Sometimes, entrepreneurs can worry that focusing on a niche market means they are aiming too low or trying to be too small. That’s actually not the case. It’s opposite. Let’s look at this from a few different perspectives.
A niche market allows you to understand dominate in one area, focusing your attention there. This is very good for predictable sales revenue because you know your market, your targets, your value and everything else very specifically within a niche market.
Niche Market: How your customers see you and what they want from you
You customer wants to work with the best in their discipline — and not with a partner that is average in many disciplines. They want a product that totally fits their needs. And, most importantly, they want to see that you helped customers in their industry.
Niche Market: Focus, focus, focus
As Predictable Revenue points out, many famous companies began with a niche market. For example:
- Salesforce was only doing sales automation
- Facebook began with only Ivy League schools
- Amazon started only selling books
- Google was at first only doing search
Now those four companies compete in dozens, if not hundreds, of different industries. But they all began with a niche market or niche approach to help them grow and scale.
Niche Market: Priority alignment is valuable
Most companies are very bad at setting priorities across the organization, and many executives spend a lot of time trying to chase or create new revenue streams. This burns out employees and sales principals. They are always recreating the wheel and trying to promote customized solutions in an industry or vertical they don’t fully understand. They are less productive and eventually quit.
In a niche market, ideally this is what happens to a sales principal:
- They know the market
- Inherently, they understand their product/market fit
- Their target customers are clear
- The sales team knows how to articulate the value
- Because they focus in one niche market and on one set of customers, they become experts in it
If you start with a niche market, it doesn’t mean you’re too small or aiming low. It means you’re smart and ready to dominate in even more niche markets once you master the first one.