There’s no question about it: capitalizing on a specific niche can be highly lucrative. Although, while specializing does open new avenues for earning and the potential to interact with different companies, it also has the side effect of limiting a company’s scope and potentially alienating existing clientele.
Before an agency decides to go this route, the leaders need to carefully consider some pertinent facts, ranging from the market’s potential to the team’s passion for the work. Below, ten contributors to Forbes Agency Council share some of the key considerations for any agency that wants to niche down.
Forbes Agency Council members think you should consider these points before choosing a business niche.
Photos courtesy of the individual members.
1. Who Your Audience Will Be
Who do you truly want to help? Your work should focus on making a difference in a particular niche, and your ideal clientele are going to want to know why they should choose you and what you bring that is unique and special for their industry. Once you know your “why,” you can move forward with integrity to specialize and really soar. – Lynne Golodner, Your People LLC
2. Your Long-Term Viability
Before you settle on a niche market, it’s important to consider your long-term viability. If your business only works with medical centers in your state, for example, how long would this be feasible before you run into noncompete clauses? Our company promises not to work with our clients’ direct competitors, so a specialization in this niche could potentially limit opportunities for growth. – Adam Binder, Creative Click Media
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3. If The Niche Is Underserved
We started to exclusively focus on smaller dental and medical businesses in 2017. The reason for repositioning was that these businesses were ignored by agencies but needed the most help with digital marketing, online reputation management and patient satisfaction measurement. This segment of healthcare delivery businesses in the U.S. is vital for society but not getting proper attention. – Ajay Prasad, GMR Web Team
4. Your Staff’s Expertise
Ask yourself questions like, “What is my staff’s expertise?” and “Can I hire subject matter experts?” If you have an agency staff who can rally around specialization and you have their buy-in, keep them by involving them in a winning business that matches their interests. – Kathleen Lucente, Red Fan Communications
5. If The Niche Can Weather Storms
Make sure your niche can weather storms and that you’re not putting all your eggs in one basket. Covid has certainly shown that some industries can be decimated by outside influences. If you’re going to specialize, be sure that your niche won’t suffer when the economy turns down or be affected by other outside influences. Having multiple revenue streams with residual income will ensure you stand strong. – Jason Wilson, Strategy, LLC
6. The Size Of Your Market
Owners of a digital marketing agency should consider whether or not the niche they are looking to target is big enough to support the revenue goals they have. If you want to specialize in marketing for roofing companies, for example, you need to consider how many roofing companies are within your service area. The last thing you want is too few prospects and not enough clients. – Garrett Atkins, VIE Media
7. What Problem You’re Solving
I’m convinced that niching down and doing less instead of expanding is key to business success. The market doesn’t need more generalists. It needs narrow specialists. So first and foremost, identify the fundamental problem that you solve for people. Next, figure out how you are going to make it work and what resources you need. These are the most important things. – Solomon Thimothy, OneIMS
8. The Customers You Might Exclude
The main thing to consider beforehand is that you end up excluding many customers whom you may have attracted without the specialization. In the end, though, it’s all about your focus. Thanks to your specialization, you can attract your dream clients in a highly specific way, improve your processes and thus scale strongly, which is essential for a successful agency. – Markus Hetzenegger, NYBA Media GmbH
9. Your Passions
Are you truly passionate about it? I considered moving my agency from a business-to-business tech focus to an even more narrow focus like cybersecurity. I ultimately decided that while it might make sense on paper, it didn’t reflect my passion—which meant it ultimately wouldn’t be successful for me. My team works with a broad range of tech clients and we like it that way, which means we do better work. – Scott Baradell, Idea Grove
10. If The Work Will Continue To Inspire You
Will this work continue to inspire you? A few years ago we turned our focus to healthcare marketing, and during that time I really understood that, while it was lucrative, it was not inspiring me or my team. Changing back to serving a wider base took a few years because we got pigeonholed. Really consider if this is a permanent change and think about the ramifications. – Christopher Tompkins, The Go! Agency
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Author: Expert Panel®, Forbes Councils Member
