Up until now, you probably relied on referrals and word of mouth to bring on new clients. Yes, current clients or other referral sources can help you find new business, but you can’t depend on them alone.
Word-of-mouth marketing ebbs and flows, and many agencies found this out the hard way when 60% of brands cut their agency budgets at the start of the pandemic. Suddenly, revenue decreased, and client recommendations trickled to a halt.
When you have only one source of new clients, it limits your growth potential. You can’t control the volume or the quality of those leads. That’s why finding a niche is the key to developing resiliency and gaining credibility in your industry.
As an agency, it’s important to cement your verticals and own those markets in order to scale your business in a consistent and planned way. That way, you’ll be protected even if one pipeline dries up.
The Importance of Niching Your Agency
Successful agencies understand who their target clients are. Every other aspect of business — sales, operations, marketing, etc. — becomes infinitely easier once you know what market you’re working in. When you’re an expert in a specific vertical, you become familiar with its problems and perspectives. However, if you’re a "jack of all trades," you’re also a "master of none." So instead of catering to everyone, take time to discuss what your niche is with leadership.
Once you pinpoint a market and niche your agency, you’ll be able to:
Tailor your offering.
Throwing things at a wall and seeing what sticks is neither an efficient nor sustainable strategy. By identifying and committing to your core audience, you’ll be able to carefully test and refine your services to cater to their needs. For example, let’s say you target financial companies. Over time, you’ll learn about their pain points and customers and be able to position your agency’s offering accordingly. This will make you the best choice for any brand in that industry.
See the future.
Every market has its own trends and yearly fluctuations. When you take time to define and own your niche, you get an inside look into that market’s details. This lets you become an expert in your vertical and even predict where things are heading. Insider expertise pays dividends in terms of serving current clients and establishing credibility with new ones.
Increase your growth potential.
Because you offer specialized services to a niche market, you can do superior work compared to agencies without a specific target audience. And even if you have competitors in your vertical, you can outdo them by figuring out what problems and opportunities they haven’t addressed. As your portfolio grows, you’ll attract new clients who want to see the same successes.
Focus on pulling in the right clients as you niche your business. Not every brand will be the best fit for your agency, and that’s OK. After all, you’ll see decreased turnover because you can better meet the needs of the clients you do take on. Plus, you’ll be able to charge prices appropriate for your services and level of knowledge.
So what are you waiting for? Future-proof your business for years to come by niching your agency.