“Focus on a really small market” doesn’t seem like the world’s best business advice; surely the more people you can sell to the better? But surprisingly, it’s a hugely beneficial strategy – and one that can help bring you legions of loyal, loving customers.

There’s a good chance you’ve never heard of Fat Yoga. It’s a yoga studio in Portland, Oregon – but unless you’re into yoga and you live in Portland, there’s just no reason for you to be aware of it. Oh yes, and it’s for fat people. So ideally you’d need to be that, too.

But imagine you do fit the criteria. And then imagine coming across Fat Yoga’s website, and reading this: “The size of our thighs, arms, bellies, and butts all change the way we are capable of expressing the traditional asanas (poses). Fat Yoga honours and embraces our differences and strives to create an environment where all bodies can do all poses… We focus on strength building, flexibility, balance, self-acceptance and peace of mind.”

Now that’s more likely to appeal to you, right – a yoga class, in your area, for people who don’t fit the traditional “yoga body” mould? If you had to choose between taking a class there and taking a class at OmBase down the street (great name, though), you’re going to go with Fat Yoga. What’s more, you’re going to LOVE what Fat Yoga stands for, and you’ll be delighted and excited to take your first class.

This is one of the benefits that come with niching down, but too many businesses go in the opposite direction: they try to appeal to absolutely everyone instead. It makes sense at first. After all, the larger your potential market, the more sales you’ll potentially make. Why restrict yourself to overweight people who like yoga, when instead you could market yourself to anyone who likes yoga?

The reason is simple: when you try to appeal to everyone, you end up resonating with no one. When you try to cover all bases, no potential customer will feel like you understand, appreciate and can serve their specific needs. Yet when you spend some time thinking about who you’re for (and conveying that on your website and marketing copy), you’ll become immensely appealing to that particular market. And THEN… wonderful things start to happen. It may be counterintuitive, but:

When you niche down, everything becomes easier

Have you ever been to a website that states “Whether you’re a large, small or medium-sized business…”? That kind of messaging implies they don’t really know who they’re for. Unless they’re a huge company with thousands of customers and large internal teams dedicated to each size of business, how can they be expected to understand and offer relevant, appropriate advice to a small business owner AND the CEO of a multinational corporation? Such companies clearly haven’t thought about the benefits of speaking directly to a particular audience and addressing their specific needs.

Let’s imagine you own a small creative business in need of an accountant. You’ve just started out, and all you want to do is make sure you’re abiding by all the laws, filling in all the documents correctly, and not paying more tax than necessary.

You come across plenty of “Initials Surname Accountancy” firms on your search online, all of which promise to help you with “all your tax needs”. Then you take a look at The Wow Company, which offers “a genuinely proactive service to small businesses across the UK.” They structure their services as a pizza order, so you can pick and choose the services that you want, in a format that’s easy to understand and fun to use. And their motto is: “Make more profit. Pay less tax. Have more fun.” You’re (surely?) going to go with The Wow Company – and you’re going to be excited about doing so.

“If you don’t know who your customer is, you literally don’t know what the word “quality” means, if quality is defined in the eyes of the customer.” – Eric Ries, author

When businesses niche down, they no longer need to compete on price, either. A generic web design agency just starting out may have to resort to offering bargain basement rates because it has nothing else to offer anyone. But a web design agency for (e.g.) life coaches can charge whatever they like, because they’re no longer constrained by market norms. They specialise in a particular segment of the industry, so it makes sense that they’re experts and get better results for their clients.

This is what Philip and Mirjam did over at Metamonks: the messaging throughout their website caters to their dream client, and they make sure they show how much they know about the coaching industry. Compare that to the aforementioned generic web design agency, where customers choose them because they’re cheap. Those customers aren’t going to value the work that the agency provides, and they probably won’t be all that fun to work with, either. In the words of the almighty marketing expert, Seth Godin: “… the problem with the race to the bottom is that you might win.”

Niched-down companies succeed at marketing, too. A generic therapist – someone who treats bereaved parents, troubled youngsters, verge-of-divorce couples and everything in between – will need to take a blanket approach to advertising, and their SEO keywords are likely to be all over the place.

