The Key to Successful Niche Businesses
In my line of work, I am fortunate to work with several niche businesses. And several of these niche businesses have very cool products. That’s the appeal of a niche – it’s unique, different, and generally there are only a few quality providers. So I wondered, what is the key to successful niche businesses? Is it the product or the marketing?
Niche Businesses Defined
A niche business generally operates in the low volume, high margin realm. This is achieved because the product supply is low, as is the demand for a unique product or service. Once the product becomes mainstream, more competition enters the market and the business model shifts away from what I consider a traditional niche based business.
My clients range from under $1 million in revenue to over $90 million in revenue annually. I don’t see too many businesses that I would call truly niche earning over $20-$30 million in revenue.
What Drives Niche Business Success – the Product or the Marketing?
Consider some of these niche businesses:
- Tree Houses
- Residential Putting Greens
- Antique Hardwood Flooring
- Gorgeous, Furniture Quality Plantation Shutters
What Golfer Doesn’t Want This?
Depending on what appeals to you, these are very cool products. I mean, who doesn’t like tree houses? If you like golf, you’ve probably dreamed about having a putting green in your yard. And the plantation shutters and the antique flooring appeal to those who like the finest things in their home – you should see these things – they are beautiful. The products have great appeal – the companies are successful through niche business marketing.
Niche Business Products
In their own right, each of these niche businesses is quite successful – even during this economic downturn. And the product appeal and quality cannot be disputed. So does a great niche product or service make a successful business?
It certainly helps – especially if the product can be established as the niche market leader. A great product is a wonderful thing – but it’s not the only thing.
Niche Business Marketing
There is no denying a great, high quality product and a customer-centric focus does wonders for a niche business. But the most successful niche businesses I have worked with approach their business as sophisticated marketers and business owners. Meaning they do not personalize business matters and have a systematic approach to maintaining, improving and growing their niche business.
Great products help close the sale – but to get to that point, niche businesses need effective marketing. And there is no medium out there that better supports niche business growth than the internet and search engines. Go into your town and look for the custom, residential putting green installation store. I’m guessing you don’t have one.
Of course, you (and everyone else) would likely have started with Google or another search engine if you were seriously considering a backyard putting green. That’s why the most successful niche businesses:
- Have great products
- Run their business like a business – not a hobby
- Invest in internet marketing
Niche Business Success – Great Product or Great Marketing?
It starts with marketing. I’ve seen far less exciting products fare extremely well when backed by hard work, discipline and an effective marketing process.
But if you have a remarkable product and great marketing, that’s the key to successful niche business ownership.
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