5 tips on how to grow a small business in a niche industry

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Women in apron holding an open sign up at a store front window.

As a small business owner in a unique or highly specialized industry, you know how difficult it can be to market your business effectively and grow your customer base. 

Whether you’re running a business that offers doggy clean-up services, selling products specifically for left-handed folks, or creating sword and fencing classes for kids, you know you’ve got a great product or service that improves people’s lives. 

The challenge: Small business owners like you often face a disconnect when it comes to marketing their products and services to attract new customers. 

To grow a small business in a niche industry, you must:

  • Understand your target market
  • Figure out how to communicate with them better
  • Go above and beyond to engage your business in the local community. 

So, here are a few strategies to help you grow your business in a niche space:

  1. Get to know your target audience
  2. Highlight the value of your offer
  3. Use technology to its full potential
  4. Take a multichannel marketing approach 
  5. Get involved in community efforts 

One example of how to grow a business in a niche industry is Revelation Pets. By leveraging their experience in niche pet care, they were able to facilitate the creation of a high-end doggy spa and even help start a specialty dog grooming business

The good news is that the tactics Revelation Pets used can be easily translated to help any small business, not just those in the pet industry. The key to implementing them is to stay flexible and adapt each tip to your specific situation.

So, now let’s get into “the how” of growing a small business!

How to grow a small business in a niche space

1. Understand your target audience

The first step to grow your small business is to know who you’re selling to. Then, you can figure out how to gain and retain their support. 

You also want to focus on getting long term customers as they’re more profitable. In fact, repeat customers spend 67% more than new ones and contribute to the highest percentage of your revenue. 

Let’s consider an example. Say you own and operate a doggy resort and daycare business called the Pampered Pooch Emporium and you have the only pet swimming pool in town. 

You know your target market consists of dog owners, but plenty of people own dogs and never use a doggy resort service once, let alone one with a full swimming pool.

You need to figure out which members of your overall target audience will be interested in your services, and how you can help them understand the value of your small business. To start you should create customer profiles to define your target audience more specifically.

By creating profiles based on the characteristics of your current customers and the prospective customers you’re hoping to reach, you’ll be able to figure out what matters most to them and adjust your marketing strategy accordingly.

If you use a CRM solution, this will be a great place to find the characteristics your current customers have in common! 

For example, a few customer profiles for your doggy resort could be:

  • Brenda, a 50-year-old lawyer with a demanding career. She’s often away on business throughout the week and needs a place for her two dogs to spend the day when she’s gone. She values your doggy resort for its convenient location and flexible packages that allow her dogs to spend up to a week or more in your care if needed.
  • Tom, a 25-year-old first-time pet owner with a younger dog. He doesn’t have a ton of dog-training experience, so he values the extra obedience services offered by your resort that give his pup structure and an outlet for his dog’s energy during swim time in the pool. 
  • Jessica, a 30-year-old teacher with two kids and an older dog. Her dog has shown a few health problems, such as chronic arthritis. She values your business for the therapeutic swimming services it provides to her family’s beloved aging pet. 

You want to create profiles that apply to your own business and account for the different products and services you have available. This exercise will help you understand your target market on a deeper level by putting yourself in their shoes to figure out how your niche product improves their lives. 

2. Highlight the value of your offer

Next, you must effectively communicate what your business offers your target audience. For some businesses, customers can easily figure out what you’re selling and why — if you run a store that sells only left-hand-oriented products, for instance, it’s clear your customer base is left-handed people. 

However, it may not be so obvious for other niche businesses. For instance, sticking with the doggy resort example, many dog owners who use the services of pet resorts are unfamiliar with the benefits of a doggy swimming pool.

Along with analyzing your customer profiles, you can reach out to your current customer base for assistance in this process.

Send out a survey to current customers asking a few questions, such as:

  • What influenced your decision to choose our business over competitors? 
  • What aspects of our business do you value the most (convenience, affordability, the fact that we’re the only provider in town, etc.)?
  • What platforms do you prefer to use to get updates from our business? 

These questions can help identify what your customers appreciate most about your business, as well as their preferred communication channels.

The survey answers will also provide you with valuable insights on your customers such as the fact that they:

  • Prefer social media over email
  • Value your business for its convenience 

You can then incorporate this data into your marketing strategy to clearly demonstrate the unique value of your offerings.

To better market your business and illustrate your value to potential customers, you should also request testimonials from your current customers. Ask customers who’ve had a great experience with your business to send in a brief review with a few photos that demonstrate your business’s impact. 

