Why You Need To Choose A Niche For Your Agency

This video is going to be about choosing a niche for your agency. And you hear people talking about this all the time, but they're usually quite light on the details and it comes across as a very basic advice, like you just have to choose a niche or just start a niche and then you know, you'll just be fine. So in this video we're going to go over what that actually means, the actual benefits of doing so, and the difference between the advice of niching down for someone who is already a successful agency versus an absolute beginner. So if you've never seen one of my videos before, my name is Matthew Larson and all we talk about on this channel is agencies, agency growth, how to scale an agency and so on. I have three agency exits over the past 12 years and I'm currently working with over 550 agencies every single month. So before I get into the details of this video, I really want to make an important differentiation. And this video and this advice is more so going to be for the people who are already successful agency owners, even more so than those who are just starting. Because when you are already successful and you niche down, you become exponentially more successful very quickly. But when you're just starting out, I really don't recommend just picking a niche. I recommend getting as much cash as possible from basically whoever will pay you so you can stack cash, you can break self limiting beliefs and you can get experience as fast as possible in different things because you just don't know enough to choose a niche in my opinion at that level. So the first thing that I want to talk about is niche criteria and there's five main things that I believe lead to a great niche for an agency. And the first is that niche is growing, so it's getting bigger and bigger every year. An AI automation niche is a good example of this now. So it's getting bigger every year or at the very least it's not shrinking. Stuff like in my opinion SEO is getting more and more replaced by like generative AI and stuff like what would be another one I don't know, anything to do with, news, newspaper type stuff are examples of shrinking businesses that I don't think are going to be in their current form for, you know, the next 10 plus years as opposed to a lot of the other stuff. The second one is that there should be at least 50,000 business owners or prospects in that niche. It's very difficult to make a niche as an agency owner in my opinion, if you just have like 200 people in it and that's usually the case of they just have, you know, they only take eight, nine figure clients. And that's more of like a, it's a very, it's a real way to do it. But that's more of like a sales based agency where you're just going in and networking and building relationships over years as opposed to the agency style that I like where you make paid ads, you make content, you do outreach, you form partnerships and you just get a massive amount of clients. The next thing I always think is that the leads are easy to find and contact. Very underrated thing or your niche. But there are certain niches where it's just very, very difficult to find people to cold email. You know, it's very difficult to find ways to advertise to them. You know, they don't watch a ton of content. And then there are some niches that do all of those things. So I really like niches that it's very easy to find and contact potential leads. And the fourth and fifth point are they have money and they have a pain point. They don't have money if they're a poor niche like realtors typically or like life coaches, not the best or authors and they have a pain point. There's certain niches where there's just not a lot that is so wrong that they have to solve a problem right now and they're having the money to pay for it. So those are the five things that I really like in when I'm choosing a niche and before I get to the rest of the video, I really want to make an important distinction because I say you should never ever change your niche unless it begins shrinking type thing. And the reason for that is you want to really understand the difference between niching down and changing your niche. Those are two very, very different things. Niching down will give you more focus, it'll give you more margin, it'll give you more efficiency, it'll help you build a better reputation in that specific niche. Changing your niche is just starting all over again at zero. You basically take in all of the time you spent and pushed it down the drain. Almost every niche is going to work to some degree. If it's not working for you, it's not a matter of you've tapped out that niche or you've expended the audience. Like a lot of people will say. It's usually that you're just terrible at what you do and you're not having any results and you're trying to blame it on something other than your own shortcomings And I know that because I've been there. You know, I've have a long career in agencies, 12 plus years at this point. And there's almost nothing that I haven't either done myself or haven't seen through my clients. So the first reason that you really want to niche down is for what I'm going to refer to as the consistency of fulfillment. And the number one problem with agencies is they don't get the result for their client. And if you, to some degree, if you could get the same result for your client every time, you'd be probably one of the richest people on earth because you could charge a million dollars and get that result and just do that over and over and over again. But to some extent, a lot of people are kind of bad at what they do, but they're not doing themselves any favors. Like a very big example of this is two niches that aren't really niches, but we'll call them niches. E commerce and startups. So those aren't really niches because other than being hosted on Shopify, most e commerce stores have really almost nothing to do with each other. Even if you have two Shopify stores selling collagen, a lot of them will have different formulations, different packaging, different messaging, different target audiences. Where, you know, one might be a collagen specifically for women, one might be a collagen for everyone, one might be a dog collagen. And it's just very little that you can take and learn and apply between different clients. Especially if one e commerce client is a collagen store, then you have a home serve or like a home goods store, and