Picking a niche

The word on the street is (and kind of always has been) that you MUST pick a niche or your business will fall into obscurity, and you will end up in the streets panhandling next to all the other poor saps who didn’t pick their niche.

(And all the while you’ll be begging for scraps, because one of your fellow panhandlers “niched down” his location to in front of the bus stop, thereby taking your best prospects before they even got to you. Oh, the humanity.)

This is a particularly frequent piece of advices for coaches. And it should be, because many coaches articulate their target market as “people who need my kind of coaching”, which is a little to broad to really get a foothold in the market. A little targeting never hurt anyone.

And while that’s one end of the spectrum, it can easily pendulum the other way, and then you’re a coach who helps 25 to 35 year old left handed women in transition in the greater Toronto area.

Ridiculous, yes.

Also not far off the mark for a lot of coaches wondering why they can’t fill their book.

But hope is not lost! Read on to learn how to make niche-related headaches go away for good.

Let’s take a minute and think about what “niche” really means anyway.

One of the dictionary definitions of niche is “a specialized market.” The idea is that the more you specialize, the easier it will be to find clients. If no one is trying to corner the market on those left-handed women in transition in Toronto, you’re about to be golden.

Maybe, maybe not.

“A specialized market” all by itself won’t necessarily make it easier to get clients. Just because Joe The Parenting Coach decides he’s going after “upscale parents of toddlers” doesn’t mean that the fact he picked that niche is going to guarantee any level of success.

It’s kind of like art. The Mona Lisa is a one of a kind, and that’s one of the reasons that it’s worth millions. But just because you paint something that’s one of a kind doesn’t mean you magically get points for that. There are a lot of other factors at play there. (One of which is that Leonardo Da Vinci is dead.)

Yes, picking a specialized market can help you on your fill-my-damn-book-already journey. But you have to pick that specialized market with the right end in mind if you want it to actually sway the odds in your favor.

Two things you need to consider before saying “this is the right niche for me.”

Let’s step away from what a niche IS, just for a moment, and think about what a niche is supposed to DO.

Basically, picking a niche serves two purposes:

First, a niche gives someone a specific reason to feel an affinity to you that they wouldn’t otherwise have. Think of this as the thing that a potential client thinks in terms of “people like me” or “people in my situation” rather than the rest of the masses.

You are currently reading this because your business is so small, you don’t even think of it as a “small business.” It’s itty. Not small. That’s why reading IttyBiz sounds like a better idea to you than Small Business Daily Tips. That site would appeal more to the owner of Bill’s Coffee Nook, with 8 employees and a very organized bookkeeper. (Bill, by the way, is sleeping with his bookkeeper. Shh. The wife doesn’t know.)

For a coaching practice, your target market or niche or whatever you want to call it is going to revolve around a certain type of person, or a certain type of problem, that you can put into actual words. Words that match up with the words that those people use in their heads.

Those words are the ones that make the person thinking “I want a coach” start thinking “I want THAT kind of coach.” So Joe is a bit on to something targeting upscale parents with toddlers, provided he’s solving problems that upscale parents tend to have. He’s halfway there.

Second, a niche gives someone a more concrete deliverable to consider buying. Coaching clients, for the record do not want coaching. No matter how many times they say it – to you, to themselves, or to their golden retriever – they do not want “coaching.”

All together now… NOBODY WANTS COACHING.

They want something very particular that the coaching will give them. They don’t call Joe because they want parenting coaching. Who the hell wants parenting coaching? Who has time for that crap?

They call Joe because they feel over their head on how to discipline a toddler. Or because they need help cultivating a budding prodigy. Or because they want some guidance on how to do the parenting thing when they and their partner have very different parenting philosophies.

There is a very specific thing, when it all comes down to it, that’s more or less your coaching superpower. This is the thing that generally should make it into your tagline.

It’s the core benefit that falls into “what the client is trading her money for”, and it should be clear and easy to understand. But the thing that the client is trading her money for cannot simply be “help.”

People don’t pay for help. They pay for a specific kind, flavor, or style of help. That’s your niche. Think of the medical / wellness field. Pain-free pediatric dentistry for scared kids. Physical therapy for athletes in high-impact sports. That kind of thing.

So the first part of your niche addresses who, within the masses of your target demographic, is the right kind of client for what you do. The second part of your niche is the kind of thing that your client is coming to you for.

