Niche Marketing: How Narrowing Your Focus Can Broaden Your Appeal...and Profits!
February 2001, An E-News Featured Article
Over the holidays, amid the myriad responsibilities — shopping for presents, wrapping gifts, buying greeting cards, preparing food — another chore was added to my list: Swing by the Honey Baked Ham store to pick up the holiday ham. Upon arrival, there was a line outside the door. Good thing we’re here in sunny Southern California, I thought to myself. Thirty minutes and many frazzled nerves later, I was the proud owner of an eight pound, spiral-sliced, honey-glazed ham.
Now, they have ham at the grocery store. Believe me, I was there many times over the holidays. They even have spiral-sliced, honey-glazed hams. What they don’t have is authentic Honey Baked Ham, however.
Somehow, the Honey Baked Ham people have convinced us — whether justifiably or not — that their product is worthy of making a special order, adding an extra trip to another store, and waiting in line to pick it up. And why not just buy one at the grocery store? Well, Honey Baked Ham is superior, they tell us. Do we know that to be true? Probably not, as we’re not willing to jeopardize our big holiday dinner with an entree of possibly inferior quality.
What they’ve done is a textbook example of good niche marketing. Here’s the logic: All they sell is ham, so it must be good, right? No, change that: It must be the best, right? They’re the experts. That’s all they do. How else would they stay in business? This is the ham you absolutely must have.
Here’s the moral of the story: Specialization pays. The specialist’s business thrives because people know they need the services provided and they cannot obtain the same level of service, knowledge and/or insight elsewhere. Looking back, you might’ve considered anyone crazy who told you they were going to open a store that only sold hams. Let that lesson guide you to make a similar bold move in your real estate career.
Narrow Your Focus, Expand Your Appeal.
When you try to cater to all people, your appeal is wide, but not very compelling. When you focus on a specific product, or, in real estate terms, market segment, you become much more appealing and make a much more compelling argument for working with you. That’s what niche marketing is all about — positioning yourself as the Honey Baked Ham store against a sea of average real estate agents positioning themselves as the plain old grocery stores.
So what’s wrong with being the supermarket, you ask? After all, they’re profitable, too. Here’s the problem: In real estate, if you try to be all things to all people, you’ll be remembered for nothing. What will differentiate you from every other agent positioning themselves as supermarkets? Quite simply, nothing.
So if you find yourself muddling along in your career or your productivity has plateaued or decreased, or if you’re just looking for an exponential increase in production, it’s time to seriously consider the your options. Narrowing your target market is one of the most advantageous methods to reach that goal.
You’ve Got to Have Faith
Before we get too in-depth, let us warn you: Niche marketing is not for the faint of heart. For most agents we talk to, becoming a Special Agent is a frightening concept. The idea of limiting your business is contrary to the norm — Realtors® are renowned for their attempts to generate business anywhere and everywhere possible. Niche marketing is about taking a progressive view to real estate marketing, one that recognizes the fact that those who specialize make a much more compelling argument for why anyone would work with them, and in turn, are much more successful.
Before you begin to identify your niche, the first thing you must do is believe 100 percent in the philosophy behind niche marketing — that by specializing and targeting a unique market segment and severely narrowing your focus, your appeal will improve drastically.
Image is Everything
Once you are confident that niche marketing will work for you, it becomes a matter of commitment. Niches cannot be worked halfheartedly. The success or failure of your niche depends on how convincingly you can paint the picture that you specialize in exactly what a given consumer is looking for. What that means is you cannot stray from your niche as it will water down your image, and relegate you back into the pack of “average agents.”
For an example, let’s say because of your past experience in the medical field and your ability to relate to and network with medical professionals, you market yourself as “The Doctor’s Realtor.®” Then you get a call from a lawyer friend of one of your clients. He says he’d like to talk to you about listing his house. A vast majority of agents would probably say that you take the appointment. A very small percentage who truly recognize the power and importance of having a niche would be correct, however. You do not make that appointment. Refer the business elsewhere and take a nice referral fee for making one simple phone call.
By the same token that the Honey Baked Ham store wouldn’t accept an order for a prime rib roast, you must stay committed to your niche and constantly maintain and reinforce your image as a specialist.
No Limits
Still with us? Good. Your forward-thinking business savvy will help you with this next section — where to start defining the niche that’s right for you.
There are as many ways to segment the population as there are people. From the very specific to the very general, the possibilities for niche marketing are only limited by your imagination.
Traditionally in real estate, an agent’s farm area is a group of homes within a certain geographic area. That type of geographical-based niche is a good start, but to take it a step further, analyze other demographic information such as professions, like-minded interests or other common qualities.
To get some ideas, take a look at yourself, your family and your past and current clients. Think about how you would categorize these people in terms of geography, lifestyle, hobbies, occupation, ethnicity, or any other possible defining aspect. Pay attention to trends and patterns. The more you, your clients and the people you know have in common in a specific area, the more likely it is that you could turn this feature into a unique marketing concept.