then you have a clothing brand. There's really almost, almost nothing that you can copy and paste between those things and make your service more efficient over time. Same thing with startups where the only thing a lot of them have in common for those people in the startup niche is that they raised money and they're a tech company, usually really don't have anything more in common other than that. And that makes it difficult when you're, on the other hand, you're doing something like I'm an electrician agency, or I do SEO for local businesses, or I do, you know, who knows, I knew web design for SaaS for example. You actually get a lot of benefit in the consistency of fulfillment because your learnings that you get from each client can be applied to all current and future clients. So one breakthrough here will affect, you know, if you have 20 other clients, all the other 19 breakthroughs as well. And when you get really granular on your niche like I am, just do Legion for electricians, for example. It's basically like you figure it out once you figure out what works and then you just duplicate that. An electrician in Los Angeles, an electrician in New York City, electrician in Miami, electrician in Atlanta, and over and over, and it's really the same thing every time. And it's nearly guaranteed to work. So instead of just doing Legion for local businesses or lead gen for home services, in this case, niching down from home services to electrician will actually probably take the amount of time you are successful in quotes, from 30 to 50% up to 80 to 90, even 100% because it's just the same system over and over and it's nearly guaranteed to work. And that has a lot of benefits in and of itself as opposed to you're just in e commerce trying to build everything from scratch over and over. The main benefit of having consistency of fulfillment is higher margins. And that is because, you know, a few reasons. Number one, obviously you're getting the result, so you're going to have less churn, you're going to get the results, so you're going to have higher premium pricing. But all of your hiring, all of your systems, all of your stuff that you have, all of your internal tools that you could create are all tailored and dialed into that one specific niche. So it becomes very, very productized, very, very efficient and you get a lot of reps at it. So you have the tools, you have the systems, you have the trainings and you're making the hires to do that. And because they are in the same niche and they're getting so much experience, they're getting a lot of high reps instead of, you know, you do a supplement brand once every six months for an e commerce agency, you are doing, you know, an electrician agency six times per day and you really get good at it and your team gets a lot more skilled and you can actually hire and trust and train like virtual assistant types or outsourced overseas labor a lot more than you could otherwise. Just because it's all systemized, there's all SOPs, you have the tools and that kind of stuff. Because you have higher margin, you can reinvest more in your paid ads, you can reinvest more in your content. And that really leads to also what I'm going to determine or refer to as the effectiveness of messaging. So it's the difference between I'm the electrician agency versus I'm A marketing agency that does lead generation for home services. It's a big difference when you are trying to do something because everything is streamlined and consistent. If someone's just saying out there, I want the best electrician agency versus I want the best marketing team, okay, we're going through all these agencies, local, you know, inter or national, international, whatever. Okay, do they do this? Okay, we gotta go scroll through it. Okay, now do they even work with electricians? I don't know. Versus, you know, marketing for electricians. Electrical marketing typed in Google, Boom. Number one agency shows up and there's no jumbled messaging because of that. It's not like we are doing, you know, offering full stack service of okay, we're an agency that does SEO, Facebook ads, email marketing, Google Ads, influencer marketing, web design. And like when you're doing a normal full stack agency, it's we are just an electrician agency. We do it all and it's the same thing. But it's much better messaging and much better branding. And you're one entity that way. As opposed to a full service and full stack agency that is the jack of all trades and master of none. You are basically a full service agency, but you're a full service to a very specific niche. And that just makes it a lot easier. The last thing that makes this so effective is that you have a lot more and a lot better opportunity for word of mouth and search results. So like I said before, when someone says who's the best agency for electricians? Your name comes up. When someone searches best electrical agency, you're getting all of the inbound traffic, you're getting all of the backlinks, you're getting all of the domain authority, you're just going to pop up. And that is a big contrast to a lot of people where it's actually very difficult to refer the average agency to someone just because they do so many different things. They can't just say, this is my, you know, marketing guy, my electrical marketing guy. They say, you know, because this person does so many different things, it's very hard to refer them. If you do Facebook ads, Google Ads, web design, email marketing, like people aren't really sure even if they're clients what you are. And when someone brings up that they need a service that you provide in conversation, they're usually going to say someone else as opposed to what you're actually offering. So that is what I think about the niches. It's not that you need to change your niche or select a niche, it's you need to niche down, and it's always going to make you a lot more money to be the one who dominates a certain niche. You're going to have a lot more margin, which means you can reinvest in people, you can reinvest in ads, you can reinvest in content and get even more clients, and you can really drown out your competitors like very crazy. When you do this right, you are going to be the behemoth in your, you know, very specific niche, as opposed to just a general marketing agency that gets lost in the sea of hundreds of thousands of marketing agencies in their mom's basement. So I hope this was helpful and I'll see you in the next one.