Those of you that are freelancers, or owners of web design, SEO, marketing companies and the like, have probably heard conflicting advice about whether you should focus on a single niche or multiple niches.
I have no agenda here. I have no skin in the game whether you believe you should focus on one niche or multiple niches. It makes no difference to me, aside from the slight annoyance every time this debate comes up.
The only thing I want to do here, is clear the air because no matter which side of the argument you stand on, there’s misconceptions attached.
In this post you will learn:
- The benefits of focusing on one niche
- The benefits of targeting multiple niches
- Which position gives you the better chance at sales
- Pros and Cons of both positions
- How to better position your company for success!
So lets get to it.
Defining Your Goals
To determine what is right for you and more beneficial for you, you first need to define your goals.
There is absolutely no sense in arguing which strategy is better until you first understand what your goals are and what you want your business to be.
Focusing on a single niche is very limiting, and not really a smart business move if all you want to do is work with local businesses. That’s also without mentioning the fact you would be competing with yourself for any SEO or marketing work you’re doing for the businesses in a niche you’re focusing on.
So… before going any further, we have to decide what is it you want to do? Do you want to work with businesses locally? Do you want to work with businesses across the country?
Like I discuss in my Ultimate Blueprint To Start a Web Agency, there’s two common approaches that seem to work well. You either work locally, with multiple business types or you work nationally, focusing on a niche… or you can work nationally, focusing on multiple niches while keeping your marketing campaigns more niche focused.
So to summarize you have 4 options in how you move forward:
- Work with local businesses, no niche focus
- Work with local businesses, in a specific niche
- Work nationally, with no niche focus
- Work nationally in a specific niche
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Breaking Down The 4 Options
1.) Working With Local Business With No Niche Focus
This is the option I see a lot of people sticking to. I personally am not a fan but it does have a position of strength.
I’m sure many of you that are cold calling to generate leads, have already heard from businesses owners rejecting you, saying that they would “rather deal with someone local”, or “I spend my money on local businesses”.
Working with local businesses gives you an advantage since you’re there, you’re local. You can go into their office, give a presentation, they can drive to your office, meet you at starbucks or wherever to discuss the project.
It’s especially great for those of you with strong face to face or in person sales skills.
The downfall is pretty similar to the strength. You’re local. That will typically come with a lot of wasted time in meetings, or “come to my office and show me how this works” and things along those lines.
If you’re a timid person, you will get abused. You must set boundaries and expectations if you want to work exclusively with local businesses.
Another downfall is that your only specialization is within the location, but not a specific industry. The businesses you likely want to work with most, are businesses that are aggressive in their marketing and want to be the #1 business in their field. Many times, the local factor isn’t enough to win the sale, they want proven results within their industry because it is the lower risk and higher reward option.
2.) Working With Local Businesses in a Specific Niche
You have all the advantages that option 1 has, and focusing on a specific niche also eliminates one of the biggest weaknesses, in not making the sale due to lack of specialization.
That additional advantage, creates an extreme disadvantage as well, by limiting the amount of opportunity in your local area.
Perhaps you are in a large metropolitan area, and it’s feasible that you can target metro cities, suburbs, etc. and have the potential for 50 or so clients. You’re still very limited in growing your business.
While this may work for less competitive (in nature) services, like maybe web design, you won’t be able to successfully offer SEO or marketing services due to a conflict of interest. This is a major problem and also why I don’t consider this a viable option for anybody that’s serious about making a living.
3.) Working Nationally in a Specific Niche
You lose the location advantage but for the businesses you really want to work with, you have the advantage of being specialized.
You have a portfolio, or existing clientele that proves you can get results and have successfully done so across the country for businesses like theirs.
Many business owners have friends in the same field, across the United States which can help you beef up your referral based sales, and sometimes your leads will also recognize some of the businesses in your portfolio. Instant trust builder right there!
Even if you don’t have an existing client base, or portfolio, it isn’t hard to get started when you focus on a niche. You can simply talk to business owners in the niche you want to target. Explain that you used to freelance for other agencies and now you’re starting your own, but focused on their specific industry. Say it was the industry you were most familiar with when freelancing… in order to build your portfolio, you’re cutting your prices in half to build references.
Pretty easy.
Now the trick to this option, is to understand that you can’t go too broad in niche, but you also can’t be too specific. You want a somewhat high ceiling for what your potential can be, otherwise the niche would be a waste of time.
A friend of mine had a company selling websites to people in the “pet industry”… this may have been a little too broad, but it worked well for him, selling websites to veterinarians, pet shops, groomers, rescue organizations, etc. He was doing about 650-800k/year in sales.