You can then share these reviews on your website and social media pages to demonstrate your business’ success to prospective new customers. 

3. Utilize technology to its full potential

Growing your small business in today’s world is all but impossible without the assistance of technology. Without a streamlined process for managing your business’s finances and databases, it’s easy to lose track of important files or documents.

Without a dedicated software system, you’re left having to upload data manually, wasting valuable time that could better be spent figuring out how to grow your small business or to get new customers. 

Therefore, you must use a full set of tech tools. Your chosen solutions should include the software essentials mentioned on this page like the ability to:

Specific software options to look into for your small business include:

  • Accounting tools like QuickBooks or Xero to handle finances.
  • Digital communication platforms to stay in touch with your team of employees as well as your customers.
  • Marketing software that helps you convert leads into new clients. 
  • A customer relationship management (CRM) system to help manage leads and increase your customer retention rate.

Your business software should also be able to integrate with the tools you love for a seamless data connection.

Better yet, software integrations save you plenty of time and hassle as integrated software solutions are known to increase sales productivity by 12%. 

4. Take a multichannel marketing approach

Since your business is in a niche industry, you have extra considerations for marketing your products and services that other businesses don’t have. Your customers, for instance, will probably already be familiar with the main premise of your business but need more information on the unique offerings and aspects of your niche industry. 

For example, if your small business offers field service solutions like lawn care and landscaping services, you have to consider how to position yourself in the lawn care market. And if your niche is designing and planting tropical landscaping elements, you need to make it clear to your customers why palm trees or bird-of-paradise plants are best for their yard. 

This is where multichannel marketing comes in. According to AccuData’s digital marketing resource, a multichannel marketing approach is most effective because you can increase the number of touchpoints you have with your audience and build awareness of your unique offerings.

As a niche business, you may have a wider range of customer demographics, as demonstrated in the doggy resort example above. 

A multichannel approach can help you reach audience members where they are and tailor your messaging to different segments of your audience. For example, younger members of your audience may be drawn to flashy social media videos, while older demographics might prefer simpler email communications. 

To account for these varying preferences, market your services across digital platforms such as:

  • Your social media pages. Share product information, customer testimonials, user-generated content, and any promotions you have going on. 
  • Your email newsletter. Since customers may not be as familiar with your niche industry — share information directly with them via your email newsletter. 
  • Your website. Design your website with search engine optimization (SEO) tactics in mind to push your content to the top of search engine results pages. Include keywords that align with your products or services within your internal web pages to boost your pages’ rankings in search results and introduce your offerings to a wider audience. 

Take a balanced approach by coupling paid marketing tactics such as paid social media ads and Google Ads with free marketing avenues like organic social media posts and internal blog posts on your website.

This way, you can combine your organic marketing efforts with more targeted paid advertisements for a well-rounded digital marketing approach. 

5. Get involved in community efforts

Lastly, you can grow your small business within a specialized industry by getting involved in community events and programs that allow you to introduce your business to a wider audience and position yourself as a community supporter.

Two easy ways to get involved in your community are through annual events and corporate social responsibility programs.

Annual events

By participating in annual community events such as holiday markets or events like Small Business Saturday, you can introduce your niche products and services to the community and get more people interested in what you have to offer. 

Corporate social responsibility

Additionally, consider creating a corporate social responsibility program within your business to generate a stronger relationship with your community. You can even get involved with a local nonprofit organization with a similar mission to your small business. 

Through these activities, you’ll not only do some good in the community but also gain access to prospective new customers.

You can check out Double the Donation’s corporate social responsibility guide to learn why consumers are more likely to work with or buy from companies that focus on improving their social impact. 

Both of these ideas introduce a larger community to the specialized offerings of your niche business, allowing you to:

  • Foster stronger relationships
  • Grow your customer base

Recap: How to grow a small business in a niche industry

  1. Focus on getting to know your target audience and engaging them on a more personal level to grow your small business.
  2. Do some market research to find out why your customers love you and highlight these points in your sales strategy.
  3. Empower your team and workflows with technology that works the way you do.
  4. Multiple marketing touchpoints across channels will help you win more customers.
  5. Engage with your niche audience at community events and through charitable work.

As we’ve already seen, small businesses have had to adapt drastically to account for COVID-safe business practices, so it’s important to have a solid marketing strategy in place to guide you when unexpected challenges like this arise. Good luck!

Looking for more on how to grow a small business? Check out this free ebook for additional strategies!

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