According to some economic commentators, there’s a growing gap between the profitability of large and small businesses. Simply put, large businesses are making more money than their smaller counterparts. A study showed that the top one percent of the best performing companies worldwide reaped 36 percent of overall profits. Half of the businesses in the study were in financial trouble, although they remained solvent and operating.
Factors that contribute to this growing disparity include government regulations and the utilization of technology. Although some technologies are available to enterprises, both large and small, such as the services of business SIP trunk providers and the advantages of social media marketing, larger companies still have more market power.
Smaller businesses need the right strategy to stay competitive. Niche marketing may provide them with the boost they require.
The Nature of Niche Marketing
Niche marketing is the targeting of a specific stratum of the consumer market. This stratum is a very narrow and defined customer market that larger businesses may have overlooked. Their demands are much more specific than those of the mainstream consumer market.
For a small business, this means changing or offering services to cater to these specific needs. One popular example applies to businesses in the food industry. Instead of opening a standard restaurant, an entrepreneur employing niche marketing may start one that specializes in vegan food.
Targeting a niche segment reduces the competition of a small business. The smaller market also enables small businesses to narrow their focus and hone their skills to provide a niche service. An entrepreneur should be innovative enough to identify a niche market before other businesses can do so. Once the business has found its specific clientele, it should employ several strategies to stay ahead of possible competitors.
Carving Out a Niche
Keeping customers happy is one of the most important tenets of any marketing strategy, more so if they employ niche marketing. To that end, small businesses should make sure they find out as much as they can about their narrow client pool. A business must know more than just the basic demographics of its customers. They should have a deeper understanding of what makes them tick and, more importantly, what makes them spend their money.
One way to keep clients is to address their problems. Niche markets can be more competitive than the mainstream because the customer pool is very small. A business should provide solutions to its market’s problems before anyone else, or offer better alternatives.
A small business has to be aware of what competitors are doing to stay ahead. A company that integrates an innovation too late could get in trouble if they cater to a small market. Luckily, many agencies and computer programs, such as MixRank and Adbeat, enable entrepreneurs to monitor their competitors and keep tabs on trends. Doing so can provide insights that could lead to profitable decisions.
Today’s economic landscape is like an ocean, constantly in flux from shifting tides. Niche markets provide businesses with small ponds of customers they can harness for their own gain. But as the old saying goes, it’s better to be a big fish in a small pond.