How Managed IT Startups Find a Profitable Niche
January 6, 2020
April 13, 2017
June 30, 2021
June 30, 2021
You and your startup have a lot to offer when it comes to providing small businesses with today’s best IT solutions. But the more you look around, you find that so do others. So you pause and question how to invest time and resources in a consulting endeavor steeped in competition. What may be needed at this point in time is finding a niche in the market that differentiates and distinguishes your business enough to stand out in the competitive pool you’re swimming in.
Seek a Niche, Not a Job
The methodology for finding a niche differs from job hunting. Most career advisors in the job market will advise you to cast a wide net to give you more time at bat. However, when selling your company’s services, you actually need to do the reverse. Narrow your skill set to something that is more specialized. This approach may sound risky, but if you select the right niche, a consultancy business that’s specialized normally incurs less competition. This in turn allows you to charge more than a firm that offers generalized services.
Attract Niche Customers
In addition to less competition and the ability to charge more for specialized services, a niche business attracts niche customers. Since your customers have specific business requirements, they’re going to feel more comfortable working with an IT partner that’s earned a track record in that field.
Business clients will seek you out if you’ve produced case studies that prove your expertise and specific skill set.
Relevant experience translates into a more tailored and surgical approach that can save business clients significant resources. Niches provide your customers with the ability to overcome ‘barriers to entry’ with certain technology. For instance, not everyone is knowledgeable about the latest cloud computing products, but if your niche is specializing in the cloud services space, you can offer value-add services to business clients in that transition.
As companies search for specialized services, you can build content and marketing presence to get yourself found in search results, social platforms, and Q&A websites.
With less competition in specialized keywords, an IT niche makes it easier to get noticed as an expert, enabling you to gain more out of your marketing efforts.
Find Your Best Niche
First brainstorm your assets and your specialized marketing skills. Ask yourself what you are best at and what you like doing the most. If you’re going to build a lasting business, better to invest yourself in something you are going to enjoy over the long haul.
Then once you’ve bullet-pointed all the skills that can distinguish your niche, determine which ones have the greatest demand. Here, you might want have your team confer and come to a consensus. Or in addition to that guidance, you might also want to seek the advice of others who’ve been successful in their own niche businesses.
In that mix, you can also research and determine which niche pays the most, as that might skew your decision in one direction or another. Here you are weighing interests versus the monetary gain factors.
Research the Market
While marketing consulting firms will charge you thousands of dollars to assist in assessing various markets, there are a few ways to conduct this type of investigation yourself.
With online keyword searches, you can obtain accurate and current data to target your markets quickly, at little to no cost.
When consultant Greg Miliates started his own independent consulting firm, he worked for 8 years at a software company doing work that’s now similar to his niche consulting business.
In describing the advantages of keyword searches, he notes:
At its most basic, keyword research is simply looking at how many people searched online for a particular word or phrase. Along with the search volume stats, you can also see how many websites are competing to be found for the keywords, how much they’re paying for Google ads for the keywords, etc. This is powerful information that can tell you a lot about a market.
Google’s ‘external keyword tool’ is a free tool that allows you to uncover both local and global search volumes for certain keywords, as well as the competitiveness of those keywords.
Personal brand entrepreneur Chris Ducker points out:
You’re basically going to want to find keywords that pull in an absolute minimum of 1,000 global searches a month (some people chose this number to be affiliated with local searches, however – its a global economy, right?), but preferably, twice that amount.
Before deploying a full-blown website, you can test your niche premise inexpensively with a landing page. On this page, design a selling proposition as a pre-sale for one or more of your services. You can then drive online traffic to this page via your social networks, starting with LinkedIn, which is more business-oriented than the others.
You can also run a relatively low-cost advertising campaign to test the interest factor in your niche. If you sense a minimal response, it may not be whether or not your specialized service is viable, it may be that your messaging isn’t hitting the mark. In those instances, by leveraging A/B split testing, you can reap better conversion levels, while determining if anything is preventing your target market from taking action.
Baby boomers are nearing retirement age. These are the folks who are seasoned and have an extensive resume of life experiences beyond their work tenure. Serial entrepreneurs and the working retired can often relate to a wide swath of clients and address the needs and preferences of a clientele in multiple demographics.
Millennial consultants, on the other can understand the idiosyncrasies of their demographic. IT consultancies with older founders need this group to help them relate to this target demographic. The X-generation demographic that lies between Boomers and the Millennials can help bridge the communication gap between these three generations of workers.
Follow the Rule of 7
Often a challenge with niche businesses, is ‘staying on point.’ Too often in our eagerness to turn every seed into a fruitful plant, we spread ourselves too thin — and unfortunately end up defeating our original purpose.
So instead of shying away from repeating oneself — get in the habit of doing just that.
To market any product or service successfully, it takes at least ‘seven touches’ for your message to register with a potential client.
This old marketing adage appropriately called the “Rule of 7” is as effective today as it was during the Mad Men days of the 50’s and 60’s. Basically, it refers to when a prospect needs to see or hear your marketing message at least seven times before they take action and consider purchasing from you.
Seven touches allows you to break through the noise of a multitude of messaging that’s also trying to capture your client’s attention. It allows you to keep working your warm prospects who might need your niche in the future, but aren’t quite there yet. And above all else, seven touches gets you and your clients the needed time to learn to like and trust each other. In a new startup, it’s most important to earn that respect over time.