If you’re going to focus on a specific niche, you probably want to be more specific than that. While he did generate a large amount in sales, it wasn’t without a large sales team and large marketing budget.
A simple rule to help guide you:
The less money you have, the tighter the niche should be… while the more money you have, the broader the niche can be.
You also have to keep in mind that once your business is doing very well in that specific niche and you don’t have much more room for growth due to limitations in the market, you can just as easily start another business under the same brand name to focus on a new niche.
4.) Working Nationally With No Niche Focus
This is the option that gives you the broadest possible range of clients. There really is no limitation in what you can do or how big you can grow your business.
While you don’t benefit from the advantages of a local focus, or a niche specific focus, you do benefit from the larger image you create for your company.
Sure… business owners can say, well I want to work with someone local. You can fire back, saying, ” I understand that but keep in mind, local web designers or local SEO companies typically deal with local businesses. I deal with businesses across the country, I know what works and what doesn’t work and I’ve been able to repeat #1 rankings for different keywords, different businesses and different cities across the ENTIRE country”.
This is the route that I chose when I started. Was it right? Maybe… maybe not.
However, I learned a lot of things along the way and there were always certain industries that would end up calling in wanting to buy, more than others. There were certain industries I decided to focus on with my “quadruple threat” marketing method, which by the way, was niche focused.
If you do decide to be more general on a national scale you have to be prepared to focus on specific niches in your marketing.
Certain times of the year I would have my sales people calling roofers, then landscapers, then concrete contractors, etc. If I had a sales person that had experience in a certain industry previously, like if they were a roofer or worked with a roofing company, they would call roofing companies exclusively.
Direct mail pieces would be created and customized for specific niches.
My email marketing, and the method I teach in “Ice Cold Email Gold” talks about segmenting your cold email list based on the niche.
If you go after a national clientele, without focusing on a specific niche, you need to at least make your marketing efforts niche focused.
So Which Option is The Best?
I’ve laid out some details, pros and cons of each option.
It’s impossible for me or anyone else to tell you which one is the best. Like I said before, you have to define your goals. Actually, you need to define yourself and your company.
What’s best for you, may not be best for someone else.
We can pretty much eliminate #2, doing business locally within a certain niche is likely to be a very bad idea when you consider possible scale and growth, or lack thereof.
I personally would eliminate #1, as being the local guy in my opinion is too limiting and not very fun.
Best doesn’t equate to highest gross revenue. The best option, is one that you identified with what you want to accomplish. It’s an individual decision, not a decision that can be determined by any collective.
Which one do you think is the best? What are some other advantages and disadvantages that aren’t listed here? Did you choose one option and later regret it? Let me know!
I always been in camp 4. Looks like option 3 may be the best though.
Something to think about but would this be as relevant to me as it would for someone in Web design?
Definitely relevant for web design, and could be for SEO too. Think about it like this, when building citations for a company you end up discovering a few niche directories that you probably wouldn’t have known about without being heavily involved in the niche. If you know what works for a certain company in a specific industry, chances are you can repeat that success in different locations.
I think 3 would be good (not best imho. best depends on the people doing it), also because of the lead nurturing. It become much much more easier to nurture a lead when you are already in the field/niche he is in.
You could literally almost copy and paste the informations/analysis that you provide them for free (as first approach) in order to gain them as a client later on.
I think it’s clear 3 is the way to go. But you mentioned focusing local and within a niche would be bad. What about lawyers? They always are local and specialized.
Interesting point James! Thanks for the comment. I was referring more to marketers, but you’re definitely right. I guess that’s a difference in b2b vs. b2c though.
I agree too. I think there could be enough space to target many kind of different lawyers, in big cities. (because of the different kinds of lawyers).
I’m not talking about that but that’s a good point. I was talking more about lawyers being local and having a niche with their area of practice
I guess you’re right about the b2b vs b2c. Different ball game
I was just reading a couple other people’s take on this recently and their advice was to start out by casting a wide net, but to eventually focus on one niche. This leaves things wide open in the beginning so a company can start bringing in a steady income, but over time, niching down would actually eliminate competition. That’s because they’d be specializing in that one thing and separating their company from most other SEO companies. Example, “SEO For Plumbers” or “SEO For Dentists” vs “New York SEO Company”, “SEO Company Dallas”, etc.
It made sense, though I’m not sure how big I really want to become anyway. A steady $10-$20k per month would make me comfortable and keep the “stress monster” away.
That being said, I’m all about nationwide and most any niche will do, but I’d try to avoid seasonal niches.
