When you think of a niche, is it a smaller slice of an industry?
There’s a lot of well-meaning gurus who will tell you to target that slice. But…
Serving a niche is a necessary, but insufficient strategy for success.
20 to 30 years ago, you could provide general services to a niche, even a large one like law firms. My advertising agency I started 26 years ago served a broad range of businesses with a bunch of online and offline services.
About 15 years ago, you had to provide a specialized service to that niche. Five years later, you had to have a specialized service to a niche within a niche.
Two of my clients are prime examples. One tried to break into digital marketing for law firms, but wasn’t getting any traction. So he specialized in SEO for attorneys. He started 16 years ago and took ten years to hit $8 million/yr revenue.
The other client started about 5 years ago by trying to do lead generation for attorneys and struggled to get clients. He switched to social media advertising for personal injury attorneys and started closing clients like crazy - 225 in a single year.
You might be thinking, “I’ve seen dudes succeed without specializing in a niche within a niche.”
And you’d be mostly right. They look like generalists, but they solve a specific problem with a unique solution that I’ll call a ‘mechanism’.
Solving a problem gives you a larger total addressable market (TAM). But it is so much harder to stand out.
A dentist who can’t get patients to buy his most profitable service is likely to choose the sales trainer who specializes in sales of that service specifically for dentists.
It makes sense to the dentist because it feels like it’ll be easier to succeed.
But a sales trainer with a unique mechanism like Chet Holmes had with the Ultimate Sales Machine, attracted every business type who had a sales problem because they believed his unique system would work for them.
How this all fits together for you…
When you’re in your first year or two of business, I recommend you limit your TAM to a specialization for a niche within a niche.
Two things happen:
- you get good at solving a problem that people outside your niched niche have.
- you develop a unique mechanism for solving that problem.
If you’ve been in business longer than 3 years and you’ve got solid traction, then you should codify your unique mechanism and start promoting it. First, within your niche, but then further into your industry (ie personal injury —> all law firms).
The more traction you get with your expansion, the further you can expand.
My old friend and mentor, Joe Polish, started by doing marketing for carpet cleaning companies. But then he got really good at marketing and helped other businesses within his network with their marketing. That led to him working with Bill Philips of Body For Life fame and supplement companies, MET-Rx and EAS.
Joe’s success with Bill brought all kinds of businesses to him. So much so that he wrote a single letter in 2007 to his network of high-net worth business owners to join his $25k group. He thought maybe 20 would sign up for the $25k fee. 40 joined within a few days.
That group turned into the highly successful, Genius Network, which does north of $9 million/year today.
I shared this story to show that you can start out humbly in a small niche, succeed there, and then grow into unlimited opportunities.
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PS. Here’s a framework you can use with Claude or ChatGPT to help you identify the problem you serve. Instruct the LLM to guide you through the exercise. Make sure to tell it to push back and not simply take easy answers from you.
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