Niching down to a smaller number of customers than you once may have had can be a little frightening. There’s always to risk that you’re going to leave a lot of money on the table.

But that’s mostly because we look at much bigger companies than ours, and see how they manage to serve everyone, and think that we should be doing that too. Yet that’s exactly the reason why we shouldn’t be trying to be all things to all people.

The reality is that, in most types of business, the specialist gets paid better than the generalist. Even if the generalist businesses seem to be much bigger and doing much better. But are they really?

While Mcdonald’s sells burgers in the tens of millions, they are being eroded every day by the likes of Grill’d, Oporto, Burger Urge and over 100 different smaller fast-food chains that have all carved out fast food niches that are more profitable at far lower volumes than the big four chains of Maccas, Hungry Jack’s, KFC and Subway.

You’ll pay nearly twice as much for a burger at a boutique burger joint than you will at Maccas. This means the margin on each burger is much higher. And they have to sell far fewer burgers to generate a profit.

The specialist gets paid more than the generalist.

So how do you know if you should niche?

There are several clues that are telling you that you need to starting niching

If you’re struggling to compete with a larger, more well-resourced competitor across the whole spread of products in your sector then that’s usually a good sign that you need to niche as you could never grow big enough to take them on, despite your more “personalised service.”

If you have more than two main lines of products or services, and one is financially propping up the other, that’s a giant billboard telling you to stop doing the thing that’s not making money.

And if you’re across several lines of business or products and you groan every time you need to work on one or more of them, that’s a sign. If you feel relief when you work on a specific part of your business, it’s also a good sign that you need to niche.

Niching makes marketing easier – and better

It’s easier to market a specific thing than it is to market several things

When you have 15 different messages across five different kinds of products or services, it’s hard to be consistent or target a specific type of customer.

When Kmart made massive changes in the early 2000s to drop nearly 70% of its product lines and become what they are now, they learned that being everything to everyone meant that they were being no one to anyone. Big W was killing them in revenue and popularity.  So rather than stocking 12,000 individual brands and products, they doubled down on having one of each thing under their own brand, Anko. Rather than having 113 different kinds of t-shirts from 72 brands on sale at one time, they reduced it to under 20 in each department with most under their own brand and perhaps a few licensed movies and music brands. 

The result was a Kmart that has a consistent look, feel and type of customer that is easier to describe, easier to build a campaign around and much less complex to advertise.

They’re also outperforming Big W almost across the board.

The social media effect from niching

Businesses that are not niched are generally messy and inconsistent on social media

Generalist brands and unfocused small businesses are easy to spot on social networks. They have no consistency in their message and tend to distract themselves with tonnes of stories that have no relevance to who they are and what they sell. Sometimes it takes a few posts for you to even understand what they do.

Businesses that have a clear idea of who they are are easy to work with on social media. Everything is relevant – even their humanising stories on Instagram. You know who they are, what they do and who it’s for with a post or two.

They know their customer and know exactly how to talk with them.

Three quick ways to improve your social media

Here’s three ways that you can immediately improve your social media posts.

When you’re being more niche it’s much easier for you to speak the right way to the right people. And when you do, use this formula:

1. Open each post with something that recognises the emotion being felt when someone sees your image or video, for example, “Doesn’t Tayla look adorable in this romper!”

2. Match a feature with a benefit – rather than just listing what’s so great about your thing. For example, “100% cotton so it’s always light and cool” rather than just saying “100% cotton.”

3. A clear call to action on what to do next, for example, “Tap the link to see the full range of colours so you can express yourself, your way!”

Dante St James is the founder of Clickstarter, a Meta Certified Lead Trainer, a Community Trainer with Meta Australia, a digital advisor with Business Station, an accredited Digital Solutions advisor and presenter, and the editor at The Small Marketer. You can watch free 1-hour webinars and grow your digital skills at Dante‚Äôs YouTube Channel.

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