Niche marketing and nest marketing are concepts which are often confused, or referred to interchangably, by advisers. They are not the same thing, and they are also not even mutually exclusive: you can do both of course. In fact I’d challenge the view that professionals should find “A” niche…why wouldn’t you have multiple niches? And a nest. Or perhaps multiple nests as well?
Let’s clarify the differences first though: The easiest way to think of the difference between niche marketing and nest marketing is this way:
A niche market would be (for example) “people who work as extra’s in the movies”.
A marketing nest would be (for example) “everyone who works for the same movie production company”
So a niche might be “stormtroopers” whereas a nest is “the Start Wars production crew & cast”. Further niches and nests can often be leveraged from these…
A niche is a target market of potential clients who have a lot of commonality, and are therefore easy to identify because they self-identify as members of that community. Similar circumstances, issues, needs, income and career situations….and as such when you understand how the world works for quite a few of them there is a very good chance that you understand the situation and needs for pretty much all of them. Common needs is what tends to bind this group and they think of themselves as being part of a “community”. If you can deliver superb service or product that matches the niche’s needs, then then there is a very good chance of you dominating that niche because of both your suitability and your perpetual presence. Word of mouth in the niche becomes your greatest marketing tool, because fundamentally they have common needs which you have been proven to be able to solve. The folk within that niche, driven by social proof, will gravitate towards making similar decisions (including which adviser to use) as the majority of others within that niche.
A “nest” on the other hand is as the name suggests: a place where there is a lot of folk who spend a lot of time hanging out together. They may not be anything like each other, but they congregate around a common interest. The most frequent common bond is often the same employer, or work premises. It may however be perhaps a community group or sports club. There is a common bond, but the individuals who share this bond are many and varied in their personal situations and needs, and typically the bond is not similar needs, but simply the similar interests.
The two concepts are not mutually exclusive as I mentioned: you can do both. But which is better when it comes down to applying your limited time and marketing resources?
The “nest” is best. If you want a variety of relatively high value work…or fewer people of higher acount value.
The nest is often best for financial advisers from the perspective of presenting more interesting and varied professional opportunities of rleatively high value, but it can be slower to onboard individual clients. It is easier to build a presence within nests, but converting that presence into paying clients typically will take a bit longer. BUT…the niche marketing typically pays off better in the short term because of the ability for you to leverage similar solutions to meet common needs, so you have the opportunity to do greater volume at lower delivery cost/client and that is largely driven by word-of-mouth. Word spreads faster (if you are good), and a greater volume of faster-to-convert enquiries is likely.
So we have one option presenting probably fewer (but potentially more valuable) work, and the other presenting greater and faster volumes of work. All the more reason then to consider doing both perhaps.
Niche marketing presents a great opportunity to rapidly leverage knowledge and expertise and build a strong reputation for being the “go to” person for particular problems, situations or types of clients. If done well there is plenty of scope to have multiple niches too of course, but one does have to be careful with positioning your overall brand and presence. The smart play in niche marketing is to have a number of niches where there is a bit of overlap. Why bet everything on just one sector? If your niche for example was self-employed quantity surveyors living in your region, there is a very good chance that self-employed architects have similar issues and needs, and while separate enough to be a distinctly different audience, they are near enough in attributes and professional circles of influence that by serving both niches you are able to use both niches as potential means of establishing a further presence in the other. They are complementary, and working one can help with working the other.
Nest marketing is a fabulous opportunity to acquire clients in some sort of volume, and reasonably quickly though Working all of the opportunities presented via a strong introduction or relationship should be a focus for any professional given the chance to do so. Positioning to be the employee benefits consultant (for example) for all the staff of XYZ Quantity Surveyors may well mean that you are working with admin staff, trades people, senior managers and so on from within the same firm…but doing a lot of employee benefits stuff!
The issue there is that advisers have a tendency to get caught up in the “being busy” part and having established a strong relationship and presence with a company or community they focus on dealing with the obvious and immediate opportunities, but not uncover all of the other potential prospects within the same group. At the very least when given the chance to position as THE professional one should be ensuring that you capture every single possible prospect from within that nest and then ensuring that they are brought into your ongoing full service advisory offer over a period of time. One cannot rush that without compromising the short term positioning though – it is the common need which tends to be the driver of the positioning in the shorter term so the common need must be the promary service offer.
Even if a number of prospects turn out not to be genuine prospects for your services they are all part of the community where you want to be known as THE professional. In other words, every single member of that community or company is to a degree an “influencer” of others within that community – whether they are your paying client or not. Every single one of them has an ability to influence the perceptions of others within that community or company, and every single one of them has an ability to be a referrer of other (and perhaps more ideal) prospects.
There is no doubt that niche marketing done well helps to establish reputation and positioning for any professional, and it should be part of the marketing strategy. It helps ensure long term success. Nest marketing typically presents more short term opportunities, which can help accelerate both the growth of the practice and the reputation and influence of the professional.
Strategically, niche marketing pays off. But tactically, nest is best.