The more specific you get, the more likely the specific kind of person who would like to access your specific superpower will say “That sounds like the thing I want to buy from that person.”

Here’s the part where you find out you don’t actually need a niche. Maybe.

Do you need a highly targeted niche to succeed?

Maybe yes, maybe no.

You can afford to be less specific with the market you serve if you are more specific with what you do for that market.

If you’re a behavioral therapist coachy type who helps kids with very serious anger issues, you don’t need to care so much about what kind of parents you’re targeting. If your specific service is “Keeping your kids from ending up in court one day”, that’s probably clear enough to carry you through.

You can be afford to be less specific with what you offer if you are more specific with who you offer it to.

At IttyBiz, I am a marketing consultant for, generally, single-person businesses. Yes, technically they are a small business. But they are TINY. And they think of themselves as tiny. They LIKE being tiny. It would never cross their mind to be anything OTHER than tiny. So I can be more general about my services, because I’m very specific about the market.

You can afford to be less specific with what you offer if you have brand strength on your side.

If you are a big brand, your niche is actually based around your reputation or what people already know about you. Target and Wal-Mart are huge. They can offer anything under the sun. Martha Stewart can make paints and drapes and cupcake tins and superhero Halloween costumes for your dog.

If you are a very big name in your industry, you can attract clients on name recognition and the qualities that recognition contains, so you can also offer anything under the sun (to a point).

Until you’re at that point, though, offering too many things that hit a wide spread can work against you. So you should probably consider targeting yourself a bit more.

Your homework for today.

Look at the part above about the two things your niche is supposed to be doing for you.

Think about if you’ve got those covered.

Also think about where you can afford to get looser with your niche and see if that applies to you.

Remember, people don’t want “help” and they don’t want “coaching.”

They want to know what they’re paying for, and know that they’re buying it from the kind of coach that’s right for them.

 

Further reading:

About the author: Naomi Dunford started IttyBiz in 2006. In her free time, she likes to… ha! Free time. You’re adorable. Learn more about her here and catch up with her on Twitter or Facebook.

email-list-size

While we’re getting the new coaches’ class ready to open up this week, we have another question for all you coaches out there. (Actually, this applies to everyone, so whether a coach or not, keep reading anyway.)

So! You have a list, are getting a list started, or sitting around thinking “Eeek! I really need to get a list going. And the thing you’re particularly wondering about is how many people you need to get on this list so you can make the money already.

The answer to that question is pretty simple, but it’s going to sound a little complicated. Let’s start from the beginning.

Before you know how big a list you need to have, you need to think about what you’re selling and who’s likely to buy it.

When you have stuff you want to sell, it’s not a stretch to say that not everyone on Earth is going to want it, or not everyone is going to want to buy it from you.

Some people are Starbucks people, some people are Dunkin Donuts people, and a lot of other people don’t like coffee at all.

If you have a big enough list – say, a billion people, you don’t have to worry about this fact. Send out your email, tell people to buy, and you’ll get all the money you need. You don’t need to think about your most likely buyers at all. Somewhere in those billion people, they’re hiding out.

So as ridiculous as it sounds, if you want an answer to this question but you don’t want to be bothered by thinking about who is on your list, then you’re going to need a list of a billion people.

Not having a list of a billion people, you’ve got to be a little more discerning.

Here’s what we mean by discerning: You’ve got to know what kind of person would have a higher-than-average likelihood of seriously thinking about buying the things you’re selling.

Once you know that – and know it in enough detail – you’ll have a better idea of how big a list you’ll need.

Here’s why this matters.

Let’s say you have a list of 10,000 people. That sounds good, right?

Maybe.

If you know that your most likely buyers are on that list – because something about your list filters them in some way – then you’re in very good standing.

But if you’re not doing any filtering (some people call it “pre-qualification”), you can’t ever know your chances that anyone on your list has any likelihood of buying in the first place.

So if your mailing list is built on the back of a signup box that says “Join my free newsletter,” your numbers are pretty much meaningless. 10,000 email addresses is better than 1,000, but we don’t have any grounds to say it’s ten times better. For all we know it may be 1% better.

So if you’re a coach who helps troubled relationships, and your signup box says “Join my newsletter”, your list size tells you nothing because you don’t know if they signed up because they want to fix their relationship or they signed up because they were intoxicated. (Yeah. Happens more often than you think.)

