How to pick a niche for your agency, and when to narrow it

How do you pick a niche for your agency?

Pick the group you already serve well, then keep narrowing it until few other agencies serve that same group. One approach is to build one part of an agency at a time, in order, and pick the niche before anything else.

Your client list already holds the answer. Work through it like this:

1. List your clients from the last year or two. Include the ones who left, since they tell you something too.
2. Mark the clients you'd want more of. Think about the work you enjoyed, the clients who paid on time and the results you could show.
3. Look for what the marked clients share. It might be an industry, a size of business, a kind of buyer or a problem they all brought you.
4. Name the group in one plain line. For example, "dental offices with more than one location" or "home service firms that sell to homeowners."
5. Check that you can reach them. Ask yourself where these owners meet, what they read and who they already trust.

Write the line down and keep it where you'll see it each time a new lead comes in. A clear group can make later choices easier, from the words on your website to the events you go to.

Once you know who you serve, the next job is to say it in a way that makes you the clear pick. For the line that sets you apart, see how to set your agency positioning.

How does marketing agency niche identification work?

Marketing agency niche identification works by testing your pick on real leads before you rebuild your marketing around it. You make a guess about the group, then let the next stretch of leads tell you if the guess holds up.

Here's one way to run the test:

1. Write down the group and the one problem you fix for it.
2. Check each new lead against the group, and mark it as a fit or not a fit.
3. Note which leads turn into clients, and how long the sales talk took.
4. Ask the clients who fit what made them pick you, and save their exact words.
5. After a set time, look at your marks. If the fits close more easily, keep the niche. If they don't, go back to your client list and look again.

A niche can still feel too wide once you've picked it. Common signs it's time to narrow it include:

• Many other agencies pitch the same group with the same offer.
• Leads in the group ask for work you don't do.
• Your message has to stay vague so it covers everyone in the group.
• The clients in it each want something different from you.

How narrow to go depends on where your agency is right now. For the order to follow, stage by stage, see What order do I build in, from niche to team?

A niche also changes where you look for new work. For adding client channels in order, see getting more clients for a marketing agency.

Which digital marketing agency niches can you choose from?

You can define a niche by industry, by kind of client, by the service you sell or by the problem you fix. Each way gives you a different group, and you can join two of them to narrow further.

Common ways to define a niche include:

• By industry. One field, such as law firms, dentists or roofers.
• By kind of client. A type of business, such as firms with one office, or shops that sell online.
• By service. One kind of work you're known for, such as email marketing or search.
• By the problem you fix. One result clients want, such as more booked calls or fewer missed leads.

Then turn the group into a short profile of the client you want most. Note what they do, their size and which problem they'd pay you to solve. Keep it short enough that you can check a lead against it in a minute.

Before you choose, ask these questions about each group on your list:

• Do you already have clients in this group, and results you can show them?
• Can you reach these businesses through people you know or places they gather?
• Do they have a problem they'll pay to fix month after month?
• Will you still want to do this work in a few years?
• Are there few enough agencies serving them that you'd stand out?

There's no single right niche. The right pick is a group you can reach and serve well, with room to stand out.