHT.

Even if one thing is out of place and you piss off too many of the key influencers in your
niche, you could pretty much lock up shop and take up fly fishing.

This volatility has played out in many ways in our market, where we’ve seen the demise of
event companies, knocking them out of top spots and off their high horses.
When a niche is so tightly connected, anything negative could spell doom and gloom, so it’s
important you do what you can in maintaining great relationships.

The Entitlement Dilemma

Now that you’ve built all those tight relationships, helped carry ice at the BBQs and caught
the garter at several weddings, for SOME there is a certain entitlement that comes along.
You’re now one phone call away and now many, not all, expect free entry to your events all
the time.

Free means 0 dollars. The more free, the more 0s, and not the zeroes that add to your bottom
line. Your job then is managing expectations and setting limits that will work for people in
your network and for your business, because at the end of the day you’re still running a
business.

So when people show up with 20 friends expecting for them all to get in free, you can pump
the breaks and come to a compromise. This is not an exaggeration, this has happened.

“I’m good right?!”

“Um, no! Let’s work it out!”

SIDE NOTE:
This is where having team mates help and someone can play good cop, while someone else is
the bad cop. I myself prefer to be the good cop. Who really wants to be the bearer of bad
news right? Plus I’ll end up letting everybody in free. Hence I appreciate my team mates.

Like any relationship, business or personal, you have to set boundaries so entitlement doesn’t
ruin things.

You can’t pay your DJs, bartenders and security staff with handshakes and hugs because you
let everyone in for free!

You Can Cap Out / Hit A Limit

The major con to just targeting a small niche, is the fact that your profits will have a limit.
There are but so many people to go around, especially considering you won’t be the only one
marketing events to your targeted audience.

Few people, divided amongst more options, equals less money for your bottom line.
Sometimes even if your event is dominating the niche for the night and you get the max turn
out, the returns may not be worth it for that specific event.

Knowing that fact, it forces you to cap what you spend on your events in hopes of
profitability. That less spending could show up in areas, like a lessened event experience for
the patron themselves. You can’t go blowing your budget and hope to make it back, because
the returns at the door / gate won’t even cover it.
* Scratches Tomorrow World Level Production off the list *

Less Opportunities

Sad to say, but a limited number in your niche may unfortunately cause you to miss out on a
few opportunities.

An example of this manifests in the form of sponsorship. As much as they will love that you
have a strong concept and fanatical base, at the end of the day it all boils down to sales and
impressions for them.

Your concept could be loved, but if you’re only getting one thousand people max for your
event, and not blasting out your promotion in the mass media, they’re going to find
somewhere else to spend their marketing dollars.

They’ll be calling up the folks like Abe at the mega venue, with the big radio budget spend
and overpriced celebrity hosts.

Sucks right?!

The good thing is that there are brands with smaller budgets that see the benefit of targeting
your niche audience. The game for you then is to develop more of these smaller opportunities
to make it all worthwhile for everyone at the end of the day.

We’ve discussed the pros and cons, but how do we make it all work so you can sleep well at
night?

Collaborate With Bigger Audiences

A simple way to leverage your audience is to collaborate with others and combine efforts.
There are clubs and marketers with larger audiences that will be willing to welcome the
members of your niche.

This gives you the opportunity to participate at larger clubs and venues, exposing your base
to other experiences and at the end of the day can mean more profits for all involved.

The main issue to be mindful of, is whether your audiences will play well together.
Combining numbers is all well and good, however if they’re at opposite ends of the spectrum,
it could spell disaster for the event. Defeats the whole purpose.

Testing Ideas for Bigger Application

Over the years we’ve tested tools and methods in our smaller niche with great success,
sometimes with huge flops. What doesn’t work we discards, but the successes we implement
in bigger niches. You’re able to test safely before you roll out a campaign to a larger
audience.
Often, these are strategies and tactics not used in the larger niche because they’re not able to
always be testing. When transferred, it works like gangbusters. This strategy works in reverse
as well.

You can pick up different aspects of marketing that the larger niches use and apply to your
smaller market.

Create Value Elsewhere

If you’re marketing to a smaller niche you have to get creative with how you extract value.
You may reach a cap in what you can charge at your event, however there are other ways to
benefiting from your base.

You could market other goods and services you provide. Say you also own a restaurant, are a
real estate agent or have a design company… these are all business you can market to your
engaged audience.

You’re only limited by your imagination, so think of as many ways you can tap your niche.
Of course without being a spammy, greasy, car salesman, pitching everything down their
throat.

Provide value and continue to nurture that trust you have established.

Domain Expertise / Consulting

Another great way to extract value, is to consult with other companies seeking to tap your
audience. This could come by way of concerts promoters, night clubs or brands who have no
clue how to market to your market or where to spend their marketing dollars effectively.
That’s where you come in.

Consult, give them the answers, point them in the right direction, all for a nominal fee. Just
make sure you’re not all hot air and fluff. If you say you’re going to deliver, make sure
you’re going to deliver. Happy consulting clients, equal repeat clients.