One of the most overused pieces of growth advice we see in our field is this: “Just niche down guys, you have to niche to make money.”
But is that really the case?
Sure, if you’re just starting out, that might be fine as you look to build market share and make a name for yourself by pinning your colours (or niche) to the mast. However, as you move along on your journey, you’ll uncover the various pitfalls and benefits associated with niching down.
So, let’s get niche with niches and pick them apart.
Randomists or generalists
When it does come to niching, you have to consider the other end of the scale, too. We like to think of it as a 1–10 scale, with 1 being the most ‘general’ of offerings and 10 being ultra niche.
Once your business grows to a certain size, being a generalist is not a bad tactic. Far from it. If you’ve got the weight behind you that you need to pick up the bigger clients and sell the bigger ticket items, then being a generalist means you can cast your net wider.
This makes it tricky to look at niching and see it as an obvious choice for medium to large businesses, as you’ll surely be losing out on work that you’d otherwise be able to knock out of the park.
Of course, though, if there’s a sweet spot that you’ve identified where your work shines the brightest, and you’re delivering it for top-class clients that pay you well, then…crack on.
Still at the bottom end of the niching scale, and almost into minus figures, are the randomists. The ones among us who dare to offer…everything. Even if the products or services don’t align with each other.
When niching (or generalising), it’s critical that your offering aligns with the pillars of your business. You can refer back to my article on the pillars of an effective sales engine for more info on that: click here.
If your offering doesn’t align with a common set of pillars, then you have to ask the question: “What am I even offering the market?”
The pillars of your business should be your biggest strengths, so play to them. If it doesn’t make sense, it could create a very complicated message and make you hard to understand and buy.
Sector offering vs Value-Based offering
We see offerings and niches through two lenses: sector-based offerings and value-based offerings.
The former is, as the name suggests, based on sectors. Niching down into sectors because you’ve spotted an opportunity, however, it leaves you wide open to market fluctuations and economic events such as the pandemic, wars, or recessions. Which we’re all pretty familiar with in due to recent years.
Value-based offerings, on the other hand, are tied to the value that you offer as a business and the pillars of your organisation, where your strengths lie and where the competition isn’t.
The beauty of value-based offering is that when times do inevitably get tough, you’ve got the transferable skills from sector to sector because you’ve based your niche on value, not industry.
Further, it gives you flexibility. When one market is in flux because of external factors, you can switch focus to another to continue pushing forward.
Your messaging is a mess
Okay, so it was unlikely that we’d make it through an entire article without mentioning positioning.
As your offer grows, the more tangled your positioning gets. This is where generalists and randomists come unstuck, as it becomes infinitely harder to be succinct and stand out in a crowded field with such a wide offering.
On the other hand, with a niche offering, it’s easier to pin down the messaging and be clear on what you do and who you do it for.
We won’t go into too much detail here, but you can read more about Proper Positioning here if useful. It’s always worth bearing in mind before you make the plunge into generalising or niching.
That’s all for now
Above all, the decision to niche or not comes down to the level of research that you’ve put into the process. Have you identified the challengers and competition? What are your options if the market changes? Do you have flexibility?
It has to be a well-thought-out process, just as the messaging has to be for generalists and randomists.
Ultimately, do we all want to really be niche anyway? Probably not, as we all need the flexibility to move sideways into other markets if things change.
To niche or not to niche, that is the question. You’ve got our thoughts; now consider your options and take the plunge either way. And remember, we’re only a phone call away if you need us.