The Problem With Niching

Most business and marketing experts will tell you that one of the first things you need to do in your business is choose a niche. Heck, I used to teach that! The right niche can make it much easier to market your services and can dramatically speed up the growth of your business. So yes, it is a very valuable step.

There’s a problem with niching as it is traditionally taught, however. Most business owners typically approach it from the outside in. They start here as the first step (which I no longer believe it should be). And they approach it as an analytical process of looking at your experience, demographic or industry groups that use services like yours, which groups have enough people to support the number of clients you want, which groups have the most money, etc.

But all that completely misses the mark. If you ever hope to be more than a mere commodity, realize that people don’t buy what you do. They buy why you do what you do. They feel a connection with your belief or cause, and they get on board as a client for their own sake, not for yours.

Which means that starting your marketing process with niche—choosing who you want to target based on certain external demographic or industry characteristics—perpetuates your positioning as a commodity. It might put you top of mind for your audience for a while, but what happens when someone else offers the same services to the same niche but at a lower price or with better packaging or with some novel feature?

I’d like to see niching redefined. It’s not about choosing your target market. It’s an organic understanding of who is the best cultural fit with who you are and what you do. Tackled only after you’ve clearly defined your passion (why you do what you do) and clarified how you are going to express your passion in the world.