This content is part one of a four-part series called Leveraging Market Trends to Reach New Clients from a conversation between Joe Woodard and Mike Michalowicz on the Scaling New Heights Podcast. To read the other parts in this series, see the links below the article.
Joe: I'm going to jump right into the first question. Marketing is all about reading trends. What are the trends happening right now?
Mike: It's funny, that's the first question I always get. Although I could say the electric car is a trend, the autonomous bar, or all these different things. The real question is where do we want to look for the trends? The analogy I use is surfing. When you go surfing, you don't say, "Hey, where are the waves?" There are billions of waves in the ocean. You say, "Hey, where's the hot surfing spot where I want to surf?" The hot spot is convenient to you, it's in your neighborhood, or you happen to be vacationing in the area, so you actually pick the spot first, then you look for the waves.
The question that I pose back when I’m asked about marketing trends is, “What is the niche that's in your neighborhood?” Where do you want to target? Where do you get the most joy? What are you fascinated and interested about? It could literally be in herpetology, the study of reptiles, it could be in the yarn industry, it could be electric cars. Each industry and all niches that exist all have their own trends going on. You need to pick the niche that you’re targeting and then look for the trends in that niche.
Joe: You say marketing is tied to niche, and you often quote the “riches in the niches” saying. What is niche’s relationship to marketing effectiveness?
Mike: The way a community responds is relatively consistent, but they usually stay congealed or connected with their community. Let me put it in another way. Birds of a feather flock together. For example, I service the accounting and bookkeeping community. I know there are conferences that accountants and bookkeepers attend - Scaling New Heights is the top echelon of that. I appear at those conferences and basically market myself there consistently. Once you pick your niche, the question is where are their congregation points? What are the conferences they go to? What are the magazines they read? What are the podcasts they listen to? What are the blogs they read? Who are the influencers in that community? You need to start circulating there.
The irony is this is a strategy used by all successful companies, but particularly these super big ones we think about, like Coca-Cola for example. They are a massive company, but they broke into the large consumer market after originally being a cough syrup. That was their niche and they expanded after making significant money. My warning is, don't try to start off broad.
Now that Coca-Cola has gone broad, when they run commercials, they are not trying to sell you, they're trying to simply associate you with the brand. They want you to see their logo over and over again, and over time you'll become more comfortable with it. Because we trust the brand, when we are in the market for soda, we will buy a liter of Coke and not buy a liter of generic soda, even though logically they're the same ingredients. We have better brand affinity.
We, as small businesses, have the same opportunity. Take your accounting practice and target a niche. Ideally, you should target an industry niche because those industry niches will have established congregation points. They will have conferences. If you're going after the herpetology market, there's the reptile conferences, there's the animal conservation conferences. If you're going after a yarn market there's the spinning conferences, the dying conferences. Once you start appearing in that community, the community you choose, again, and again, and again, you will become the Coca-Cola brand for that niche.
Joe: That is powerful. And there is a component too that's a softer side of marketing and that's the word of mouth. An example is Greg Bossen who has a non-profit niche. He says his marketing is largely done at this point by his momentum. He would have to pour more energy into it if he wanted to significantly grow his practice, but he can sustain his practice on the fact that non-profits talk to non-profits. As they talk within the community, they refer each other. When you practice within a niche and you build brand and expertise, and expertise is connected to brand of course, then the whole thing begins to have its own inertia, and that inertia can be both building and powerful.
Mike: It reminds me of a world-leading heart surgeon for example. If I had a situation where I need heart surgery, I would ask friends and acquaintances and I would research, “Who's the best heart surgeon?” The best heart surgeon attracts customers through word of mouth. On the other hand, general practitioners conversely attract people in the general vicinity. Someone looks for a general practitioner within a certain driving distance.
When we focus on a niche, we can be a heart surgeon. When a business has a critical issue, like a heart failure, if you will, for the business, they are absolutely going to ask their trusted confidants, their friends, the people in that community. That is how the discovery is made – through word of mouth.
It's a shame, Joe. Most accounting and bookkeeping firms are general practitioners meaning they want to be convenient and available for everybody and therefore they attract people with the equivalent of the cough or a cold. But the second the client's business issue becomes a serious issue, the client moves on from the general practitioner and goes to a surgeon. The surgeon, the elite niche providers in our businesses, attract the highest premiums because they provide a very specific solution for their clients.
Joe: Specialization and niche go hand in hand. Both of those feed marketing, give you a targeted marketing campaign, and create word of mouth energy.