Niche Marketing – The Riches Are In The Niches

I might be a little behind or slow on the uptake, but the first time I heard the phrase “the riches are in the niches” was about a year ago. When I heard the term, I was a little embarrassed that I hadn’t 1) thought of it first or 2) even heard it before. After building a career in marketing, and being exposed to basically every type of marketing including direct, brand, event, and more, the phrase really makes so much sense. Most of us have heard of niche marketing before. If you have, then “the riches are in the niches” resonates with you. What exactly do I believe it means?

To me, it means this. If you are marketing a product or service, your first instinct may be to attract as many potential buyers of that product or service as possible. Your thought might be that if you cast a wide enough net over as many potential buyers as possible, you increase your chances of the number of people that will buy the product or service and therefore will generate sales or awareness. Niche marketing takes the opposite approach and rather than casting your marketing message over a wide swath of potential buyers, the discipline says to focus on a subset(s) of a wide universe of potential buyers who will be the most passionate, interested and loyal about your product or service, who will engage and influence other like-minded people.

To make the comparison using numbers, one camp believes hypothetically that you should cast your marketing message to, say, 10 million potential buyers, with a goal of getting 1,000 one-time buyers; the “niche marketing” camp believes you should expose that same marketing message to 1 million potential buyers, with a goal of getting 100 avid, repeat buyers – which will ultimately make more money, and create greater sustainability and long-term health than the first camp.

As you might guess, my biases sit in the niche marketing camp. Why? Because I know it works. I see it every day, have seen it for decades, and I’m not alone. I was reminded of this concept while reading a recent piece in Ad Age. The author uses social media as one example, and says (main emphasis for me in bold):

“There’s still an irresistible urge to build an audience at scale. We feel we need to get our message in front of as many people as possible, so we put all of our efforts into generating followers and likes and +1s. Then once we build this mass audience, we communicate with it and many times sell against it. And we keep being confronted by the fact that this audience is still too small, compared with the larger audiences of traditional and digital ad spending.

Yet, there’s real value hiding within the smaller subsets of any aggregate audience – a value we are simply not tapping. Hiding within your 20,000 or 500,000 Facebook friends and fans are always a dozen, two dozen or a hundred true advocates who can sway the rest of the community. They are the ones stirring the pot and continuing the conversation. They are the ones that engage with you the most. Often they are the ones who challenge your actions and cause you trouble as well. These are your loyalists – and traditional advertising methods used in this space treat them exactly like everyone else.”

I believe this premise holds a lot of water, and it speaks to precisely to niche marketing even though the author doesn’t phrase it that way. Niche marketing focuses most intently on the subset of customers or loyalists who truly engage and advocate for your product or service. It focuses on those customers who, quite frankly, will spend the most money with you. It focuses on reaching not the most number of people, but the most number of customers.

After all, not all customers are created equal. So when looking for prospects, before they become customers, you have to think about them differently too in your marketing.

The riches are in the niches.

Technology and social media today make it very alluring to throw an enormous net over your potential customers quickly, easily and cheaply in the spirit of scale. In some cases, perhaps even a lot of cases, this is good and necessary; for instance in brand-building and awareness campaigns. But if you are marketing something with an eye towards making sales, getting customers, and growing the lifetime value of your customers, it pays to think small and focus on your niches.

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Niche Marketing – The Riches Are In The Niches

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