Thanks for the comment Joe! I would think that focusing on a specific niche would be better for getting to the 10-20k/mo goal instead of being more generalized. I’m not sure though, I went the general route and did just fine but I think I would have had faster growth and more stability if I niched up (or down lol).
I agree. I think the guy who posted in the other article before (Ken James) just started since a few months (I guess, I’m not sure) but he is already doing 25k/mo.
He is using the strategy you are talking about…niching down and aiming only big fishes.
I’m also thinking about niching down too.
Thank you for the awesome post Nathan :). As always, pure pure gold!
It’s interesting to see all the kind of niching strategies being completely listed with their pro and cons, up here.
I will probably focus a little bit more on the 3rd strategy, in the next months.
Thank you.
Solid post but i dont need cause im about to win the powerball
LOL, good luck… send some of that my way before you blow it all on the poker tables!
Or on taxes. I recently read an article somewhere that broke down how much of those $900+ million would actually end up in the pockets of the winner. Surprising answer? Around $250 million, the rest would be paid in taxes and this 30 year annuity thing (not sure what that is). There is a tax on lottery winnings afaik and winning it will also catapult you into the highest tax bracket immediately. Quite scary.
Or rather not scary if you know what you’re doing with the money and investing it wisely, instead of blowing it on poker tables 😉 With the above in mind, that seeming paradox of lottery winners becoming poorer after a couple years than they were before the win doesn’t surprise too much anymore.
Alex, are you saying you wouldn’t want to win the lottery?
My plan is to target three different unrelated niches on a national level, not local. Would you recommend using one brand/website with a niche marketing focus for each one? Or a separate brand/website for each niche?
Not a bad idea Fred. I guess whether you should use one brand/website or multiple, depends on how you plan to acquire clients. What is your marketing and sales strategy? What methods will be using? The answers will determine which route would be ideal.
I’ll be using the “quadruple threat” and Ice Cold Email Gold for sure.
Fred, if that is the case you can use one website, but use 3 different domain names that forward to a landing page on your main site. That would probably give you the best conversions!
Thanks for your input. So, don’t build out any niche-focused content on the different domain names, only on the one website under the primary brand?
The easy answer is to test it out and see what works best for you. If you have enough time, I would think individual domain names could perform better.. but as far as organization, structure, and making your other marketing efforts easier, I would put it on the same domain and niche up your marketing. If you’re doing the Ice Cold Email Gold method, you’ll be using secondary domains anyway to 301 to your main (target) domain.
I can just say what I would do… which would be having it on one domain. You can STILL have niche focused content, and direct certain niches to certain niche landing pages. Is that the best way? Maybe, but it’s only a theory until there’s data that gives us a clear winner!
Thanks for the help and feedback.
No problem Fred! Be sure to come back and let us know how everything goes!
My bread and butter has been #1 for a great number of years. My philosophy behind this approach stems back to my first real web business, a Las Vegas Hotels Site. The biggest hurdle then was content… more importantly Original Content. Providing images and information that no one else offered. I lived in Las Vegas, I would set an appointment,and gather what content I needed. It was pretty simple and straight forward.
Fast forward a number of years and I was then creating websites for business’. Anyone that has done this has felt the lack of control when you are waiting for the client to provide content. You as a developer are no longer in control of the work flow, it is dependent apon the client. THIS SUCKS!
If your client is local and you need images, you go get them. If you need content and the client is dodging your calls.. you walk into their business and see them. You are the captain of the ship, and the project is not high jacked by the whim of the client.
Makes me sound like a control freak! haha
You have done a little bit of everything though haven’t you Paul? Probably every option there is, you’ve done it. LOL.
I feel you on the waiting and lack of control. That’s why I adjusted after a few years and developed content for the businesses, and had them approve it or make edits based on what I did. Much easier workflow, bit more work but it was worth it for me. I actually talked about it in the new blog post: 5 Mistakes Beginners Make When Starting Their Agency
Yes and no. I do target nationally / internationally not so much by niche, but for the sake of discussion we can say I do. What happens tho is I do focus tighter and tighter down to a local level. CRO as an example I started Internationally, I am now focused primarily on 3 geographic hotspots, that are in general local by nature.
The reason for the geographical tightening is by intent, to increase my ability for referral. The ability to obtain a “local” referral ( local in reference to the referrer ) is far greater than getting a referral in say California from a client in Australia.
Even if my targets / referrals are 6000 miles away, I start developing a local concentration of business based on the ability to get local to my current client referrals. – I hope that makes sense.