the myth of “niche marketing.”
by bruce w. marcus
there is much ado, these days, about niche marketing and target marketing and using mailing lists and knowledge management.
how does it all come together to make sense for the smaller accounting firm, particularly when there’s a limited marketing budget, and a limited opportunity to reach out to the marketplace?
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in this report:
- the limited value of “niche” marketing
- six key variables to evaluate
- the role of target marketing
- the role of sales
- the fusion that creates total context marketing
- 15 steps to success in integrating and balancing marketing strategies
niche marketing is a valid concept, unfortunately inflated and distorted by suppliers of niche marketing materials. marketing niche marketing material doesn’t make the concept any less valid, although certainly a distinction should be made between the products of different suppliers. some are clearly better and more relevant than others.
what it means, simply, is that you find a segment of the market you could or do serve, and market your experience and capabilities to that segment. the segment can be defined in several ways. it could be a geographic segment – say, a 50-mile radius of your office. it could be an industry segment, such as health care, labor or the construction industry. it could be a skill or specialized practice, such as litigation support, valuations for divorce, cash management or immigration processes.
as often happens with buzz words, they tend to stray from their original meanings, and so niche marketing is now used to mean industry segment. too bad. there are so many other useful ways to segment and address a market. and so many other ways to do it.
niche marketing generally implies a form of mass marketing, at least in the sense that the same appeal (advertising, public relations, newsletters, direct mail, etc.) is made to a large group – a niche. litigation support services are sold to lawyers. estate planning is sold to wealthy individuals. but the appeal is singular. it’s usually buckshot. a newsletter to all litigators in a market area, for example. you buy a list.
there’s no question that this has value. but that value is limited by the fact that, in the final analysis, there are still a great many variables – and variables have a way of diluting, not enhancing, any effort.
the variables in niche marketing, for example, include:
- the list. whom the gods would drive mad they first put in charge of mailing lists. no beast is as difficult to tame as a mailing list. names and addresses change. there’s no way to know which names are qualified buyers and which are not. there’s no way to know which firms your competitors have already gotten to, and which are available to you. there’s no way to know how much it will cost you to get and service any of the names on the list – and some are cash cows and some are the lean ones that eat the fat ones.
- the quality of the material you send. ultimately, copywriting is an art form, as is writing newsletters or direct mail campaigns. you may be a better performer in your profession than your marketing material demonstrates – if indeed it gets seen at all.
- the nature of professional services marketing. advertising and other mass marketing techniques may sell products off the shelf without involving anybody from the company, but the ultimate sale for a lawyer or accountant must still be made by a lawyer or an accountant. no mass marketing technique in professional services can ever do more than open the door to an accountant or lawyer, who must personally make the sale.
- saturation. one need only look at the success of the leading suppliers of niche marketing material to realize that a lot of people on your block are going after the same prospective clients with the same general pitch you’re planning to use.
- the “ease of entry” myth. estate valuation or litigation support or intellectual property protection may look like a great untapped market, but are you really qualified or staffed to do it? or do you simply see it as a good marketing opportunity?
- the limitations of mass marketing for a professional service. herein lies the greatest paradox of professional services marketing. you can mass market toothpaste because every tube, and its contents, is like every other tube. what you say about your toothpaste applies equally to every user, and every tube. no two professional firm clients are the same; no two professionals perform the same service in the same way. this is a vast and significant difference.
this is not to say that there aren’t genuine values in niche marketing, under the right circumstances. if you have a specialty or a skill honed by experience and success with several clients, it’s certainly valuable to market that skill and success to others who need that service. if you’ve got a lot of clients in the construction field, and have learned a lot about the industry – its practices, its rules and regulations, its charts of accounts – then marketing what you know to other construction firms is a good thing to do.
but the little secret about niche marketing is still this:
it always comes down to selling the individual clients – one by one.
well… if you’re going to have to do that anyway, why not start with target marketing to begin with?
or better yet, why not use mass marketing techniques as a background to target marketing?
we can even give it a name. how about, total context marketing?
what does it mean? it means identifying and choosing your prospective client by name, and going after him or her with a broad spectrum of target marketing techniques, supported by a mass market campaign.
let’s take it step by step.
- define the client you want. a lot of ways to do this. location. size. industry. specialized need. your fee range. an industry configuration that requires a specific service. your definition, but do it in great detail.
- identify the prospect that fits your prospect profile. there are several ways to do this. it begins, of course, by identifying what it is you want to sell (and assumes that you’ve already determined that a market exists. don’t try to sell labor management services to a community of individual entrepreneurial farmers who use machines instead of people). then you identify the companies in your market area that you think would be great clients for you, because they fit your client profile. you find these prospects by…
- scouring your own lists of existing clients and prospects. there’s more gold there than you think. why existing clients? because the chances are that you’ve got clients for other of your services who don’t have the slightest idea that you can do this new thing for them, and that they need it.
- doing some simple secondary research. go to a library – or hire a research firm – and look up companies that you think might fit the bill. use simple research sources, such as dun & bradstreet, standard & poor’s and so forth. check all those online databases you’ve been reading about, here and elsewhere. frankly, it only takes a hundred or so companies to start with. and how many of those companies, turned into clients, does it take to make the whole effort worthwhile?
- prospecting. have a good agency do a great series of inexpensive ads that include requests for literature. if the ads are well done, and placed in the right publications, and the material you’re offering is worthwhile, you will quickly assemble a terrific list of targets.
- devise your campaign strategy.
- if you’re playing off a specialty you have (we’re back to niche marketing again), then use that skill for a kind of mass marketing campaign. but remember, that campaign is only the backdrop for target marketing.
- identify the key people who make buying decisions in the prospective company. this is your target.
- deal directly with that person to establish a relationship. write. phone. do a seminar and invite him or her. set up a regimen of regular mailings – articles, reprints, brochures, newsletters, etc.
- do it. strategy is a wonderful word. it rolls nicely on the tongue. but to make strategy more than a buzz word, you’ve got to…
- have a plan that’s realistic. no wishful thinking. know what’s doable, and who’s going to do it. don’t identify and market to 500 companies if you can’t cover more than 50 in one crack.
- be precise in your profile of your prospective client. start with the clients you have, as a guide to what you do for them and what you can’t do.
- be realistic about your partners’ commitment. everybody wants new clients. everybody wants to be in the swing of marketing. not everybody is willing to do it, or has the self-confidence and eagerness to do it. it’s easy to say yes to a strategy, and then get busy with billable hours.
- be professional in your marketing tools. writing a direct mail letter isn’t the same as writing a letter to a client. and even the newsletter you buy from a service should be looked at carefully to be sure that it’s specific to your firm, your service, your market, your needs.
- be organized. get it down on paper. who does what, and by when. more good plans slip away undone for lack of drive and organization and a good manager.
there’s a large element of networking in targeted marketing, as there is in any professional services marketing. it can’t be done from a distance, in the abstract, like product marketing. somebody has got to get out there and meet and court the prospect, in order to make it happen.
there is one more important factor in target marketing, one that’s perhaps the most important of all, especially for a growing firm.
a manufacturing company is defined by its products. a professional firm is defined by its client base, and the services the firm offers those clients.
target marketing – choosing your clients and then going after them with whatever it takes to win them – defines your practice and defines your firm. if you are what you serve, and to whom you serve it, then you’re better off hand-picking your clients than you are firing a load of buckshot and eating whatever it is that you hit. that’s why target marketing is better than mass marketing.