Is Niche Marketing Right for Your Advisory?

Trending

Written by: Katy Pultz

What is niche marketing? Niche marketing is focusing all your marketing efforts on one specialized service offering or for one well-defined target audience. And why should you consider the path less traveled?

Well, niche marketing can offer certain advantages. In fact, in our annual High Growth Study we found that high-growth firms (at least 20% growth year over year) are more likely to embrace niche marketing than their peers.

Firms that specialize in niche services and focus their marketing efforts there are also more likely to:

  1. Spend less on marketing. They focus on the most appropriate tactics for greater return.
  2. Enjoy greater margins. Honing a service allows them to perform well in their target market and be more profitable.
  3. Have a greater competitive advantage or clear differentiator. Specialization (and communicating this appropriately to target audiences) is a tenet of differentiation.

What about diversification?

Now, there are definite advantages to being a large and diversified organization. If you can offer everything and anything a potential client could ever want, your firm is more likely to stay busy and continue to employ a diverse group of talented employees. But some might say, this sets the firm up as a “jack of all trades, master of none.”

Larger organizations often grow by diversifying their portfolio, adding of client-requested services and locations or even through Mergers and Acquisitions (M&A). And while there is nothing wrong with this growth strategy, it’s important to revisit this strategic plan often.

Is niche marketing right for you?

Here are 5 questions to help you evaluate the fit of niche marketing:

  1. What’s going on in your industry? Take a breath and an unbiased look at your industry. Analyze your competitive landscape, along with the latest trends, common issues or challenges facing firms such as yours.
  2. Who are your target audiences (and what do they want)? Don’t guess. Internally generated focus groups and client experience surveys only go so far. What your clients and prospects say and do varies greatly depending on a variety of factors. Third-party research can help. Once you know the pain points and perceptions, make sure you have a solid plan on what to do with that vital information.
  3. What is—and is not—working with your current business model? This tends to be the one of the most difficult questions to ask, as the answers can be very nuanced. How healthy is your sales pipeline? How closely aligned are your marketing and business development teams? Are you engaging in proactive marketing or is marketing more of an afterthought in your organization? What is the effort you are placing on certain marketing activities versus the impact you are seeing from them?

Answers to these and other questions lead to the ultimate one: Can you afford (financially and organizationally) to make sweeping changes to your model or strategy?

  1. Do you have the resources to focus your efforts? This involves all of your firm’s professionals, including subject matter experts, your business development team and marketers. Are your technical professionals spread too thin? Technical professionals aside, is your marketing department at capacity? Do your business development and marketing teams have the right skills and roles in place? Once you make changes or revise your strategy, do you have individuals that can champion the overall initiative and see things to fruition?
  2. Do you have the time to see your efforts pay off?  Content development will be critical to help increase awareness and education among your targets. And it takes time. If you’re lucky, you may start to see initial results in as little as 3-4 months, but significant changes in your firm’s messaging can take up to a year to really gain traction. If your organization’s key stakeholders are not bought into the fact that niche marketing is a long-term play, you will set yourself up for failure.

The answers to these questions involve a lot more consideration (and likely a larger conversation within your organization’s leadership teams) to make the ultimate decision to modify your approach. Niche marketing is not for every organization, but it can be leveraged as one way to make you rise above your competition.

The other side of the fence

It’s also important to consider the potentially negative outcomes of a niche marketing strategy gone wrong:

  • A large perception gap. Regularly explore both external (customer) and internal (employee) perceptions to reveal any gaps between the two. Clients may have a very narrow understanding of what you do and make assumptions based on that perception.
  • An identity crisis. Your positioning can be difficult to define, especially with multiple stakeholders and newer employees who may not be as in-tune with your firm’s history and growth over the years.
  • Organizational silos. Decreased interaction among departments, verticals or markets often leads to a lack of camaraderie and the non-existence of cross-selling—the bane of many larger organizations.

Whether or not niche marketing is for you, at the end of the day, your prospects and clients should always feel like they’re the sole focus of your attention. Specializing in a particular niche can address this and help ensure your message hits its targets.

Related: The Advantages of Niche Marketing