This is a guest post by Chris Horner, a freelance photographer.
Over the years I’ve had the privilege of talking at length with many business owners, executives, and aspiring entrepreneurs. It seems that identifying a target market is one of the hardest tasks for these folks to accomplish. I believe it’s because they try to market their wares to anyone with a pulse. (Yes I was actually told that once – word for word – from a bank executive) This results in wheel spinning, poor sales, and the business owner/exec scratching their head trying to figure out what exactly happened as they’re driving to bankruptcy court.
Fortunately there’s a solution to this problem. It’s called niche marketing – or in other words finding a narrow group to focus your marketing efforts on and producing products specifically tailored to that niche. When people first hear this, their reaction is usually “why on earth would I want to do that? I want everyone to know about me/my company/my product!” But that doesn’t work – and here’s why:
If your target market is too broad, your product and message get diluted to the point where no one cares. In an effort to reach everyone, you reach no one. For example, if you develop a product for people who own dogs, and in analyzing the potential of your product say to yourself “If I just capture 1% of the dog owner market, I’ll be a millionaire!” then you’re doomed for failure. Now it’s true that if you were to sell a product to 1% of all dog owners, you could very well become a millionaire. The only problem is, to advertise to such a diverse group would cost MANY millions. By the time your message penetrates enough to capture that 1%, you’re out of business.
Conversely, look at a company like Ferrari. They build the most desirable sports cars on the planet. Not SUV’s, not minivans, not sedans – red hot sports cars only. Waiting lists for new models extend for years. Special edition models are sold out before the first one ever rolls off the production line. They don’t disappoint – driving one borders on being a transcendental experience. Oh, and by the way they do this without doing any advertising. Why? Because they’ve invested time and energy making their cars the best in their niche. While their cars are not for everybody, there’s absolutely no confusion as to what they make or what they stand for even among non-buyers. It’s a premium product, priced accordingly, and produced without compromise. And yet their yearly output of a few thousand cars doesn’t even register as a blip among the tens of millions of cars built yearly worldwide.
While the above is a rather radical example, it still makes the point. There are a lot of advantages to focusing on a niche market. It’s been said that it is easier to be a big fish in a small pond, and that’s exactly right. For one thing, you’ll know exactly who you’re selling to. With a smaller group to focus on, you can tailor your product to their exact needs. Your clients will receive more personalized attention and sense that you truly understand their problem and its solution. You’ll waste less time and resources chasing clients who won’t buy your product anyway because it’s not meant for them. Or worse, those who will ultimately be unhappy with a mediocre product meant for “everyone”.
As a photographer, I offer some of my photos as fine art prints. The professional printer I use has this concept figured out hands down. The first time I talked to him, I knew he was the one. For starters, he uses only top-notch paper sourced from European companies that have literally hundreds of years experience in the paper business. He personally reviews each file before printing to make sure the quality is up to snuff. Most printers just run the file and however it comes out is how it is. His prices are not cheap and not negotiable. And yet he is swamped with work even during the worst recession any of us have ever seen. That’s how you do it.
In this economy especially, companies don’t have time or money to waste. These days thanks to the Internet, social media, forums, etc it’s easier than ever to find clusters of people interested in a particular niche. Study that niche and figure out what problems they have that you can solve better than anyone else, then execute accordingly. It really can be that simple.
Chris Horner is a freelance photographer in Ann Arbor, MI who enjoys enjoys shooting urban scenes around the Metro Detroit area. You can find him at www.LensArtwork.com