Think Small, Grow Big: The 4 undeniable truths behind niche marketing
Based on what I know about our readers, there’s a 72% chance that you are a self-proclaimed “full-service remodeler.” But what I don’t know is, what are you known for?
Are you the “bathroom guy?” The “kitchen gal?” Or are you “the remodeling dude?”
If it’s the last one, then you might be doing yourself a disservice — especially if you’re looking to grow. The truth is, if you’re looking to grow big you might want to start thinking small.
Going niche can be a powerful marketing strategy, particularly for smaller remodelers forced to compete against the relatively massive marketing budgets that larger competitors afford.
To help you see the power of niche, we’re going to play “Imagine This…”
But before we do, a word of warning: Don’t confuse your niche with your target market . . .
- Your target market defines who your ideal customer is.
- Your niche is the specific service you are offering them. Your niche is what you want to be known for.
The fear
Whenever I talk about niche marketing, I get a lot of push back. “I don’t want to lose customers,” they say. Most remodelers want to be everything to everyone. Especially the smaller companies. The thought of turning away perfectly good work is ludicrous to most.
But there is a method to the madness.
Narrowing your focus broadens your appeal.
Here’s what I mean.
Imagine for a moment there’s an accident on one of your projects. After the dust settles OSHA smacks you with an unwarranted citation.
You’re going to fight this to the end! So you take to the internet to find an attorney and these are your top two choices:
MILES LAW – specializing in OSHA Related issues including: OSHA Citations, OSHA Litigation, OSHA Regulation, OSHA Petitions for Reconsideration, OSHA Appeals, Safety Risk Analysis, Workers’ Compensation Discrimination Claims
THE BIGG GROUP – specializing in construction law including: Collections (Commercial Debts above $75,000), Contracts, Employment Law, Franchise Law, Litigation, Mechanic’s Lien Filing, OSHA Related Legal Problems
Who do you want to hire?
Did you choose Miles? Most people do. It’s “obvious” that they would do a better job, isn’t it? After all, they only focus on the very thing you need help with.
Which brings us to the first undeniable truth…
Undeniable Truth #1: A niche business is perceived to be able to do it better than a general purpose company
Now, the assumption that the first firm of Miles Law is best is not necessarily true, but that’s how our brain works. And I’m not just talking about our logic: this perception impacts both logic and emotion.
It’s only logical to think that doing one thing makes you better at it. And admit it, it’s comforting to see the exact item you need help with on their specialty list.
Now consider this…
Imagine you call both firms and learn that Miles Law charges $475 per hour and The Bigg Group charges $200 per hour.
What do you think about them now? Who do you think would do a better job of defending your company?
For most, the price difference only strengthens the impression that Miles is the better attorney.
Which brings us to…
Undeniable Truth #2: A niche business can charge a premium for their services because they are “the expert.”
Okay, so, armed with what you now “know” about these two firms who would you choose? Well, that depends, doesn’t it? How much does this mean to you? Is it a slap on the wrist citation or a hefty fine that could cripple your company?
The truth is, whatever is at stake will play a huge role in your decision. Miles Law “obviously” the best, but you don’t always need the best. In this case, maybe good enough is good enough. So depending on your needs, you may decide to go with The Bigg Group.
Which brings us to …
Undeniable Truth #3: It can help you land better clients.
If executed correctly, niche remodelers have clearly set expectations before the phone even rings. That means niche remodelers will typically have a higher close rate than the “we-do-it all” companies because their leads are pre-qualified. For small companies that don’t have the time to chase bad leads, this is a huge benefit. And for larger companies this is a great way to increase efficiency.
And this brings us to the final undeniable truth…
Undeniable Truth #4: Your marketing dollar goes much further with a niche business
Imagine for a moment you and a competitor both have a $40,000 marketing budget. She spends the entire $40,000 promoting her niche: luxury bathroom remodeling. You, however, have to promote bathrooms, additions, kitchens, finished basements, whole house remodels, roofing, decks, and new home construction. That leaves you $5,000 per category to reach the eight target clients you’re trying to find.
You’ve put yourself at a significant disadvantage. How can your $5,000 compete against her $40,000? Now consider for a moment that there’s also be a kitchen remodeler with a $40k budget; and a deck remodeler, and a new home builder, and a roofer, all with $40k budgets. Your $40k isn’t looking so great right now, is it?
The ability to fine tune your message to a razor sharp focus means you can expect higher returns on your investment.
Conclusion
By no means will the choice to pursue a niche marketing strategy guarantee success. And there are certainly some pitfalls. For example, choosing to be “too niche” can be disastrous. You have to be sure that there’s enough demand for your niche to support a growing company.
So don’t rush into it. Like all business decisions, it requires in-depth analysis and critical assessment. But for some, having a niche can be just the shot-in-the-arm your company needs to grow.
What about you?
Do you currently use the niche marketing strategy? Are you thinking about it? Let’s start the discussion below!
Great post!
You do not have to walk away from non-niche business where that business contains (your) niche elements.
For example: My niche is helping homeowners manage a remodeling project. This set of services empowers homeowners to be able to manage their remodeling projects, nothing more. I do not provide construction, engineering or design services. I help the homeowner identify potential members of the team that can provide these services. I especially do not recommend team members. The homeowner selects who they want to work with. So I maintain niche focus and let my “teaming” partners do their thing. Client is made to understand that I do not function as a general and must agree to contract directly with other members of the project team. In this example, I bring added value beyond my niche focus since I can help the homeowner organize and execute his/her team member selection process. My homeowner prospects never negotiate price!
Look at your niche and see how it is integrated with other disciplines. Be prepared to help your clients build his/her project team while you remain focused on your niche. Get under contract before you assist your client in this process. Above all else, maintain a separate contractual relationship with your client. You do not want to acquire liability while trying to be helpful.
This is a great post guys. We know hands down that many of our i360 customers who market (and sell) within a targeted niche, even if they are big enough to do a few different things and market them separately with that approach, on average get a much higher rate all the way through the pipeline. The proof is in the data. That type of focused messaging works, ESPECIALLY online with those searching for something specific.
Thanks Justin. And thanks for pointing out the possibility of targeting multiple niches.
However, I feel that most remodelers should take this approach very slowly. If you go the niche route, I think you should go “all in” on one. You can always expand later. If you can’t do it, than the niche strategy may not be right for you.
Absolutely. There are many markets where the focus on a single niche can actually exceed the growth and profitability goals of an owner. It is often a main part of the solution to get over that “hump”.
When we see larger companies that do eventually focus on multiple, a key to their continued success is that they keep that marketing message hook, and the company focus, clear for each. Sometimes they go further, keeping the businesses entirely separate. So the general marketing and operating principles pointed out above scale into their continued growth. If they can’t keep the focus internally, they won’t expand… well, the wildly successful ones at least!
Many prospects can finish the phrase “jack of all trades…”, and mentally they often will if that’s what they surmise you are!
How do you move into focusing your marketing on your niche? Clients compliment me on my design ideas and being able to select the right fixtures, or other products for the job.
Good question BC. Unfortunately, this is one of the “that depends” answers that everyone hates.
But it really does depend. It will have a lot to do with the niche you choose, your current position in the market, your budget, your available resources and dozens of other things.
The best place to start is analysis. Don’t haphazardly pick something and run with it.
I’d recommend starting with a comprehensive SWOT analysis. This is a great way to flesh out your position. Things will start to take shape quickly after this exercise.
If you have a Marketing Manager or Executive, you may want to consider signing him/her up for our Roundtables for Marketing Pros: https://www.remodelersadvantage.com/our-services/roundtables-marketing-pros/ .. Shameless plug 🙂