Targeting Niche Markets

Targeting an industry niche is a very effective, yet underused marketing strategy in the financial services industry. It can be hard to create a reputation for yourself when your marketing approach is “shotgun.” On the other hand, when you target a very specific industry niche, it’s fairly easy to elevate yourself to “celebrity status.”

Let’s start out with a definition. To me, targeting an industry niche means: Positioning yourself as an expert in a target industry as it relates to financial services and leveraging that expertise and reputation with appropriate marketing techniques so that people in the target industry will think of you first, and refer you first. I’ve seen this approach work with great success across a diverse set of industries including insurance, medical, legal, entertainment, sports, restaurant and franchise.

Marketing vs. Selling

I’ve seen a million definitions try to underline the key difference between marketing and selling. To me, it’s simple. Marketing is all the activity that makes the sale possible. Marketing makes people aware of your product or service and puts them in a position to meet you so that the sale becomes possible. Marketing is what gets you to the client’s door in the best possible light. Sales strategy, on the other hand, is everything you do once you’re inside. The ideas in this column fall in the category of marketing. These are things you can do to increase your reputation so it becomes easier to attract people to your business.

The Benefits of Targeting Niche Industries

There are at least three compelling reasons to target an industry niche:

1. Word-of-mouth becomes easy to create because people within industry niches have specific ways of communicating with other—conferences, newsletters, trade publications, industry associations, and study groups, etc. A reputation for quality work can be built rather quickly within a niche.

2.Referrals become easier to obtain. People within industries usually have many friends and colleagues to whom they can refer you. When they know you are concentrating your efforts on their industry, they are usually more willing to help you expand your influence. In my own niche marketing efforts, I have rarely met a client who was concerned about me calling on the competition. In fact, they’re quite often on very friendly terms. I’ve received some of my best referrals this way.

3.Cold calling within an industry niche is usually a much warmer proposition. Once your reputation is established, there’s a good chance your prospect may have heard of you. If they don’t know you, it’s still easier to warm up to them on the call because you know their challenges, you speak their language, you are an expert in their industry and you truly have more value to bring to them than a generalist.

C. Richard Weylman, CSP, professional speaker and author of Opening Closed Doors: Keys to Reaching Hard-to-Reach People, puts it this way:

“To demystify the process, look at how people interact and build mutually rewarding relationships with one another. You will realize quickly that they usually organize or associate with one another based on what they do for a living, or what they do for recreation. Many also organize and associate based on their social, charitable, cultural or community interests and ethnic backgrounds.

“Remember the truism ‘Birds of a feather flock together.’ People associate and communicate with other people like themselves. For instance, people in the same type of business or profession join together in an association. To gain access to the marketplace, we should then divide it based on what our prospects do for a living, for recreation or where they have special interests. The advantage is that by segmenting your marketing into niches in this way, you can reach out to prospects that associate and communicate with each other. This means you can find and associate with them. They, in turn, can find and associate and communicate with you. Without these two factors, your marketing and prospecting efforts will continue to be frustrating and expensive.”

I have a friend who is a sales representative for an advertising agency. She says that working these principles of niche marketing is like trying to move into a new lane while waiting at a traffic light. If you begin to inch over, trying to squeeze your car into the small space between neighboring vehicles, you may not get in. However, if you just catch the eye of the driver of the car you wish to cut in front of, he or she will almost always wave you in. Establish some recognition, and you’ll be let in. The same is true in sales. If people have heard of you, even if they’re not sure where or why, you can get past the gate-keeper. Before you know it, your voicemail messages are getting  returned. A widespread reputation overcomes barriers.

People Buy what’s Familiar

Maybe you’ve heard the old story of the young man who joined the military and was stationed overseas for a year. Before he left, he bought 365 postcards. He mailed one to his girlfriend every day. For about 10 months, she wrote back regularly. Then her letters stopped. When the young man returned home, he found his girlfriend married to the mailman. People buy what’s familiar.

It’s About Added Value

When you target an industry niche, both your perceived value and actual value increase. When you get to know an industry, you can bring more value to the relationship with a new prospect faster than if you know little about his or her industry.

It Takes a Commitment

Whether you are a rookie or a 20-year veteran (or somewhere in between), targeting your marketing efforts at an industry niche requires a high level of commitment to the process. Reputations are not built overnight. Until a critical mass of activity within the niche is reached, it may seem that your time and efforts are not producing a good return on investment. However, once that critical mass is reached, your growing reputation virtually takes on a life of its own. When you target an industry niche, reputation is everything. You need to go the extra mile. And you can’t burn bridges, because word-of-mouth spreads faster within specific industries. Every transaction, every encounter, has to be handled with the utmost professionalism. Within the niche, everyone is a prospect, at least in the sense of helping your build your reputation.