There’s even a possibility you already have a niche, but you simply haven’t realized it. Analyze your past clients on demographic or geographic categories and determine if a pattern emerges. Perhaps 80 percent of your business came from contacts through your daughter’s soccer team, or maybe all your sales fall into a certain price range that would allow you to market yourself as “The Fine Homes Specialist.” The powerful effect capitalizing on this niche will have on your personal marketing is well worth the required research time.
Some of the niches you may have heard of in the past include condominiums (e.g. “The Condo King”), ranch properties (“The Ranch Ranger”), golfers (“The Golfer’s Realtor®”) or singles (“The Singles Specialist”). We’ve heard of people who specialize in pool homes, gated homes, homes with basements or work only with new construction.
One marketing approach never fails to make us chuckle. Dan O’Brien of Falls Church, Virginia niche markets using his name. Capitalizing on the heritage associated with his name, he markets to other O’Briens in his area, and with successful results. Of course, he doesn’t rely on this niche for the entirety of his business, but it’s one unique way to tap into a market outside his normal farm area and quickly form a bond with prospective clients.
Your first impression may be that these things are too trivial to focus on exclusively, but ask yourself this question: If you were in the market for a home and you definitely wanted a pool, wouldn’t you make sure you at least met with “The Pool Homes Specialist” before choosing an agent? And do you suppose there are enough people in your town who want a pool to keep that agent busy over the course of a year?
Which Niche is Right for You?
When looking for your niche, make sure it allows you to offer a unique benefit. And to determine if this niche will work with you, consider these three things:
1. Personality Fit.
Do you feel totally comfortable with the people in this group? Do you understand them? Do they feel totally comfortable with you? Ideally, you should find a niche that fits your style. Think about the things that you and our current clients have in common to help narrow the field.
2. Competition.
Are any other Realtors targeting this group? Make sure that the niche you choose is one that is the best fit for you. Beware of looking like you're jumping on the bandwagon. Even if the group is large enough to support competing agents, make sure no one agent has 30 percent of more of the market share. Taking on a dominant agent head-on is the surest way to fail.
3. Size.
How many home sales or potential home sales does this group of people represent per year? How much is your time worth? You must be sure you can get enough business from the group to support the energy and funds you'll need to devote to marketing to make it pay off.
One Niche, Two Niches? Small Niche, Big Niche?
Still perplexed as to what your niche could be? For starters, let us remind you that you don’t necessarily have to confine yourself to one niche. It’s possible to alter your marketing materials to position you as a specialist to different market segments. Keep in mind that niche marketing is more about image than anything else. It’s simply a marketing technique, and a highly effective one at that.
You can easily expand your client base by niche marketing yourself to different groups using your Hobbs/Herder PowerKard. Customize your messages to cater to individual market segments, and don’t be afraid to call yourself a specialist in a new area.
So let’s say you believe in niche marketing but completely demolishing your current system doesn’t seem realistic to you. Here are two ideas of what you can do:
1. Add a Niche- The most simple way to work yourself into niche marketing is to continue to the status quo and then niche market to a new market segment. This will expand your overall farm area and get your feet wet in niche marketing.
2. Put a New Spin on Your Marketing- Perhaps you don’t want to change your target market at all, but you simply want a more effective way of reaching it. The answer is simple: revamp your marketing to reflect a niche. Rather than sending the same messages and materials to your entire farm, break it up into specific areas or subdivisions known by a common name.
For example, let’s use the fictitious city of Riverview, U.S.A. Upon analysis of your sales figures, you find yourself taking listings from five specific regions within Riverview. Rather than continuing to market to the entire city, target your PowerKard messages to each of the five specific subdivisions or regions. Send one PowerKard calling yourself “The Meadow Ridge Specialist” (Meadow Ridge being an identifiable area within the city), another PowerKard positioning you as “The Pheasant Lakes Specialist,” another as “The Rolling Hills Specialist” and so on. Concentrating your message is simply a more powerful way to reach your entire market.
The Ball’s in Your Court
As you can see, the possibilities are virtually limitless. Now the question becomes do you have what it takes to make that bold step forward to differentiate yourself from the pack? Agents who take their cues from successful marketing principles and real-world examples understand that limiting your focus will actually increase your appeal.
If you do have what it takes, you’ll put into action a chain of events that will change the way you look at your career. It will infuse it with new life and renewed vigor. It will expand your appeal exponentially. Your name will become instantly recognizable and identified with something, rather than “just another Realtor.®” In turn, leads will increase. You’ll find it’s easier to convert those leads into clients because the prospective clients already believe that you are the solution to their problem. More clients means more revenue, and more revenue should lead to more profit.
Now ask yourself: Can you afford not to be a Special Agent?
We would like your feedback on this article. If you have a moment, please share your thoughts with us and answer these two questions: 1. If you don’t specialize in anything, what will differentiate you from the pack? 2. If you continue the status quo as an “average agent,” where do you see yourself five years from now?