The Myth of the Niche

I hear a lot of people who claim to be marketing coaches or specialists extolling the value of having a niche, by which they mean setting out to serve a small defined group of people -and only that group – in whatever it is they do.

They are advised to make their niche as small and specific as possible and of course to restrict it to the people they believe are able to pay a premium for what they get.

Sounds great, but I’ve been in marketing since around 1970 and I’ve been a marketing coach on a top MBA programme for 20 years. I don’t know all the answers, but I reckon I know a bit about the philosophy of marketing.

A ‘niche’ is all very well and it’s a useful way of identifying how your market is segmented but the thing is, it’s not a starting point. Your niche is something you arrive at. It’s not (unless you’re already a recognised professional expert authority in a particular field) where you start.

What’s happening is people are confusing ‘niche’ with ‘target market’.

Your target market is a much wider description of the market you propose to serve than a niche. Here’s an example, when I left ICL to pursue an independent career as a consultant in project management in 1992, I had no idea I would develop within my target market of SMEs and corporates – a niche within asset management, particularly the management of linear infrastructure assets, specifically railways. I became sought after globally as an expert on managing rail infrastructure assets. (I can still do that by the way if anyone is interested).

Later as a coach/tutor on the MBA programme at Warwick Business School I came to specialise in information management. Not ‘IT’ but what companies do with the result of their IT. How they manage and take advantage of the information flows it generates and how the organisation behaves as a result. (I can still do that by the way if anyone is interested!)

Back to the topic at hand. Target Market vs. Niche. When I started a printing company back in 1970 I had a target market – Students Unions, because I’d been an executive member of the Liverpool University Guild of Undergraduates and we couldn’t get local printers to produce what we wanted in terms of posters, event tickets and so on – so I started a business doing just that, which expanded out to providing similar print to major UK organisations like Rank and Ladbrokes.

I never developed a ‘niche’. it was a wider scope of products and services serving my target market. I also took on other print including publishing poetry books and biographies as well as student guides and unlike many other businesses survived the austerity and infamous three day week regime of the 1970s. Technology overtook us in 1982 and I sold up and changed career to IT. We made a great living without having a niche, what we had was a well-defined target market with a much wider scope and whatever we didn’t want to do we farmed out to someone else.

If you’re starting in business or starting a new ‘different’ business, don’t get seduced into the idea of defining a specific ‘niche’ in advance.

A ‘niche’ (Cambridge Dictionary) “a hollow made in a wall, designed to put a statue in so it can be seen” or “something interesting to, aimed at, or affecting only a small number of people”. In effect being in a niche blocks you off from all but very few potential clients.

It’s your target market you need to identify, and this isn’t what you want to do but who you want to serve.

In the 1970s I chose student unions and new students and provided them with what I was doing (printing and publishing) to meet their needs.

In the 1990s it worked out a bit differently when the market presented itself. The UK rail industry, in turmoil after privatisation, needed someone to help them out of the mess, which was all the information about how the national rail system ‘worked’. I found them to be an ideal customer for the information management skills I’d developed.

In both cases however what I ended up doing from my portfolio of skills was market driven and about what they wanted rather than what I wanted to do.

Once you or I have become established in it the market defines the ‘niche’. We can’t do it in advance.

As usual if you need help or want further information just contact me.