Advertising, Attitude and Success, Customer Demographics, Customer Retention, Local Business Marketing, Marketing, Restaurant & Food Service, Restaurant Marketing, Retail, Small Business, Small Business Goals, Small Business Marketing, Small Retail Business, Success in this Economy

How to Identify Your Niche Customers

2 Comments 04 March 2011

As we explained in a previous article , the key to locally owned businesses surviving and thriving in a competitive, online marketplace and tight economy is to find and dominate a niche of their own.

Small businesses can’t compete with the advertising dollars and inventory numbers of huge national chains; they can establish themselves by finding a specialty and being the best in it.

You Can’t Please All the People

The toughest part of becoming a successful niche business is realizing that you simply won’t be able to make everybody happy. If you choose to specialize your small business in science fiction, for example, then you won’t gain a following of classic literature lovers. But you will gain science fiction fans. If you choose to specialize your locally owned restaurant in a specific type of cuisine, perhaps Italian, then you’ll lose the people who don’t like pasta. But you’ll have fervent and loyal customers in the pasta lovers.

The Trade Off

For a business to succeed in a specialty or niche, it has to make a trade-off. You trade the complacent, so-so, average customers for the fervent, dedicated, enthusiastic ones. Sounds like a good trade, right? It is, because a few enthusiastic customers will give you more in lifetime value and passionate referrals to their peers than many average customers.

Finding Your Enthusiastic Fans

The first step to identifying those customers you want to find and keep for the life of your business is to clearly define your specialty. What are you offering that’s different, better, or more unique than your competitors? Once you’ve identified your own niche – your special offering – you’re in the right position to find the people who will be interested in what you have to offer.

The second step is just a bit of simple brainstorming: who is going to be the most interested and the most enthusiastic about your specialty, your niche? Don’t focus on the people who might be interested. Focus on the people who will love what you offer. If you’re selling science fiction books, you need to be at the sci-fi gatherings, clubs, and conferences, and partnering up with the local theater when the next sci-fi movie opens. Market yourself to the most passionate people in the particular niche; they, in turn, will market you to the people they know. When you find and convert enthusiastic customers, they do the advertising for you.

Places to Look for your Niche Customers

  • Specialized online communities and groups
  • Local clubs and meetings
  • Conferences
  • Meet-up groups
  • Fan clubs
  • Organizations and associations
  • Trade shows

Note: If your “niche” is too big to define and go find in groups like these… then your “niche” isn’t a niche at all – and you need to work harder to find your small business’ niche – a truly narrow scope or specialty that will create a winning formula for your business in a difficult economic time.

Where would your ideal customers hang out? Where do they gather? That’s where you need to be.

Image by Rachel Voorhees.

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Your Comments

2 Comments so far

  1. One other big advantage, that you didn’t mention, to doing business in a specialized niche is that, most of the time, there is less competition.

  2. Extreme John says:

    Identifying your niche would not only create less competition but also, improve your specialization. The more specialized your products are, the easier it is for customers to remember your brand. This is a very helpful post.


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About Marianna Chapman

For the past 15 years, Marianna Chapman has been creating game-changing big ideas resulting in big returns for dozens of businesses and communities across the U.S.

Today, Marianna and her team help business and non-profit clients at Big Idea Company, Inc., writes the Results Revolution blog, serves as Executive Editor for Eat Cities, LLC media outlets, and is a frequent speaker to national and regional conferences.

Marianna is a professional problem solver and rainmaker for hire.

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