Every year, on the first Tuesday in November, Australia’s most-famous horse race, the Melbourne Cup, is run. It’s known as “the race that stops a nation”, and indeed it almost literally does – as millions of Australians interrupt their day to watch the race. Office workers stop to crowd into the boardroom to watch the race on television; shoppers stop outside television screens in department store windows; restaurants and hotels have special Melbourne Cup events; and ordinary Australians who don’t usually bet on anything make a once-a-year exception for the Melbourne Cup.

For those keeping score at home, that’s today!

In the weeks leading up to it, the Australian media becomes obsessed with the Melbourne Cup. And one of the people they turn to for his opinion is one of my clients, Max Hitchins. And why not? His record is impressive. In 21 of the past 23 years, he’s picked the winner in his top six; and in 13 of those years, he has successfully predicted the actual winner.

I featured Max in my book Fast, Flat and Free, as the perfect example of somebody who has specialised in a particular niche market. Every year he publishes an e-book with information about the race, including his predictions. He has thousands of fans who buy the e-book and use his insights to place their bet – for fun or profit – each year.

If you’d like to be one of them this year, it’s not too late! Grab yourself a copy of the e-book at pickthecupwinner.com.au.

And good luck for the big race!

When I advise clients to focus on a niche, one of my two main criteria is: Pick people you like to hang out with (The other is “Pick people who want what you’ve got”).

In a recent blog post, Has Your Brand Picked a Lane Yet?, Scott Ginsberg expands on a similar idea, and suggests you ask yourself these questions:

1. Will this choice add to my life force or rob me of my energy?
2. Does this choice add wood to my internal fire or sprinkle water on it?
3. Will this choice propel me toward an inspiring future or will it keep me stuck in the past?
4. Will this choice bring me long-term fulfillment or will it bring me short-term gratification?
5. If I make this choice, what will I be saying no to?

This is brilliant! He’s talking about brands rather than niches, but the same principles apply.

I’ve been reading Toby Marshall’s excellent book “Small Business Internet Marketing”, and he says something that I completely agree with:

“If you don’t have a niche, don’t even think about SEO [search engine optimisation]. Complete waste of time unless you are a giant corporation. How can you optimize for everything? Dumb to even think it’s possible.”

Not only do I agree with him, I think it’s one of the biggest mistakes business owners make with their on-line strategy (In fact, with their business strategy overall).

It’s tempting to think that because you’ve got a presence on the World Wide Web that you can reach the world. You can’t. Focus on a specific target market, and work on reaching them instead.

I don’t know a sure-fire formula for success, but trying to be all things to all people is a sure-fire formula for failure.

Find a niche, and serve that niche!

Most businesses make the mistake of trying to reach too many people in their market – which leads to more competition, soaring promotion costs, and minimal differentiation. They cast their marketing net too wide, scared that if they don’t reach out to everybody, they will miss opportunities and lose market share to their competitors.

Take the opposite approach and focus on smaller niche markets. The smaller your market, the better your offerings for that market – which means you can raise your prices, increase your profits, and virtually eliminate your competition.
By all means, search wide to find the right niche markets. But, when you find them, dig deep.

Here are some examples of businesses catering to niches:

• Sales trainer: Focus on a particular industry, such as pharmaceutical companies or financial planners.
• Book shop owner: Cater for readers who would like to form, run or join book clubs.
• Financial planner: Concentrate on a particular demographic group, such as young professionals or single parents.

One of my favourite niche marketing stories is about Internet marketing expert Frank Kern, who makes $1,500 a month from a Web site selling an e-book that teaches parrots to talk. The key to his success is that he’s chosen a tiny niche market. He’s not teaching your bird how to talk (though there is a “Bird Talk” magazine!); he’s not teaching you how to look after your parrot; and he’s not going for the wider market for pet owners. Rather, he’s chosen a specific group of people. There may not be many of them, but his e-book is perfect for them.

Why niche?

• Your products are tailored to the needs of a smaller market, so they are more valuable to customers.
• You understand many of your customers’ needs already, so it’s easier to build rapport and get to the heart of their problems.
• You speak their language, not yours, which puts you a long way ahead of most of your competitors.
• Customers see you as a trusted adviser, not just a supplier. They’ll ask for your help and trust your advice – even when they want help about choosing suppliers!
• You’ll get more referrals from customers who recommend you to their colleagues in the same industry.
• You can charge a higher price for your products and services, because they more closely match the customer’s requirements (That’s why a brain surgeon charges more than a GP).
• There’s less competition. For example, if you’re a book shop owner, when you go head-to-head with Amazon.com, you’ll probably lose. But if you focus on local book clubs interested in theme nights, you target needs that Amazon.com doesn’t service.
• Instead of aiming for expensive mass-media advertising, you focus on lower-cost exposure that more suits your market – particularly on the Internet, with things like participating in forums, commenting on blogs, sending Twitter messages to your followers, and joining certain membership sites.
• When your customers know that you’re offering specific solutions to their real problems, it makes the sales process so much easier for you.
• You become recognised as an expert in the niche, rather than a supplier pushing a product or service to the market.

Finally, remember every customer is already a niche of one. So if you’re not niche marketing already, you’re missing the point.