How To Determine A Niche For Your Company, with Erik J. Olson

Erik J. Olson (00:02):
How to determine a niche for your business

What’s happening. I am Erik J. Olson. I got asked this question on Instagram today. Follow me there @erik.j.olson. That’s E R I K dot J dot O L S O N. So the question was, how do I determine a niche for my business? So niching is really important. There’s a saying in business that the riches are in the niches and what that means is as you continue to specialize your company, you can often make a lot more money. So a lot of companies, they start off very broad and very general. We did exactly that here to Array Digital. Now we niched in locality. We worked with local businesses. We didn’t know at the time that was a niche, but we just started working with anybody. And it was people that were in our network or that kind of bumped into our network for one reason or another.

Erik J. Olson (01:02):
So we weren’t exactly niche except for geographically. And again, we weren’t even sophisticated enough to be aware that that was a niche, but, but it, but it is, it’s a niche. But we worked with any kind of client whatsoever and we would basically take any kind of work that we could until we realized from doing a lot of studying and talking to other agency owners and whatnot and studying business that we really needed to be in a niche. We didn’t know what niche we needed to be in. So after talking about it, literally for years, we started to look at our existing roster of clients. And we had a general idea that we did better with one kind of client versus another, but it was a different kind of industries. Well, after doing some analysis and a little, a lot of discussion, frankly, we realized that we did best with three kinds of clients, doctors, lawyers, and home services companies in particular, HVAC companies.

Erik J. Olson (01:59):
And once we identify that and after a little more sole searching and a lot more discussion, we decided that we were going to only focus on those three kinds of clients and started saying no to other kinds of clients, because there’s other kinds of clients we just didn’t do as good of a job with them, for whatever reason. So the way that we found our niche was we started to work with a lot of clients. And then we picked the ones where we just naturally worked the best with. Now we could have done a good job with them for various reasons, but, but there was a pattern for sure. The pattern was we did best with doctor’s offices, medical offices in particular law firm offices, and with HVAC contractors. So when we decided to take this, niching a little bit further, what we did was we spun off a new agency called Rival Digital to focus exclusively on HVAC contractors. And they’ve done very well. They’re

Erik J. Olson (02:58):
Going crack 2 million. They’re gonna crack $1 million, $1 million in revenue in the first two years of existence. And then Array Digital has been focusing a lot on law firm marketing. And we spun off another brand called Array Law, which is @arraylaw.com. And that focuses exclusively on law firms. Now the original agency Array Digital, we still have a lot of non HVAC and non-law firm clients. But the new clients that we get are all law firms at Array Digital and, and HVAC is over at Rival Digital. So that has been our experience with niching. We did not start off with the concept of niching. I think it would be fantastic if you are thinking of starting a business and you have identified a niche that you could service that niche, but for us, it just was not obvious. And we had to go through years of soul searching until we identified it.