Getting referrals is one thing; getting the right ones is another matter altogether. The wrong referrals just waste your time following up on situations that will never close. That’s why Targeting is an essential part of your referral sales plan.
Whether you are a small business owner or a salesperson employed by a company, niche marketing will help you substantially increase your income and put the fun back into selling.
Targeting niche markets is the final cornerstone in building a referral business.
Let’s start out with a definition. To me, targeting niche markets means positioning yourself as an expert in a specific industry as it relates to your product or service and leveraging that expertise and reputation with appropriate marketing techniques, so that people in the target industry will think of you first and call you. You may already be targeting some industries or may have thought about targeting, yet you didn’t really know how to make it work efficiently. Harvey Mackay calls it “niche picking.”
What’s the difference between marketing and selling? Basically, marketing is all the activity that makes the sale possible. Marketing makes people aware of your product or service. It puts them in a position to meet you, so the sale becomes possible. Bill Brooks, author and speaker, says, “Marketing strategy is what gets you to the customer’s door in the best possible light. Sales strategy is what you do when you are inside.”
In Relationship Selling, Jim Cathcart provides an “equation of marketing, sales, and service toward achieving success.” He says that marketing is generating a desire for your product or service. Selling is converting that desire into transactions. Service is converting those transactions into satisfied customers. Cathcart says great marketing plus poor sales equals poverty. Great sales plus poor marketing equals burnout. Companies that are sales-activity driven usually have a certain amount of success, but without an effective marketing component, the sales reps usually end up burning out, which leads to high turnover in your sales force.
The Benefits of Targeting Niche Markets
Marketing is a very important component in driving your referral business. Niche marketing takes the basic principles of marketing and reduces them to the level of the salesperson, so that you can begin to operate as an entrepreneur within your company. If you are the owner of a small company, you can also use niche marketing strategies for incredible results.
Three Compelling Reasons for Niche Marketing
1. It creates word of mouth
A great reputation, with people saying good things about you behind your back, is the most effective way to ensure sustained success. Witness a new movie hitting the theaters. If the movie isn’t any good, word of mouth kills it. If the movie is good, word of mouth takes it to new heights. Word of mouth often has much more impact in the marketplace than reviewers do. It’s the same with books, audiotapes and virtually anything else anyone tries to market. If the product or service is good, and enough people know about it, they start to talk about it. That’s what I want for you, and it’s all within your control.
2. It makes referrals easier to obtain
People within industries and affinity groups usually have many friends and colleagues to whom they can refer you. When they know you are concentrating your efforts in their industry, they are usually more willing to help you extend your influence. In my own niche marketing efforts, I have rarely met a client who was concerned about my calling on the competition. In fact, quite often they are on very friendly terms. I’ve received some of my best referrals to my clients’ direct competitors.
3. It helps warm up prospects
If you have to make any prospecting cold calls, they are usually much warmer to begin with, or they warm up much more quickly, because people have heard of you. Targeting a niche market is an important part of building a referral business because it is so much easier to create word of mouth and referrals within a niche where people interact with each other. You can spread the word within a specific industry much more efficiently than across industries. It’s easier to build relationships and provide value all along the way.
- Richard Weylman, salesperson, professional speaker and author of “Opening Closed Doors: Keys to Reaching Hard-to-Reach People” (Irwin Professional Publishing), gives the following example:
IBM historically assigned its sales representatives to geographic areas. Its 62 geographic areas were defined clearly, and a myriad of demographic and psychographic information was available for each of these areas. However, faced with customer demands that it try to do a better job of relating to and solving problems for them, IBM has redefined its markets and restructured its sales force. It is now selling to specific industries, not geographic areas or demographic profiles.
No matter how you have segmented your market in the past, it is ultimately your responsibility to adjust the way you see and define the marketplace now.
