MBA1950 Q&A Wednesday: Should I first try to win over a small part of a small market?

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Hey O welcome to the 100 Doll RBA Show Business Simplified every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and today's episode is Q and A Wednesday. On Q and A Wednesdays, I answer a question from one of our listeners. If you've got a question you want to ask, just go ahead and email me over@omar100mba.net Today's question is from Mika from the Netherlands and Mika asks, I'm working on starting my own e commerce store and I'm really looking to push my brand, but it's in a relatively small market. Should I try to win over a small portion in that small market or try to take on that small market altogether? Great question by Mika. We're going to get into exactly what a small market is. Then we'll go through the positives and the negatives of focusing on a small portion of any market first before moving on and how this specifically applies to e commerce businesses. If you're listening and you're running an ecommerce business or not, marketing to specific niches or corners of any market is A strategy worth knowing so you can see if it's viable for your own business. So let's get into it. Let's get down to business, okay?

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So Mika wants to know, is focusing on a portion of a market, even if that market's small, a good idea? Or should they just try to take over the whole market in one shot? Now, a lot of E Commerce stores are basically B2C retail stores, meaning that they sell direct to consumer. Any B2C business is more likely to have a bigger market than you imagine. I would actually verify how small you think your market is. I would try to do as much research as possible, look at your competitors, look at their market share to get an understanding of how much is a total market size. Because a small market is like half a million people. But let's say it is a small market, okay? Even within a half a million people, there are different niches, there are different sectors, there's different corners of that market that you really should try to focus on at the start. Why? Because you need to get momentum, you need to get wins, and you need to nail and understand your customers really well. And it's hard to understand all your customers when you're trying to serve all the different kinds of niches. Let me give you an example. There's a business coach called Dan Martell. He's a very successful business coach, but he doesn't do all business coaching. He only specializes in SaaS businesses, software as a service. Now, there are a lot of businesses in the world, but there's not that many SaaS businesses, about half a million. Now he's even more niche than that because his product, his coaching program is called SaaS Academy. And it starts at companies that have $10,000 revenue every single month or more. So anything below that, he is not the coach for you. But even in that small market, he goes after certain niches. So he does SaaS businesses that are in the fitness space. He tries to market to those types of businesses or business owners. SaaS businesses that are B2C SaaS businesses that cater to enterprise SaaS, businesses with low price point, high volume of customers. Now, why does any company or any business owner do this? Why do they kind of break up the market into different niches? Because it's much easier to convert a customer when you speak their language or when you speak directly to them. For example, if he's trying to recruit people to SaaS Academy that have SaaS businesses in the health and fitness space, you could directly say, are you struggling with getting gyms to buy into your software? Has it been difficult for you to demo your software at a gym location? Whatever it may be, the point is that that person on the other side, the SaaS business that caters to gyms and to fitness businesses, they're saying, wow, this person knows exactly what I'm going through. They're speaking my language, they understand my pain. Point, I want to sign up for his program. So niching down really makes your marketing and sales so much easier. It makes it easier to convert. What it also does is that it allows you to be bigger than you actually are in, in that niche. The thing is that it's a small world when it comes to these smaller niches. Another example is the company Convertkit. It's an email marketing software. And when they first started, they just focused on mommy bloggers, moms that blogged. So when they started out, that was the first corner of the market they tried to go after. And what happened is because they just focus on that small niche quickly, in a matter of months, everybody in that mommy blogging space thought ConvertKit was like the biggest company in the world. Wow. Everybody's using ConvertKit. If you've been hearing about ConvertKit so much recently, they must be huge. I must be spending so much money on advertising. No, it's just that they focused on one niche. And because it's a smaller niche, people talk. People talk about their experiences, they share testimonials. The word gets around quickly. And in that bubble, people think convertkit is huge. But in the context of the entire email marketing space, Convertkit probably doesn't comprise even 1% of the market. But in the space of the mommy bloggers, they think they dominate the market. And that really creates a sense of strength in your branding. And then they moved on to authors, then they moved on to speakers, then they went on to musicians. The point is that, yes, their software can work for all different types of creators, but they focused on one niche at a time, and this allowed them to dominate each niche and focus your efforts and focus your marketing in that way. It's also a lot more cost effective to market to a specific niche because you don't need to cast a wide net. You can cast a smaller net and spend less on advertising, spend less on sponsorships. If you want to go to these events and have a booth, you know, the mommy Blocker convention, it's less crowded because you are not competing with your competitors at these niche events as well because they don't really have a presence. They're trying to take over the whole market. So even if you have a smaller market, it's worth starting somewhere. You have to start somewhere, right? So you might as well start with one niche with one corner of the market, build momentum, get your sales, be the number one provider or e commerce store in that niche, and then move on to the next one and the next one. It just allows you to have a systematic approach to taking over that big market you mentioned. Hey Fidelity, how can I remember to invest every month?

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To wrap up today's Q and a question from Mika. Yes, it can be tempting to be like, hey, I just want to take over the whole market one time. Just say I'm for everybody and my store is the place to be. But that's very vanilla and that doesn't really resonate with people with their specific needs or wants. It's much more organized. It's much more systematic to cater to each niche, to each part of that market. Even if that market is super small and there's only like four or five niches, go after one at a time. This allows you also to streamline your sales funnel or system, meaning you'll have a landing page for each niche. So you're speaking their language. You know exactly how many of each kind of customer is coming to you, what the cost per acquisition for each type of customer, which customer is the most cost effective. This allows you to really capitalize on understanding the value of each customer and how much it costs you to gain them or to acquire them. Mika I hope that helped in today's Q&A Wednesday's episode. If you a question you want to ask, don't forget you can email me at any time at omar100,mba.net and I'll make sure I'll answer it right here on Q and A Wednesday. Thank you so much for listening to the 100 MBA show. If you love what you hear, hit subscribe so you don't miss an episode. But before I go, I want to leave you with this. When you talk to everyone, you talk to no one, okay? It's very, very hard for you to resonate with a individual customer if you're just speaking in generalities. When you're just speaking in general terms, it's easier for you to speak their language and to talk directly to them and know who you're talking to. This makes your marketing, your sales, your whole business so much easier when you're just focusing on one niche. And remember, your website can include these different voices, these different niches, who you cater to. And then when you're actually actively marketing, running ads or doing events, you can have specific landing pages or specific pages that they can go to that speak directly to them. Thanks so much for listening to the $100 MBA show. That's it for me today guys, but I'll be back tomorrow. Where we get into how much should you be spending on paid marketing? How much of your budget? How much cash should you be spending on bringing in customers with paid advertising? We get into that in tomorrow's episode. Until then, take care.

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