But if you are that relationship-fixing coach, and your signup box says “Join my newsletter for tips on how to stop fights from turning into break ups,” now you’ve got something. You’ve thought about your most likely buyer, who’s really afraid they’re going to break up or divorce if things don’t turn around speedy quick.

So people who are like “Ooh! I like warm and fuzzy relationship stuff” are less likely to sign up, and people who think “I need to get outside help on this” are more likely to sign up. Fewer of the unlikely buyers, and more of the likely buyers.

So make that one change, and you automatically need a smaller list. Keep it generic, and you’re going to need a bigger one.

Every filter you place on your list makes it easier to predict what kind of money you’ll make.

The money you get out of your list is directly linked to how and why people get on the list in the first place.

If they hand over their email address because your list hints at helping address the problems that they are willing to pay for, your chances of getting money out of them go way up.

Now, for those who have been waiting for some actual numbers …

If you want numbers, I can give you a few generalities.

It’s rare for a coach to have a full book with less than 1,000 people on a mailing list. I’ve never seen it in someone who had less than 500. (Caveats to follow.)

2,500 to 5,000 is good to shoot for to get a full book of clients. It’s not guaranteed by any stretch, but at least you’re in the range of “you have a solid chance.”

The Rule of Thumb exceptions:

If you have lots of offline contacts, or you network heavily on LinkedIn or forums or whatever, your clients are not coming from your list and this entire question is irrelevant for you.

If you gave something away for free on Facebook one time and saw a huge spike in subscribers but no commensurate spike in income, you’ve got bloat in your list and your target number needs to go up.

If you find you’re getting subscribers through well-targeted ads, or you get a lot of sharing of your emails, or you have a strong referral funnel from clients, your list is a little more pure and the target number can go down a bit.

Again, these are generalities, but it’s at least something to go on so you can manage your own expectations.

So how big does your list REALLY need to be?

Again, it all depends on these two things:

  • a) how likely a potential, true-to-God paying client would be to choose to get on your list in the first place, and
  • b) how much your filtering efforts make non-buyers not want to get on your list and muddy up the data.

Here are a few questions to help you figure out how big your list needs to be:

  • Does your list’s name or topic address the issues that paying customers want to know about (as opposed to interested-but-non-paying people)?
  • Do you regularly email your list with content that targets the issues worth paying to fix (as opposed to generic “on-topic” content that will appeal to non-buyers as well)?
  • Do you have a list incentive that covers some of the basic topics that a potential client would be talking to you about on an initial consultation?

Today’s homework:

Look at the coaching services or products you sell and ask yourself what would have to happen in someone’s life or business to drive them to take out their Visa card and pay for it. Not want it, not think it was a good thing, but seriously decide that they were going to buy it in the next 30 days.

Ask yourself what kind of people they are (as opposed to the people who don’t buy), and what kind of things they – as buyers, not readers – care about the most.

Then take a look at the questions above and see how many questions you can answer with “Yes.”

The fewer questions you can answer “yes” to, the larger your list needs to be.

 

Further reading:

About the author: Naomi Dunford started IttyBiz in 2006. In her free time, she likes to… ha! Free time. You’re adorable. Learn more about her here and catch up with her on Twitter or Facebook.

Which coaching model makes more money

As we get closer to the release of our upcoming just-for-coaches class, we have more questions in the proverbial mailbag to answer. (The two previous questions are here and here.)

Today’s question is the ever-common, “What will make me the most money as a coach?” question.

Mmm, money.

There are more than a few different business models out there for coaches, but it’s probably safe to say that they can be boiled down to four different ways of making money.

First, there’s the Big Group model.

In the Big Group Model, you’re looking to get as many butts in the seats as possible. Live butts, live seats. This typically happens by way of classes, teleseminars, or other things that could safely be categorized as “live programs that we want 100 or more people to buy.”

Sometimes these Big Group programs can be expensive, especially if they have some level of interactivity in them. (Think Q&A sessions, office hours, email support, or a certain number of coaching hours included.)

Sometimes they’re expensive, sometimes they’re not. If it’s over $1,000, though, it probably doesn’t fit in this category because most people can’t fill enough $1,000 seats to call it a big group. Usually with a lower price point comes lower (or no) interactivity, which everybody understands because it’s designed for the people who don’t want to pay for the bigger Platinum Mastermind Masterful Mastery program. You’ll generally get more people in this kind of program, because they can pay less.

