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Niche Hunt

Investigate these 6 marketing niches, and unlock the door to a prosperous future.
April 1, 1997
URL: http://www.entrepreneur.com/article/14084

Never rely on one single niche (or market segment) to make your business prosper. The secret is to tap several niches and know that some pay off sooner than others. If your business is in a slump, focus on the niches that give faster returns; then concentrate on the longer-return niches as your business begins to revive.

The following multiniche marketing plan can work for any business, from a printing company to a small plastics manufacturer. The niches I suggest you concentrate on fall into general categories, but don't overlook the specialty segments of your particular market area, either.

Here are six niches that produce excellent financial returns. The first three produce the fastest returns on your efforts. The last three take longer, so plan your time accordingly.

1. Satisfied past customers. If your business is just coming out of a slump, this is the fastest way to jump-start your sales. Remember, making the sale is only 25 percent of overall sales excellence. The other 75 percent is repeat business. Entrepreneurs who don't market to past customers are forced to reinvent their businesses every year.

I doubled our company's profits by beginning each new year going back to old customers and asking if I could serve them again. I discovered I could turn satisfied past customers into loyal customers--and once they became loyal customers, they became six times more profitable than onetime satisfied customers.

What's the difference between satisfied and loyal customers? Satisfied customers are still willing to listen to what the competition has to say. Loyal customers think you're the best thing out there. They spread so many positive words about you, you can hardly keep up with the business.

When you call on past customers, tell them, "I've got a problem. I need to find more good people like you to offer our product or services to regularly." That alone will get your customers drumming up names for you.

2. Your close centers of influence. You've met this network of people in the course of your daily life; they
really have no connection to the fact that you're a business owner. You go to the health club because you like to stay in shape, not because you own the Nature's Way Cafe and want more business. You go to a certain church or volunteer at the hospital because it has become your way of worship or of helping out in the community.

However, there is nothing wrong with letting these people know what you do. Do not expect business to come your way just because you and a friend both go to the same health club or work together at the school carnival's corn-dog booth. Make it known that you want the chance to prove yourself.

Some people feel they have no right to ask friends and acquaintances to do business with them. One entrepreneur told me, "I'm not the pushy type." There's a difference between being pushy and being passionate. A person who is passionate about his or her profession has no qualms about using the following dialogue:

"You and I go back a long way, and you know me better than a passing stranger. I can take better care of you than any stranger will. I would never take advantage of our friendship by not taking your business seriously. If anything, I will put more pressure on myself to serve you well."

3. Your local business network. Here's a little personalized poetry from my business history. It may apply to you, too.

There once was a young entrepreneur who lived in a shoe.

She had so many children, she didn't know what to do.

She never joined clubs,

Or hung out in pubs,

But formed her own network with pediatricians and preachers,

Little league coaches, gas station attendants and all her kids' teachers.

I never joined professional clubs because I couldn't afford any more time away from my family than prospecting allowed. I'm not saying it's wrong to go to meetings, especially if they're productive for you, but sometimes at networking events there are several insurance agents, several clothing retailers or what have you. I wonder how much business really passes between these people. Most entrepreneurs are looking for leads, not looking to give them away to competitors.

Here's a more personalized approach that doubles profits faster: Form your own "board of advisors" within the community. Eventually, you may want to have quarterly morning breakfast meetings or luncheons with your hand-picked network. Here are some prospective board members: a banker, a doctor, a lawyer, and several small-business owners such as a printer, a dry cleaner, a restaurateur, a clothier, and an espresso shop or bakery owner. The key is that no two are in the same business.

Your specially selected board is effective because there's no one competing against you. My informal board evolved over the years from doing business with the same doctor, dentist, dry cleaner and auto repairperson. When I took the children in for routine checkups, my pediatrician would give me hot leads. Of course, I recommended his services to many of my friends and clients, too.

You may already have several informal boards and not realize it, such as a network of friends from your children's school and sports activities. Don't feel embarrassed about talking to these people about what you do. Many businesses are supported by groups that have become like family to each other.

4. Past acquaintances. Get out your old high school yearbook, holiday card lists and other memorabilia. Start taxing your memory for names of people from your past you can contact. See if your former high-school teacher is still holding down the fort at your neighborhood school.

Try writing a letter such as this to your former basketball coaches, dance teachers, or even old bosses:

"It's been a long time since we've seen each other. You were always someone who brought out the best in me, and I still remember all the kindness you showed me in the summer of '62 (or "in math class when I was struggling," etc.).

"I am now an insurance broker and am looking to expand my business. I decided to write to people who have known me well and worked with me in the past--people like you who know I can be trusted to do a good job." Include a brochure about your business or any other applicable information.

5. Your telephone. Every time you find yourself with a few minutes to spare, dial for dollars. Whenever you think of a name or lead, follow up on it. Research mailing lists, and buy some current ones from a list broker. Here are a few quick telephone tips:

Get right to the point. Allow three minutes to get your message across. Use normal, but bordering on dramatic, language: "This is a shot in the dark, but are you 100 percent satisfied with the people cleaning your office?"

Find a good reason to call a prospect. Maybe it's congratulations about a new baby or promotion. Personalized reasons are highly effective.

Report news they haven't heard, such as "The tax laws change in 30 days" or "Your rates may be going up on your birthday." Consumers are impressed when business owners know something they don't know, but need to know.

Obviously, you need to report correct facts, but make this a habit and impress your prospects in the process.

Use voice mail to save time. It lets you talk directly to the prospect and get your message across as only you can do. For example, "Mr. Stolley, I wanted to stop by this weekend and present that proposal we discussed. Please leave a message on my machine with an appropriate time."

6. Your territory. This takes time to build. It's the geographic area you regularly call on to ask for business. Think of it as if you were a milkman going on your route. Not everybody in the territory has you deliver their milk, but you have some customers in the territory--so while you're delivering, you make a few house calls to improve your odds.

The first stage of building a territory is the "getting to know you" stage; this takes about six months to a year. Then comes the "getting to like you" stage where everyone recognizes your face and may even like you, but they haven't ordered your product yet. It takes between one and two years to reach this stage. Finally, there's the "getting to love you" stage; it takes about two years to reach that level of productivity.

There you have it--six niches. Work them and grow.

Danielle Kennedy presents sales and marketing seminars and keynote addresses worldwide and is the author of seven sales books as well as audio and video sales training programs. Check local bookstores for her latest book, Seven Figure Selling (Berkley Press). Write to her in care of Entrepreneur, 2392 Morse Ave., Irvine, CA 92614.