Finding Your Niche

Today’s niche marketing is all about narrow, not small: Think Wide. Not Deep. Real Estate and Mortgage Professionals that will survive the future of their respective industries must give up the illusion of massiveness and present themselves as a strategic and defined provider.

The evolution of the real estate marketplace, along with the internet and other technology that allows the consumers to be in control, has created a shift from one-size-fits-all mass markets to millions of markets of self interest. All mature markets inevitably evolve into this kind of economy, driven by ever-narrower markets of desire and ever-narrower facets of individual self-identities. For example: American Girl is one marketer that already gets that 'niching' is the competitive strategy of the day. Its business objectives include improved share, margins and profits; faster growth; and the higher turns demanded by investors.

            In the real estate marketplace, competition drives up quality and convenience to the point where listing and selling a home or completing a mortgage loan application becomes commoditized. Look at Rocket Mortgage – press a button and you have a mortgage with no human interaction upfront. The only industry professionals who will thrive are those that can move beyond the “me-too” or have the ability to market more relevant products and are able to differentiate themselves to their competition. The only way to accomplish this is to focus on a narrower target. Go wide not deep.

            Isolating your people and their corresponding need and or problem is just the beginning. You must study and know your people as well as you know yourself. If you are a mortgage loan originator, for instance, you may be marketing to 'anyone who needs a two bedroom condominium for their new family and would benefit from your attention to detail and your great customer service!' Oh sure, they all say that. But if you specialize in non-warrantable condominiums within their specific geographical area, it tells me that you know my need, you know the industry language, you know the touch and feel that I'm looking for. You are an expert! Now I really like you!

            The compelling reasons for isolating your niche are many, this is just a sampling – but you get the picture. When you position yourself as the expert in a specific niche you will have greater clarity, stop chasing the illusive 'anyone who' and your world will become a much less confusing and stressful place.  

• So how can you choose just one niche to specialize in?
• Does it limit your sales or closed transactions?

           
            Remember that after you master your niche, you may choose another! But don't try to develop 2 or 3 at one time. Learn from your mistakes and your successes and then develop your second if you like.  And no, niche marketing does not limit sales. It is expansive and liberating! You will know how to reach your target audience, what networking opportunities to become involved with, you will know exactly what to say when someone asks you what you do, and the development of marketing materials will be a breeze!

            No business—particularly a small one—can be all things to all people. The more narrowly you can define your target market, the better. This process is known as defining your niche and is key to success for even the biggest companies. Walmart and Tiffany are both retailers, but they have very different niches: Walmart caters to bargain-minded shoppers, while Tiffany appeals to upscale jewelry consumers.

            Many people talk about ‘finding’ a niche as if it were something under a rock or at the end of the rainbow, ready-made. That's nonsense. Good niches don't just fall into your lap; they must be carefully crafted.

            Rather than creating a niche, many entrepreneurs make the mistake of falling into the “all over the map” trap, claiming they can do many things and be good at all of them. These people quickly learn a tough lesson, Smaller is bigger in business, and smaller is not all over the map; it’s highly focused.

            Creating a good niche involves following a multi-step process. To identify your own business niche, figure out how you can differentiate yourself from your competitors and what area you can specialize in.

1.      Make a wish list.

      With whom do you want to do business? Be as specific as you can. Identify the geographic range and the types of businesses or customers you want your business to target. If you don’t know whom you want to do business with, you can’t make contact. You must recognize that you can’t do business with everybody. Otherwise, you risk exhausting yourself and confusing your customers.

      Some clients may really value your services more than others. Think about the clients you’ve worked with and identify the ones who really understood the value of what you were offering to them and were happy to pay your fees. What do they have in common?

      These days, the trend is toward smaller niches. Targeting millennials isn’t specific enough; targeting male, African American millennials with family incomes of $80,000 and up is. Aiming at companies that have a minimum of 20 employees is too broad; aiming at Northern California-based companies that employee a minimum of 20 employees in the oil & gas industry is a better goal.

2.     Drill down your ideas.

    Clarify what you want to sell, remembering that a) you can’t be all things to all people and b) smaller is bigger. Your niche isn't the same as the field in which you work. For example, selling real estate is not a niche but a field. A more specific niche may be helping seniors downsize into senior communities with low maintenance patio homes. Perhaps you are a mortgage professional that specializes in working with down payment assistance programs for low to moderate income families.

    To begin this focusing process, use these techniques to help you:

• Make a list of things you do best and the skills implicit in each of them.
• List your achievements.
• Identify the most important lessons you've learned in life.
• Look for patterns that reveal your style or approach to resolving problems.

    Your niche should arise naturally from your interests and experience. The more you can personally relate to your ideal niche, the more successful you will naturally become. For example, if in your previous career you spent 10 years working as a car salesman in the automotive industry, you may decide to start a niche as the preferred mortgage lender for the automotive industry by exhibiting how homeownership can help with employee retention since employee turnover is at 70% in the automotive industry.

3.     Looking through the Looking Glass.

    See the world through your potential client’s eyes.  When you look at the world from your prospective customers’ perspective, you can identify their needs or wants. The best way to do this is to talk to prospective customers and identify their main concerns.

4.     Clarify your Vision.

    At this stage, your niche should begin to take shape as your ideas and the client’s needs and wants align to create something new. A good niche has five qualities:

• It takes you where you want to go—in other words, it conforms to your long-term vision.
• Somebody else wants it—namely, customers.
• It’s carefully planned.
• It’s one-of-a-kind, the “only game in town.”
• It evolves, allowing you to develop different profit centers and still retain the core business, thus ensuring long-term success.

    Clarify what you enjoy doing. Even within your field, there are some things that you like doing more than others. Do you prefer listings over buyers? Do you prefer FHA loans over conventional loans? What are the projects that you get excited about? Paying attention to what you enjoy is important, since we generally enjoy doing the things that we are already good at.

    Clarify what you don’t want to do. Almost as important as figuring out what you enjoy doing is figuring out what you don’t enjoy doing. Think about the projects that you drag your feet on or avoid doing. Instead of competing for projects that include work that you don’t want to do, leave those for others and concentrate on the ones that you’ll enjoy and will be a better fit for you.

    Where do you have the most experience? Think about how you have gained experience in your field. Was it through working for a large corporation, a small business, or a non-profit? Was it in a specific industry, or in a particular area within the broader field?

5.     Evaluate Your Decision.

    Now it’s time to evaluate your proposed product or service against the five criteria in Step 4. Perhaps you’ll find that the niche you had in mind requires more business travel than you’re ready for. That means it doesn’t fulfill one of the above criteria—it won’t take you where you want to go. So scrap it, and move on to the next idea.

6.     Take it for a test drive.

    Once you have a match between niche and product, test-market it. Give people an opportunity to buy your product or service—not just theoretically but actually putting it out there. This can be done by offering a sample to your targeted audience, such as a free mini-seminar or a sample copy of your newsletter. The test shouldn’t cost you a lot of money. When I relocated back to Chicago almost 15 years ago, I had to restart my entire mortgage business. I tested the Chicago divorce market by sending out my monthly newsletter, “Divorcing Your Mortgage” to a list of 100 divorce professionals. The immediate response proved to me that I could take my niche of working with divorce professionals in Denver to Chicago without missing a step.

7.     Let’s Roll!

    It’s time to implement your idea. For many niche newbies, this is the most difficult stage. But fear not: If you did your homework, entering the market will be a calculated risk, not just a gamble.