Differentiation in Marketing Is Important, but Having a Narrow Niche is Key
Pretend you’re the only company out there selling a waterproof flashlight. Without a niche — for example, underwater divers, swamp researchers or people who live near bodies of water — you’re not harnessing your ability to sell. You need a niche for differentiation in marketing.
At Avocet Communications, we help our clients identify a narrow niche so their efforts to differentiate are more effective. By making this part of your marketing strategy, you can save money, make money and attract more customers.
Our recent attitudinal research study found a gap between business marketers that believe in differentiation and those who believe in niching down. This tells us that many marketers aren’t getting the most out of their marketing strategy.
In today’s blog, we’ll discuss the gaps our research revealed, the benefits of niching down, and the steps to get there.
Differences Between Differentiation and Niching Down
Differentiation is identifying and communicating the unique characteristics of your products and services, especially in ways that show you are not like other competitors in your industry. Let’s say you sell mustard. There are a lot of companies out there selling mustard varieties. How do you stand out? What new problem are you trying to solve?
Most people are familiar with putting mustard on a hot dog or burger only to have the water and vinegar come out first, which leaves the bun soggy. Let’s pretend your company found a way to prevent soggy buns. That’s a unique feature that helps you stand out from the crowd.
Your niche shouldn’t be everyone — it should be people that love mustard. Sell to people looking for the perfect mustard for their hot dogs at sporting events. You could partner with stadiums, advertise during televised football games, and become the go-to mustard for the sports crowd.
Differentiation in marketing is valuable, but niching down makes your brand more distinct and your marketing team more efficient. It’s how you build targeted marketing campaigns that reach your ideal audience.
Belief Doesn’t Always Lead to Execution
Our research revealed a gap between business marketers who differentiate themselves and those with a niche.
Overall, 61 percent of business marketers say their organization firmly agrees in strongly differentiating from competitors, and 49 percent say they market in a way that highlights that differentiation. However, there is a 12 percent gap between belief and execution.
You need both a strong brand position and thoughtful and targeted audience segmentation to close that gap. Being able to articulate your brand’s offerings means nothing if you are speaking to an audience that doesn’t care. The execution gap happens because it’s easier to differentiate your product and scream its attributes to everyone within earshot. It takes more effort to define your niche and target messaging so it speaks to the buyers who matter (i.e., the ones who will become loyalists).
Interestingly, 50 percent of respondents say their organization strongly focuses on a narrow target niche for prospective customers, and 45 percent say they strongly market to a narrow niche. But there’s still a gap between those who believe and execute.
Additionally, more business marketers believe in differentiating in marketing than those who believe in the power of niching down. However, there’s only a 4 percent gap between those marketing to differentiate and those marketing to a specific niche.
At Avocet Communications, we believe that by focusing on a niche, you may be better able to differentiate in marketing successfully because you must know who your target audience is to niche down. You’re not trying to sell apples to everyone; you’re trying to sell apples to apple lovers.
These days, consumers are driving niche development in many industries. Looking at 700 million grocery store transactions, consumer spending has become more focused on products that suit specific needs. These trends reflect a rise in niche spending or purchases in specific product subcategories rather than across all categories. As a result, consumers are finding the exact products that speak to them.
There are coffee protein shakes with MCT oil for followers of keto diets. Health-conscious consumers drink coffee substitutes made with adaptogenic mushrooms to minimize caffeine and boost health benefits. DIY enthusiasts may buy kombucha kits to make fizzy fermented beverages at home. Every consumer seeks a satisfying way to start the day, but the products they purchase (and the companies they buy from) are vastly different.
Why You Should Niche Down
Recent research from McKinsey found that 80 percent of customers want personalized experiences from brands, and they’ll buy from a competitor to get them. Personalizing your customer experience can be a way to differentiate, but knowing who you’re personalizing it for by identifying a niche market is foundational. Identifying a niche market enables you to differentiate in the first place. Once you have your foundation, there’s a lot to gain.
By narrowing your niche, your marketing becomes more targeted. More targeted marketing makes you more likely to connect with an audience that wants to buy your products. Your marketing will be more effective if you’re completely clear on who you’re selling to.
Think of the mustard example from before. What would happen if you were trying to sell everybody your new and improved mustard? There’s a chance you may not connect with anybody. It’s the difference between saying, “Buy our mustard because it’s good!” and “Our mustard keeps soggy buns away from your tailgate.” Specific, targeted messaging is going to connect with the right audience.
When you connect with the right people, conversion rates soar, driving a greater return on your marketing investment. As we shared in a previous blog, 53 percent of business marketers are evaluated on how well they generate a return on investment from their marketing spending. Honing in on a niche market can help the business and create a pathway to marketing success, making evaluations less stressful for leaders.
Ignite Your Niche
After conducting the research, three distinct types of marketers emerged: Accomplished Marketers, Anxious Strugglers and Strategy Believers.
- If you’re like Accomplished Marketers, you may have already started or completed your work to niche down and differentiate — you’re on the right track.
- Anxious Strugglers have less confidence in their organization’s marketing. If this sounds like you and you worry about staff turnover and acquiring new customers, doing a deep dive into your niche may be just the thing you need.
- Strategy Believers know better marketing starts with strategy, and differentiation is essential for marketing success. But could niching down be the way to achieve it? If you’re interested in this approach, let’s talk. We specialize in helping organizations stand out and sell better.
To learn more about each segments’ behaviors and the opportunities they present, check out our entire executive summary and webinars. And to further ignite your own marketing strategy, check out our podcast.