Are you someone who is thinking about starting a business? Firstly, it’s important to think about what kind of business you want to create. This impacts your life and how much work you’ll need to put into it. So, it’s helpful to consider whether you’d rather create something that is niche or specialized. If this sounds like something that could help you, keep reading to find out the advantages of having a niche or specialized business.
What is a Specialized Market?
A niche market is when you find an unexplored segment of a larger market. Maybe this segment already has its customers, but only a few brands are exploring its potential yet.
A niche or specialized businesses can actually have unique advantages:
- You can build your brand into something special by focusing on delivering value and service to your customers. Therefore, you can create a brand that people love and feel connected to.
- You can attract loyal customers who are willing to pay more for your products or services.
Now, let’s take a look at some of the unique advantages specialized businesses have. There are many advantages to starting a niche or specialized business, but here are five of the most compelling.
1. One of a Kind
A niche business has less competition in its market area – sometimes no competition at all. When you can identify a market need before anyone else, your business can stand out to the point of representing or being associated with that area. For example, Airbnb was born as a home share service that expanded and became the main servicer in that area.
But of course, identifying a niche requires a lot of research and data analysis. Sometimes there is no company offering products or services in a particular segment simply because it’s a very small market with less demand, therefore less profitable.
2. Reduced Costs
A niche business takes less spend and cost to run than a larger, more wide-reaching business. To serve a certain segment, having a little bit of everything is not necessary to please everyone. Even the spending on advertising is smaller and more cost-effective as your marketing will be more targeted to a specific audience and won’t require massive campaigns.
3. Stronger Customer Bonds
Larger businesses can even reach certain audiences with specific campaigns aimed at a certain groups. But a niche business has a better chance of connecting with customers personally.
Here are some quick ways to grow customer bonds:
- Make advertising campaigns specially designed for your target audience.
- Be transparent about your products and your company’s values.
- Attract potential customers through promotions and sweepstakes, offering giveaway backpacks with samples of your products as a prize.
- Make the relationship more personal by sending messages of gratitude (and even freebies) to customers who have posted positive reviews about your brand.
4. Setting the Standard
Although today there are other platforms for booking a car and driver, the pioneer Uber remains the most remembered name by consumers. This is one of the privileges of a niche business: it can set the standards of that industry.
Considering there’s less competition, any businesses that enter that market segment need to follow those standards – or at least build off them. And when you become an expert in an untapped new field, your competitors will first have to go through all the trouble of learning the specifics of that segment before they become a real threat.
5. Price Point Priority
If no one else is offering the same niche product or service that you are offering, the main advantage is that you can assign the price point to them. After all, by meeting specific needs in an unexplored niche, you reach customers who don’t mind paying more for something they know they won’t find elsewhere.
A good example of this is the pet food market. There are several brands on the shelves of supermarkets and pet shops. Still, only a few of them invest in premium products, prepared with natural, higher-quality ingredients (even vegan options). This allows charging a fair price for the differentiated, limited, and more valuable product for a specific target market.
Stick to a Niche
Maybe you find all this too much work and prefer to continue with a more generic approach – that is, aimed at as many consumers as possible, but this kind of business will face more and more difficulties soon, mainly because of competition from big department stores.
Finding a suitable niche for your business can completely transform how consumers look at your brand, even identifying a new (and growing) target audience you didn’t even know existed. So you can offer unique and differentiated products and services to loyal customers that your competitors are not yet supplying.
Wait no more and research the market and the needs of your target audience. Use the advantages of a niche or specialized business and don’t forget to tap into your creativity to approach your business in an innovative way.
Additional Articles You May Be Interested In:
- Top 7 Instagram Niches To Help You Start An Account for Your Business
- How To Avoid Conflict With Other Influencers In Your Niche
- 4 Rare Influencer Niches And How To Promote Yours
- How To Find Your Niche In Blogging
Katie Ault is a blogging intern at LadyBossBlogger. She has graduated from Bridgewater State University with a BFA in English Literature and a minor in Sociology.