Reader Question: How do I determine a niche to try out when I don’t have one specific stand-out type of client or particularly expensive problem? Just a skilled website-building, reasonably-coding-savvy guy?
First, Philip Morgan is the expert on all things positioning, specialization, and niching. I highly recommend checking out his resources:
In response to the reader’s question, let’s dive in a bit and look at the best way to determine a niche to try out when you have experience in a skill, but not necessarily specialization, positioning, or a target market.
‘Niching Down’ Vocabulary
When it comes to discussing niching down, there are a few terms that we should define so we ensure that we have a shared vocabulary:
- Discipline/Skill: That thing you do (coding, design, copywriting).
- Specialization/Expensive Problem: The specific problem/situation that you specialize in solving (launching your MVP, design your website, write a sales page).
- Target Market: The small, specialized section of the population that you’re targeting with your marketing (Shopify+ Stores, Bootstrapped SaaS businesses, Dentists).
- Positioning: What you’re uniquely known for in the mind of your prospects.
A slight digression: Positioning Statements.
Positioning Statements typically take the form of:
I help (TARGET MARKET) with (SPECIALIZATION) by (DISCIPLINE)
We can see how the act of creating a positioning statement (‘niching down’) in your business is really the process of identifying:
- Your discipline (what skills you use)
- Your specialization (what problem you solve)
- Your target market (who you work best with)
And then combining them into your positioning statement: what you’re uniquely known for in your market.
The Art of Niching Down
Niching Down / Positioning your business is as much art as science. It involves a lot of experimentation and testing — and chances are you won’t get it right the first time you do it, but that doesn’t matter, you did it.
You can always improve your positioning later, over time. What’s important is to start somewhere — anywhere — and then adapt based on what you learn.
‘Niching Down’ is the process of taking your service offering and making it appeal to a small, specialized section of the population.
Directive #37 tells us:
“You have to say, ‘How do we make it different from the others so that it is remarkable?’ Then you say, ‘How do we make it for the smallest possible audience?’”
How should our reader determine a niche to try out when they don’t have one specific stand-out type of client or a particularly expensive problem?
They have a strong knowledge of their discipline: website-building, code-savvy.
What they need is to:
- Identify an initial specialization (something within their discipline that they specialize in doing)
- Define a target market (it’s always easier to market to your ‘best buyers’ than market to ‘all buyers’)
Now, our reader has two interesting constraints:
I don’t have one specific stand-out type of client or particularly expensive problem
This is less of a problem than you (or the reader) might think it is.
In this positioning, our reader has a strong knowledge of their discipline (website-building, code-savvy), but is missing their specialization and target market.
In this situation, I often recommend a process of:
- Market Research, to identify the different types of industries that need your services/specialization.
- Interviews with Industry Members, to identify the expensive problems that are present in that industry
Market research is an iterative process. You don’t do it once, brush off your hands, wash the dishes, and say “Well, that’s done, forever!”
Instead, market research is a process that you repeat, regularly, to understand your target market (or identify a new one).
Being in the position of having a strong knowledge of a discipline but no target market or expensive problem isn’t the biggest problem. I encountered this myself in my history as a freelancer.
I was a Marketing Consultant and I worked as a bridge between Marketing, Sales, and IT departments to make sure the company’s website was meeting all needs.
It was a strong skill — I’ve got 10+ years of Internet Marketing and WordPress experience — but I was a complete generalist in terms of my marketing.
Not the ideal position to be in.
When I parted ways with that client, I was in a situation very similar to the reader:
- I had a strong skill
- I had no target market
- I had no expensive problem
I didn’t know who to market to. I felt trapped as a generalist.
I couldn’t niche down because none of my past clients seemed to be an ideal fit for a narrow (‘niched’) focus.
I felt that I couldn’t pick an expensive problem to focus on because I didn’t know what people in my (unknown) target market were experiencing.
So, I started to research.
I picked a few potential target markets that looked interesting. How did I pick the target markets for this short list? I evaluated them by brainstorming and then looking and seeing:
- Do they hire people with skills like my skills?
- To do what?
- How important are those projects to the client’s business?
This ‘first pass’ let me see if this target market was one that would be a good fit.
One of the markets I evaluated was “Shopify Stores.”
Do they hire people with skills like my skills?
To do what?
They actively pay for freelancers and consultants who can help them sell more, more often, to more customers online. ✓
How important are these projects to the client’s business?
Very! They directly impact revenue. ✓
How did I do this research? A combination of four things:
- Identifying 10-20 people who were active in the industry, following them on Twitter, and seeing where they linked to
- Identifying conferences that had taken place in the last two years and reviewing the speakers, talking points, and topics
- Reading 3-5 books on the industry
- Reading 5-10 articles on the industry
At that point, I had a strong understanding of the target market and their needs. At that point I was able to say “Okay, this seems like a good market to niche down to, let’s do a 3-month test!” and I’d do a small, measured, controlled test in that market.
I’d start by having conversations with people in that target market.
My favorite question to ask?
What issues are coming up in the next 6-18 months that could affect business in this market?
This was a question I’d ask so that as I started outreach to store owners, I could prepare talking points based on what other people had shared. Person A said that SEO is a concern? Let me ask questions around SEO!
Based on my research, I’d ask them questions about if they were hiring freelancers, what they were looking to accomplish, and if they were concerned about any upcoming issues that could affect their business.
The point of these conversations wasn’t to sell my services (though that happened by lucky accident a few times). The point of these conversations was to understand:
- If this market can afford to invest in services
- If this market is small enough and specialized enough
- The specific problem/situation that this market needs help solving
That is, I already knew what skill I had. This process of identifying potential target markets, researching them, and speaking with business owners in that target market was all to validate that this was a market that was worth working with.
How do I determine a niche to try out when I don’t have one specific stand-out type of client or particularly expensive problem? Just a skilled website-building, reasonably-coding-savvy guy?
What should our reader do?
I suggest this:
- Brainstorm a list of potential niches that interest you. Lean towards niches where you have some pre-existing knowledge, if possible. Look at people offering similar services/skills and see what markets they’re selling to.
- Take the top market on your list and start researching them. Collect information on their needs, where they spend time, and if they work with freelancers/consultants.
- Start identifying business owners in your target market that you can reach out to over email (http://outreachblueprint.com) to stimulate a conversation and learn if the industry is a fit for your skills
The point of this research is two-fold:
- First, you’re validating that this target market is actually a good fit for you and your business.
- Second, you’re filling in the blanks in your positioning statement “I help (TARGET MARKET) with (SPECIALIZATION/EXPENSIVE PROBLEM) by (DISCIPLINE)”