Niche Markets FAQs Part 1 of 2: Basics

This is the 4th of a five-part Facebook Live series on topics related to business development and strategic planning.

Many of my clients are independent healthcare practice owners who have trouble growing their business in a healthy way. I find that practitioners often struggle to attract patients who fit their philosophy and goals. Not every customer is Ideal; some potential customers can actually take value away from your business.

The best way to attract the right customers—those who are interested in your services and eager to pay for the value you provide—is to focus on a Niche area. This is a specific set of services or products that meets the needs of your Ideal Customers and solves their unique problems.

Watch my Facebook Live video, where I discuss ways to increase the effectiveness of your business, and how to stand out in the marketplace. Or read a transcript (including bonus content!) below.

Facebook Live #4

Topic: Niche Markets

Originally recorded: Thursday, 08/09/18 10:30 a.m. – 11 a.m. Pacific Standard Time

 

Introduction

The word niche comes from the Latin word nidus, which means “nest.”

I love the idea of creating a nest for customers. Like a nest, a niche market is a distinct area of the many possibilities in your market.

You could serve a variety of people, offer a variety of options, or provide a wide range of expertise. But trying to offer too much is actually really confusing to buyers, and it can cause them to feel uncomfortable… which will cost you dearly in lost time, effort, and money.

Instead, consider specializing in one particular area of expertise, pain resolution, or demographic. A niche provides a specific solution that serves the needs of that market.

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Definition of a Niche

By deciding on a smaller, focused target area to attract your customers, you are building a nest: a comfortable, trusted environment that helps your target customers to solve a significant problem.

Consider how this might look for your business. Where could you focus all of your effort in order to increase the profit margins (the difference between what you spend and what you get in revenue), while also solving your customers’ needs in the best possible way?

Destruction, Limits, and Growth

I believe that in order to set good limits, we must first destroy long-held beliefs.

Although the word can sounds awful, destruction is actually a part of growth.

Consider biology. For a plant to grow, its seed must destroy itself before the rest of the plant can emerge. A shoot grows above, and the roots form below. Once it starts to grow, the seed fulfills its mission, and it no longer needs to exist. The seed has potential; but for growth to happen, it must be destroyed.

In many aspects of life, we have to let go of things and “destroy” the old, in order to appreciate the benefit of the new.

Debt Can Paralyze Your Business

In my opinion, materialism and consumerism often stand in the way of healthy growth.

When we rely on debt to sustain a business, it can paralyze and restrict the owner’s ability to expand. Yet many business owners get caught up in the debt trap by spending money in anticipation of future earnings.

From the outside, this owner can really successful. But financially, they may be struggling to the point where the business is not succeeding at all.

I’ve talked to business owners about the topic of debt, and I know how the choice of “growing the business” can leave them feeling paralyzed. Not just emotionally, but also financially and socially. They get into a situation where they can’t communicate freely with other people, because nobody else seems to struggle with the same problem.

If you’re interested in how to save significant money and avoid getting into debt, check out “The Millionaire Next Door” by Dr. Thomas Stanley and Dr. William Danko and and “The Millionaire Mind” by Dr. Thomas Stanley.

I learned so much from their perspective after interviewing dozens of self-made millionaires.

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(Hint: They found that the key to saving $1 million is to not spend everything you earn, to be content with fewer possessions, and to save every penny possible).

It’s important that we communicate and rely on each other. Inter-connectivity is really important in business ownership. But because of the strong social forces to consume and look outwardly successful, I think it has taken away the opportunity to connect in a deeper way.

Explore Customers’ Needs

I believe we can enhance relationships if we focus on the niche areas that makes your business stand out, and connect with customers’ basic needs.

This can be an interesting question to explore.

Consider asking your customers: “What problem do you need to solve?” and “What will happen if nothing changes?” It’s best to gather feedback from as many Ideal Customers as you can, rather than assuming what they need.

You might discover the need to offer new services to solve problems that you had never considered before.

This is something I have done in my own consulting work. A few years ago, many of the services I now offer did not exist. After conversations with clients, I realized that what they really want is a deep-dive Discovery into the strategic risks they are facing, and also accountability coaching with an expert who will ask the right questions.

