Niching in Business: Definition and How It Can Help You

Pursuing a niche market is considered by some a mistake, while others are convinced that focusing on a specific segment makes it easier for their product or service. Who is right, and what exactly does niching mean?

At SPP, we’ve seen first-hand that niching can help companies grow, especially if it’s a new business. Let’s take a closer look at the meaning of niching and how it can solve modern challenges you are likely face in the business world.

Niching definition & origin

The origin of niching can be traced back to the Latin word nidus, which means to nest. When referred to business activity, however, to focus on a niche usually refers to focusing your activities on a narrowed down market. For instance, a content writer could niche down, and tailor their services exclusively to lawyers.

Niching in business & and its advantages

According to a study by YouGov Galaxy, the biggest challenges small businesses face are financing and marketing. Entrepreneurs running those companies need to wear many hats, often struggling to make ends meet. If they have to suffer through tasks they don’t really enjoy, that affects their bottom line.

Niching can have a positive effect on brands if they manage to focus on a target market, and highlight their expertise. While not an easy task, it’s certainly achievable. I’ve written about writing niche content that is both engaging and positions you as an expert in your field.

On top of that, there are multiple advantages niching brings to the table.

Reduced competition

If you’re looking to enter a market with that is being dominated by established competitors, you won’t have it easy being the new kid on the block—unless you can set yourself apart. Studies have shown that every second small businesses doesn’t survive after five years (SBA, 2018). While cash flow is indicated as one of the main reasons many small companies close their doors, economic expert Michael Porter in his competitive advantage theory suggests that choosing a less competitive market increases your chances for success.

With that said, the nature of competition has changed over the years. Clients running on SPP have demonstrated, that you can strive even in a fierce market. For instance, Rom from Podblade mentioned in our case study that they’ve shifted to a blue ocean strategy. Instead of competing with other podcast editing companies, they now focus on businesses that would benefit from reselling Podblade’s services.

This demonstrates that, even in competitive markets, there are opportunities if you focus on a specific niche. You do have to rethink the way you do business, and use the nature of a competitive market to your advantage.

Clearer business model

Niching brings another great benefit for any digital agency looking to build a business that strives for years to come: you’ll be able to define a clear business model and highlight your area of expertise. Instead of being the one-stop shop for everything marketing related, position yourself as an expert in a specific sub category, for instance Quora content marketing.

Focusing on this specific niche, you’ll know exactly who your target customer is, you’ll be able to find and communicate with them more easily. It will also be easier to build up your brand as an industry leader.

Clearer branding and marketing

To simply find your niche is not enough in a world that is being dominated by those with years of experience. You need to know how to position yourself, and advertise your services. Let’s stay with the Quora content marketer example: simply saying you are an excellent marketer on Quora doesn’t proof your point. Show, don’t tell, as they say.

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Build your reputation on Quora, answer questions, and become a leader in a specific niche that you want to serve. You’ll be able to use your profile as proof that you’re really an expert.


Improved customer targeting

As a marketing expert for Quora, imagine how easy it is to target every business owner interested in that specific service. Start being researching related keywords, and build a cluster of topical content.

Tip: If you’re struggling with this task, check out my post on how to do SEO for niche markets.

The benefit of ranking at the top of Google’s search results page is that you’ll get highly targeted inbound traffic that you can nurture, either through forms designed for lead gen, or free courses that include a paid upsell.

Combine your targeting efforts with paid ads to get short-term results. After all, SEO takes time.

Easier network buildup

A big benefit of becoming a niche expert is that your customers, or those that simply became aware of you, might recommend you in Facebook groups, on Twitter, or via email. This network effect snowballs into free leads, without you having to lift a finger. Of course, you can ask clients to refer you to friends and acquaintances, and even reward them for it (via an affiliate program).

Convert your clients into brand ambassadors with our affiliates feature

Don’t just rely on passive networking; become actively involved in communities to build up your reach, and further strengthen your expertise.

Better business focus

Niching helps entrepreneurs expand their activities because they only need to focus on their main products and services. A general business often struggles to determine which services deserve more attention than others, or it takes a long time to come to a conclusion.

When you only have one niche to focus on, you simply need to experiment with different ways of publicity.

Niching in marketing

The aforementioned benefits of focusing on a niche bring many opportunities when it comes to making your ideal customer aware of your services or product. If you’ve clearly defined who your ideal client is, you can now begin promoting to this well-defined audience.

Here are a few benefits that you should enjoy:

  • Lower ad spend: you don’t need to spend your money on customers that might not be interested in your products or services. And modern tools such as Google and Facebook Ads are very thorough when it comes to their targeting options.

  • Lower competition: Fewer competitors make your life easier, as you don’t have to pay exorbitant amounts of money to reach your preferred customer.

  • Higher loyalty: Niching allows you to engage in almost intimate ways with your clients. You’ll have enough time to personalize a lot of your services to fit their needs. To them, this will be a sign that you’re a great service provider.

With the benefits out of the way, the actual strategies you can use depend on a variety of things, such as the places where your customers are active (Facebook groups, email newsletters, etc.), your budget, and if you prefer short-term or long-term results.

Ideally, you’ll combine different tactics so that you’re covered in all scenarios. Invest time and energy in SEO, which will pay off six or so months from now, but also think about sponsoring a newsletter for short-term profits.

Avatar of Deian Isac
Head of Agency Success
Having worked as a content writer for 8+ years, Deian has partnered up with a lot of different agencies for content production. He understands their processes and now helps agencies scale up their operations with SPP. Besides his success activities, he also manages the content strategy of Service Provider Pro, writes captivating blog posts himself, and produces case studies.

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