Now consider the concept of a “therapist for business owners”. He can take a far more direct approach to marketing himself: his advertising and marketing can use words and phrases that appeal directly to entrepreneurs and their specific needs: “productivity”, “profits”, “motivation”, “expectations”, “performance”. He can go to the online forums and the offline events where they’re likely to hang out. And he can write guest blog posts on highly relevant websites about subjects that matter to his potential clients. Such a therapist already exists; he’s called Peter Shallard, the self-proclaimed “Shrink for Entrepreneurs”, and from what I can tell – he’s doing pretty well.

Another marketing benefit is the fact that customers who feel appreciated and understood will often promote a company’s services or products for them. Swedish bank Handelsbanken is a great example of this. It purposefully appeals to a certain type of person: those who are financially prudent, in control of their money, and interested in a long-term banking relationship. If you just want an overdraft facility or the opportunity to make the most of a “new customer” incentive, you’re not the right customer for Handelsbanken – and you won’t find their messaging enticing. Those who are the right type however, become customers, and then proceed to recommend the bank to their similarly prudent friends. By being deliberately exclusive, Handelsbanken has enjoyed rapid (200 UK branches in 3 years), despite spending next to nothing on marketing.

Saying is different from doing

It’s one thing for a business to say it’s focused on a particular niche, but it’ll get busted pretty darn quickly if it can’t actually serve that niche with the level of focus and specialisation its customers expect. The reason you’d choose “dog grooming for poodles” over “dog grooming for any kind of dog” is because you’d expect them to have particular expertise when it comes to poodle fur: they’ll have poodle-specific tools, shampoos and styles, and they’ll know how to handle and care for your dog while it’s being prettied up. If you turn up at the “dog grooming for poodles” parlour and there’s no evidence of specialist knowledge, you’re going to be somewhat peeved.

That’s why it’s so important to a) be knowledgeable about your niche, and b) prove that knowledge – in both your marketing, and in the delivery of your product/service.

A company that does a fabulous job of both these things is JoeArchitect – an architectural and interior design firm specialising solely in dental office design.

Take their “process” page: every single step focuses on the individual needs and requirements of a dental practice. This isn’t just some vague outline of a framework that could apply to any kind of building – it’s clearly about dental practices only.

Can “niching down” be retrofitted?

If you like what “niching down” has to offer but already have a business up and running, all is not lost! Firstly, note that you can niche down in two ways: by your target market and/or by your offering. This gives you more options – therefore giving you more freedom and flexibility when it comes to niching. For example, a private doctor could decide to serve only women under the age of 35 (target market), and/or to only provide fertility treatment (offering). A small law firm could decide to assist only children (target market), and/or to deal just with family law cases as opposed to everything under the sun (offering).

If you run a large, bureaucracy-heavy company that’s unlikely to appreciate any kind of overhaul, there’s another way to niche down: through having a strong, confident personality that makes your dream customers feel ecstatic to have found you. Take Print Hut, for example – a company that provides standard printing services. Rather than try to appeal to a subset of a large market, they’ve decided to niche down by appealing to a particular type of person: someone who likes their services to be a bit zany. The bright colours of the site combined with fun, humorous writing may not interest your average CEO of a Fortune 500, but it’ll be loved by the target audience.

Or look at Dollar Shave Club, which oozes personality from every crevice of its website.

Even its “gift card” page contains a pre-written note for folk to send: “I got you a membership in Dollar Shave Club. Yes, it’s the greatest gift, probably of all time. Your smiling, smoothly shaved face is all the thanks I need.” Not everyone’s going to love this messaging, but it’ll no doubt appeal to Dollar Shave Club’s target audience.

Find your market and make them love you

If you’re thinking of launching a new business, or you’re struggling to find the right customers in your existing one, start here: focus on a tight niche.

Learn everything you can about that niche (whether it’s the target market or the service you’re offering). Then start SHOWING how much you understand and acknowledge your customers’ needs – through your website text, flyer copy, forum posts, podcasts, or any other way you plan to market to them.

The following questions should help you start thinking more about niching down:

  • Which service/product are you best known for?
  • Who is your dream customer? Describe them in detail
  • Would you be able to focus on serving just this dream customer?
  • Why would your dream customer choose you over anyone else?

Niching down can feel like an illogical business move – and that’s why so few businesses do it. Actually, though, it’s a ridiculously undervalued opportunity: knowing who you’re for will help strengthen who you are. So be bold, be brave, and make the most of it.