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Two years ago, I wouldn’t have thought those services were important. But because I’ve had these conversations, I started to ask the humbling question:
“I’m not quite sure if what I’m offering is what you want. Tell me: how I can provide more value to you?” Based on their responses, I tailored my services and got rid of several things that weren’t producing results.

Consider how you might purposely limit the types of services you offer, or the types of customers you serve (which we will get into the next FAQ topic on Ideal Customers).

Limits in Setting Goals

Limits are an important part of goal-setting.

The CLEAR acronym originally developed by Adam Kreek includes the word “Limited.”

SMART goals, CLEAR goals, goal-setting
Grace LaConte’s take on SMART and CLEAR goals

An essential step in developing goals is deciding how to visualize a future point and realize that we can’t do EVERYTHING.

You can’t try EVERY occupation.

You can’t live in EVERY house or own EVERY sports car.

Obviously, we want to “dream big” and to set huge goals. But we also need to realize that having “everything” is not feasible, or even healthy.

Setting goals with an understanding of your limits is really important.

Establishing a niche—and setting limits about what you’ll do, who you’ll serve, and which goals you’ll set—is the opposite of attempting to be “Everything to Everyone.” By trying to serve the needs of a large number of people at the same time, you will eventually burn out.

The “Everything to Everyone” mentality is, I believe, driven by

  • a fear of not succeeding,
  • a fear of hurting others’ feelings,
  • a Fear of Missing Out (as I’ve mentioned above)

Those fears can drive us to feel overconfident about fixing problems.

When a potential customer asks “Can you also provide this service?” or “Do you carry these other products?” it’s tempting to respond,

“Sure! Yeah! We can do that too!”

“Anything you need, we’ll make it happen!”

I think this mentality often comes from a lack of self-confidence that the services you’re offering have a lot of value. So when you hear someone asking for something different, you might immediately agree to offer it, because refusing might make it seem like you’re unable to solve problems or run your business well.

But this is a destructive thought process, because it will distract you from the core tasks that bring you closer to target customers, and also the actions that build strong relationships.

Read more about The 4 Responses to Fear as a Leader

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Why Setting Limits Can be Freeing

Conscious limit-setting can also be called Purposeful Limitation and Voluntary Simplicity.

Setting limits means choosing to live with confines in order to focus on reaching your goals.

It means reducing the options in order to have more FREEDOM.

Yes, we can have everything we want and everything we dream of. But it can only come if we set limits.

Recently I was thinking about a book called The 4-Hour Workweek by Tim Ferriss. He’s a brilliant guy; a little bit wacky. He’s done things that I don’t think most humans have done: experiments on himself, and pushing his body and mind to the limit.

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A few years ago, he wrote this book after testing how effective he could be in reducing the number of hours he needed to get the most productivity in running a self-perpetuating business.

Which process would bring the higher profit with less effort?

How could he enjoy a luxury lifestyle with just a handful of work hours a week?

Tim tried a variety of methods until he found a way to do this. Obviously, he doesn’t only spend 4 hours a week on work-related tasks. He does a lot of things to stay busy; he probably works about 80 hours a week on things related to his many business interests. His enjoyment makes it not feel like work.

We can apply Tim’s theory by reducing the number of tasks, and boiling down your business into the fewest things that will result in moving toward your goal.


In upcoming posts, I’ll be answering Frequently Asked questions about Ideal Customers, as well as continuing the Niche series on these topics:

  • The Truth About Why It’s Hard to Set Business Limits
  • Why a Niche Market Can Benefit Your Business
  • Can Limits Actually Destroy a Company?
  • What Happens When You Purposefully Limit Your Options?
  • 8 Strategic Drivers to Help Narrow Your Business Niche

 

If you are wondering how to niche your company want to discuss some pre-marketing steps to reach your sales goals, schedule a free 30-minute consult with me today.


Grace LaConte is a Strategic Risk Expert who helps service business owners find and fix organizational vulnerabilities. Using her experience as a Risk Officer in the healthcare and technology fields, Grace shares a refreshingly honest approach to uncovering hidden risks and opportunities. Learn more at http://laconteconsulting.com, or connect with her on Twitter @lacontestrategy.

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