To gain access to the marketplace, we should divide it based on what our prospects do for a living, for recreation or where they have special interests. The advantage is that by segmenting your marketing into niches in this way, you can reach out to prospects that associate and communicate with each other. This means you can find and associate with them. They, in turn, can find and associate with you. Without these two factors, your marketing and prospecting efforts will continue to be frustrating and expensive.
Niche marketing works in the following manner. I have a friend who is a sales rep for an advertising agency. She says that using these principles of niche marketing is like trying to move into a new lane while waiting at a traffic light. If you begin to inch over, trying to squeeze your car into the small space between neighboring vehicles, you may not get in. However, if you catch the eye of the driver of the car you wish to cut in front of, he or she will almost always wave you in. Establish some recognition, and you’ll be let in. The same is true in sales. If people have heard of you, even if they’re not sure where, you can get past the gatekeeper, and your voicemail messages get returned. A widespread reputation overcomes barriers.
People Buy What’s Familiar
Maybe you’ve heard the old story of the young man who joined the military and was stationed overseas for a year. Before he left, he bought 365 postcards. He mailed one to his girlfriend every day. For about 10 months, she wrote back regularly. Then her letters stopped. When the young man returned home, he found his girlfriend married to the mailman. People buy what’s familiar.
Niche marketing in a specific industry or affinity group will create that familiarity for you. Most of the referrals I have obtained over the years have been with my clients’ competitors or others within the same industry. When your customers know that you are niche marketing in their industry and that you work from referrals, then they become more willing to refer you to people they know.
When you target a niche market, your perceived expertise in that industry adds value to the transaction. That added value will often keep the sale from coming down to price. Earlier, I mentioned that prospects who like and trust you will give you referrals. Well, when you target an industry and bring that added value to the first appointment, you speed up the whole process. Your industry expertise may help you serve your prospects right on the spot. Once served, they are more likely to serve you. Don’t forget to plant the seed that you work from referrals. Put these two together, and you’ll walk away with referrals from your very first appointments.
The Potential Disadvantage To Targeting Niche Markets
There is one disadvantage to targeting niche markets. Unless you have been hired specifically to target an industry or you have created your business to target a specific industry, I don’t recommend putting all your eggs in one basket. Instead, keep a broad base of selling activity. If you focus exclusively on one industry and it goes through a downturn or other problems, you may not be able to recover. But if you have a broader base, you can absorb your target industry’s difficulties.
If you are brand new to selling or have just started a sales job with a new company, move slowly with these strategies, because targeting niche markets requires a certain amount of activity that does not bring in immediate business. Although over time it will bring you increased business, initially it will take you away from the all-important selling activities like being on the phone or being face to face with customers or potential customers. As a new salesperson or an experienced salesperson new to your company, you need to bring in business any way you can. You need to bring in sales from as many quarters as possible, and I don’t want you to restrict yourself. Use all the other ideas presented in these articles to build your referral business, and the niche marketing strategies will fall into place.
If you have been in your job for a long time and have a broad base of established business, or you have marketing programs already in place that will bring you a predictable income, now you are in the best position to target niche markets.
For Committed Sales Professionals Only
Whether you are new or have been selling for 20 years, niche marketing is for serious sales professionals and business owners only. Niche marketing requires a high level of commitment, not just to sales and your business, but to working the niche marketing strategies so that you’ll do what it takes to make them successful. If you work them halfway, you’ll get halfway results. But if you’re truly committed to working the strategies, and you’re truly committed to yourself as a salesperson, then you will reach new levels of success by targeting niche markets.
When you target niche markets or industries, reputation is everything. You need to go the extra mile. And you can’t burn bridges, because word of mouth spreads faster within specific industries. Every transaction, every encounter, has to be handled with the utmost professionalism. Everyone is a prospect, at least in the sense of helping you build your reputation. If a company is too small or doesn’t really need your product or service, you still must have an attitude of service. Even people in your target industry who aren’t prospects should be treated with professionalism and dignity. It takes a serious commitment to do that great a job.