Niche Businesses Finish First

by: Sharon LeBlanc
Consultant: Training and Research

Would you invest in your own automotive business if you didn’t already own it? Now there’s a provocative question! Marketing to achieve a competitive advantage is vital to the success of any business. Without it, you will have a difficult time gaining new customers and an equally difficult time keeping the ones you already have. Once you have established your goals (monthly sales quotas, increase of volume sales), next you should consider choosing an automotive-related target or niche market. Niche marketing is the opposite of mass marketing. It’s a unique product or service with a very precise, target market.

Judging Demographics
There are three qualities to a market:

There is a demand that needs to be satisfied.
The people must have the money to spend.
These people must be willing to spend the money.

Judging demographics can give retailers the competitive edge they need to run their operations more effectively and profitably. One way to determine your target market is to study your established customer base. Do you see mainly elderly customers, or are they DINK’s (Double Income No Kids)? This will help you determine the scope of your targeted market. You can also check out the local Chamber of Commerce or City Hall. But don’t forget about the Internet. There’s loads of info there on Canadian Consumer Demographics. The most expensive way of course is to hire a professional marketing company. They can research your area and supply you with a targeted mailing list.

Here are some tips to consider about choosing your niche marketing:

Got a passion? The most important step in discerning your niche is to focus on what you love, and where your strengths are. Chances are, you already know a lot about it, and that shortens the learning curve.

Publicize your niche business to everyone you know in the industry. (vertical marketing)
Put your niche in their face. (press releases; e-mail blasts; newsletters; magazines; radio)
Who would need your product or service? (what age? what sex? what income?)
Who can afford your product or service? (ask for customer referrals)
How do they benefit by your product or service? (provide testimonials, press releases, projects you’ve completed)
Make sure you have a great web site. (Does it have curb appeal? Is it information driven?)
What publications does your target market read? (advertise in them)
To what organizations do they belong? (get involved with them; be a guest speaker)
To what radio stations do they listen? (advertise on them)

Network · Network · Network
When is the most important time to work your network? When you don’t need it. And it’s certainly not when you’re in the office. “Your best thoughts about your business won’t happen while you’re at work,” says David Allen in his recent book Getting Things Done. Network with people who know people in your target market. And talk to strangers. They often become a great contact. If they don’t need your service, maybe their next door neighbour does. Target consumer and trades publications with press releases. One more suggestion – try to find like-minded businesses to partner with that provide services to your same demographics so you can help each other be more successful. Cross-promotion is a great way to initially reach your demographics. Then, consistently brand new products and services to them!

Pick-up or 540? You are what you Drive

Perhaps the automobile industry does the most target marketing of all. You can’t design a car and then decide who it should be aimed at. Not every car is meant for every person in the market. It’s pretty clear that a BMW 540 appeals to those who are fun loving and like to be noticed. Their car is their statement that says, “Hey, look at me. I’m successful. I’ve made it!” BMW 540 targets a specific market of 30 to about 50 year olds, mainly men who love the looks, handling and the performance of the engine. But that’s only one segment of the market; there are so many others. The car manufacturers are trying desperately to capture these niche markets so they can surpass the competition.

For example, you have the “functional” vehicle that safely gets you from A to B. There’s a HUGE market here, predominately for that second family car, largely driven by women who either have no income of their own, or a significantly lower income. They want something safe, reliable and cost effective. And so, the Ford Focus is introduced, and becomes one of the largest selling sub-compact, North American cars.

When Ford introduced the first Mustang in 1964, it was to appeal to similar market. Ford knew that middle class, American women wanted functionality and style. No one needs to ask how hugely successful the Mustang was. The young mothers of America lined up for them because they were a 4-seater vehicle with room for the kids in the back, were fuel efficient, had loads of sex appeal (you could order hard top or convertible) and it was affordable. No longer did Ford only offer the black-only Model T Ford with no options. Cars today are about more than transportation and being functional. It’s about personality, attitude and life style. And, that’s the reason Canadians trade in their cars so often.

So, if you’re 50 or 60 something, if you want luxury, and you live in a metropolitan area, you’ll buy a Jaguar or BMW 540. If you’re 30 or 40 something, if you want rugged for the cottage, transporting hockey equipment to the arena or shrubs from the nursery, you’ll buy an SUV. If you’re a farmer or rancher, you’ll likely own a pickup truck. If you’re a 20-something, upwardly mobile professional, you’ll be lined up to be the proud owner of a BMW MINI or Infiniti G35 Coupe. In every case, one’s needs are reflected in their vehicles. You wouldn’t market a Mustang in the midst of the wheat fields of Saskatchewan.

Wise Companies Focus on Niches
What’s that saying ‘A jack of all trades, but a master at none’? Philip Kotler in Marketing Insights from K to Z says that wise companies focus on niches. “There are riches in niches,” he says. “Although volume is low, the margin is high. And competitors keep out because the niche may be too small to support two players.” He also advises to be an expert not a generalist, and remain within the niche once you have captured the market. Have a focus, adhere to it, and cultivate it, rather than become a generalist. “Instead, sell additional products and services to the same niche,” he advises. “Also, look for more clients within the same niche.” For example, in the automotive industry, one could market to the dealers, manufacturers, distributors, service repair, finance and insurance, or transportation and logistics.

Is your Business Card Broken?
Your business card is an invaluable marketing tool critical to your niche networking. “If you think designing an effective business card is easy, then here’s some bad news: your card probably stinks,” says Ian Portsmouth in PROFIT magazine, January 2003. “A card must make a strong and positive first impression.” Here are his pointers for creating the best biz cards for your target market:

Does your card offer appropriate contact info like your URL or address?
Does your card say what your company does? The more specific, the better.
Does it include a compelling marketing message?
Is it legible?
Is it visually pleasing?
What’s on the back? Nothing? What a waste! Make your business card a winner by putting some pertinent info on the back.
Is your card durable? Cheap paper tears, and homemade cards can bleed.
Is your card memorable, with a catchy slogan or interesting material?

Don’t go anywhere without your card. You never know who you’ll meet. Join organizations where you can network with people who require your services. Pass out your business card to everyone you meet. It’s simply an opportunity to talk to strangers, and it’s one of the best ways to network.

Carve out your niche
Once you’ve determined your goals and selected your targets, you will need to develop a budget. When you have decided what you are able to spend toward marketing, begin planning. Now you are one step closer to reaching your targets and gaining loyal customers. Remember, the more narrow the scope, the greater your chances to success.