Niche marketing shortens the time you spend making a sale, maximizes the use of your marketing dollars and increases the percentage of prospects who actually buy from you. Take a look at how some NASE Members and other self-employed professionals have successfully defined and exploited niche markets.

Expand By Narrowing
Computer programmer Peter Shikli started writing customer database software for all types of companies in the mid-1980s. But as competition increased, his firm, BusinessWare Inc. in San Clemente, Calif., concentrated on engineering clients. And Shikli stayed with that niche when he added Web site development to his services.

“By cutting our market to a fraction of what it was, we were immediately able to focus our marketing,” he explains, “and half our prospects hire us, compared to 10 percent when we tried to sell to everyone.”

Screen printing is another highly competitive industry where the self-employed find they get more business if they target a niche. Some concentrate on youth sports teams and schools. Others sell to corporations or even companies within a specific industry. A Unicorn in Anaheim, Calif., specializes in anti-drugs messages on T-shirts that are sold to 12-step recovery shops worldwide. But The Main Tees in nearby Costa Mesa, Calif., keeps its customer base within a 10-mile radius.

NASE Member Robert Roslavsky, owner of Skyscapes aerial photography in Worcester, Mass., also limits his geographic reach.

“I fly out of my local airport, and if the shoot is more than one-and-a-half hours away, it gets cost prohibitive. Plus it takes all my time,” he explains.

Many of Roslavsky’s clients are real estate or construction companies or golf courses. But within the real estate niche, owners of properties worth more than $1 million are far more likely to buy his services than others, he says. However, Roslavsky’s geographic market is still large enough and populous enough to make a good living.

Strong Vs. Weak Niche
Roslavsky has perched himself in a strong niche. That is, he has little competition in his specialty.

“Only 10 percent of professional photographers do aerial photography,” he says. “I’m the only aerial photographer in the Worcester Yellow Pages and one of the few in the region.”

Many building contractors strengthen their niche by specializing in specific work such as repairing squeaking floors in older homes or installing new windows and doors. They focus their marketing efforts in neighborhoods of a certain age and income instead of launching costly mass-media campaigns over large geographic areas.

Stores and services that depend only on being convenient are in a weak niche, because competitors can move in at any time. Businesses that try to offer the lowest price are in a weak niche, too, because people who buy on price alone are fickle. As soon as a competitor sells for less, these price shoppers are gone.

Thomas Myers of Myers Building Maintenance in Tustin, Calif., found that carpet cleaning was a weak niche. Many competitors offered to clean three rooms for the price of two or $29.95 specials. However, Myers discovered that he could charge higher prices and face less competition if he concentrated on repairing water damage to carpets after floods, fires or waterline breaks.

Research The Field
Research potential niche markets before you add a new product or service. Census data, regional economic information and Internet searches can assess how much competition an industry has and identify segments within that industry that are underserved. For instance, most communities boast several employment agencies. That’s why some agencies specialize in computer programmers, others favor clerical workers and still other focus on farm laborers or another niche.

Marketing consultant Don McCrea suggests four factors that can help identify your niche. Look for potential customers who:

• Already know they have a need or want
• Think that need is serious enough to make them ready to take action
• Recognize that you have the solution to their need
• Are willing and able to pay you to satisfy their need

Carpet cleaner Myers, for example, doesn’t have to persuade clients that their carpets have suffered water damage after some disaster or accident. He doesn’t have to convince them that they need to take action right away before permanent damage occurs. Because Myers is one of the few firms in his area to concentrate his marketing on water damage repair services, customers recognize him as the expert solution to their problem. And they have little choice but to pay if they want to move back into their homes or offices.

Listen To Customers
After you’ve been in business awhile, your current customers can help identify a lucrative niche. They can also define the target audience from which your business is most likely to find more customers.

Mark Delp created a new business, Fleet Response in Orange, Calif., by listening to customers of his father’s auto repair service. Managers of corporate fleets of cars and trucks were willing to sign contracts for maintenance and service brought to their locations.

Regular conversations with your customers will uncover real motives for their purchases that can help you identify other like-minded customers. Skin-care consultants aren’t merely selling moisturizing creams, they’re selling beauty and self esteem. Some find they sell mostly to women over 40, or to singles or to aging professionals.

Peggy Glenn targeted a niche when she opened Firefighters Bookstore, first as a mail order business from her Huntington Beach, Calif., home and later in a shop near a fire training facility. Initially, Glenn thought she would sell to collectors.

“But I discovered that for the most part, this segment does not spend money on the books I sell,” she says. “They look, they talk, they ask for out-of-print books, and they talk some more, but their wallet stays in their pocket.”

She also learned that she didn’t sell to every firefighter. Her most likely customers are professionals studying for promotion exams or taking specialty training. Her second market is training officers and department chiefs who buy books for their reference libraries.

Exploit Your Skills
NASE Member Dave Tapley in Coppell, Texas, found his niche by doing what he was good at and enjoyed. Tapley is an Elvis impersonator who has drawn other celebrity look-alike entertainers into his Cavalcade of Stars that performs at major corporate meetings and conventions.

“When I started 12 years ago, there weren’t a lot of look-alikes available,” he says.

He exhibits at trade shows for meeting planners and concentrates his direct mail marketing to the event planners at major corporations. He buys mailing lists from Meeting Planners International. His most receptive clients work for high-tech, health-care and insurance companies.

These clients want quality entertainment, so they don’t shop just for low price, Tapley says. “But they don’t want to pay the high prices of [Las] Vegas entertainers either, so we’re a better value.”

Roslavsky of Skyscapes obviously capitalizes on his skill as a photographer. But aerial photography also makes use of his college degree in urban planning. One client is using Skyscapes to fight the government from taking some of his property by imminent domain.

Solve A Problem
Many customers come looking for NASE Member Bob Kelly, owner of Hubcap Masters in Little Rock, Ark.

“You could say my market is everyone who drives a vehicle, but they only think about us when they lose a hubcap,” he says. “They find us in the yellow pages. I’m in four or five different directories.”

Body shops and car dealers also seek out Hubcap Masters, sometimes from the yellow pages, but increasingly by word of mouth. He focuses his marketing efforts on these professional customers, too. He’s also built relationships with salvage yards, an arrangement that benefits them both.

“Before, they had a hundred people looking through their yards and maybe one found want he wanted. I bought their stock, they refer customers to me and I satisfy 95 out of 100,” he explains.

Redefine When Necessary
But mail order maven, Lillian Vernon, discovered that even research and experience aren’t foolproof when developing a niche market.

Vernon started her mail order company at her kitchen table and built it into a $250 million public company. Most of the products in her catalog cost less than $25. However, research of her customer base – mostly middle-class women – uncovered that a big chunk enjoyed high incomes.

Vernon thought she could grow sales by starting a separate catalog that offered luxury furnishings like $1,000 Oriental rugs. That catalog lost $2 million in two years before it was dropped.

Jan Norman is a frequent contributor to SEA and author of What No One Ever Tells You About Starting Your Own Business. Contact her at jannormanbiz@earthlink.net