If you can fill the seats – and that’s truly IF you can fill them – you can make this your only income stream, now and forever, and be just fine.

Then, there’s the Small Group model.

In the Small Group model, you’re looking to get fewer butts in the seats, mainly so there can be a much higher degree of interactivity. Coaches call this interactivity “intimacy”. A common range would be 5 to 25 people in a small group.

The advantages that come with a Small Group model is that you’ll probably be able to charge more per person than you would for Big Group, and it will be worth it to them because of the increased access they get to you.

In a Small Group, there’s a 100% chance that the coach will get to know the participants personally and, in some cases, tailor the program to fit their specific needs.

This is good for the participants for obvious reasons, and it’s good for the coach because the people who work with them in a Small Group setting are many times more likely to develop the kind of strong loyalty that leads to repeat business, private coaching, and a lot of referrals.

Small Group classes can also be easier to sell at times because you can niche it down to a specific audience and you only need to sell a few. If IttyBiz had a class called “How to run a coaching business while homeschooling a special needs kid,” it would probably be easier to find 25 buyers than it would to get more than 100. (Those 25 buyers would also pay more.)

What makes this model nice for coaches, other than the intimacy, is that you can target an underserved niche without getting as much competition – you’ll have cornered the market before too long, while everyone else will think that the “real” money is in Big Group classes or products.

Of course, there’s always the Products Model.

You can make a lot of money going the Products path, whether you’re selling physical products or downloadable ones.

Or, you can make no money at all.

It’s a common refrain that selling products is the path to easy money, and that trading hours for dollars is what stupid people do. But as The Dude in The Big Lebowski wisely said, “Yeah, well, you know, that’s just, like, your opinion, man.”

Yes, you can make a lot of money selling products. They are relatively easy to make. You can make them fast. With the right copy, they fly off the shelves, and you can sell them again and again while you sleep.

Which is exactly why it so easy for your competitors to do the exact same thing. Only they’re in Round Two, and can look at your products and make better ones.

Oh. Nobody seems to mention that part. But all is not lost! And we shall tell you why at the end of this post.

Finally, there’s the One-On-One Model.

Again, many people will tell you that trading hours for dollars is not what smart coaches do. Generally, they tell you this in $2,000 Big Group programs, so you’ve got to take that with a grain of salt.

If you are trying to go the Celebrity Million-Dollar Coach path, then yes, Big Group (mixed with high-priced products) is probably the way to go. But at that point you’re really a professional marketer who does coaching on the side, to one degree or another.

That doesn’t mean it’s wrong, it just means know what you’re getting into and decide if you’d rather spend the majority of your time marketing rather than coaching.

Here’s the thing about One-on-One coaching. You generally make less money per hour starting out and more money per hour as you get better at what you do and you get more established. (You also book more hours.)

You stay very close to the pulse of your clients and the market, which means you have an inside advantage for staying competitive, discovering emerging market trends and speaking in the language of your clients.

You also get a lot more experience, which means you are more prepared to create products (and Big Group classes, and Small Group classes) that stand above the competition. Your stuff tends get the reputation of being better than everyone else’s because, well, you talk to humans on a daily basis.

You also create an expanding base of strong referrals – and by “strong” we mean that people don’t tell their friends that you’re dreamy and they should read your blog – they tell people about the actual problems you solved for them. So as time goes on, you can spend less time on marketing.

Basically, you get a whole lot out of walking your talk. And while some people say you’re trading hours for dollars, you’re trading that time for a whole lot more than just your hourly rate.

So which coaching model makes the most money?

It depends. Anyone who gives you a blanket answer on this isn’t thinking about it for more than five seconds.

Here’s what I can tell you.

If you have a big list and you are better than average at marketing, you’re probably going to make the most money in Big Group. But you have to be very, very good at selling to people who will never know you personally and have probably seen your competition up close.

If you are better than average at solving a very specialized problem, and you can market competently, you probably stand to make the most money in the Small Group model. Pick an underserved market or target a relatively specific, underserved problem, and you’ll be able to command higher-than-average rates because what you’re doing is specialty.

(This assumes you’re solving a problem that people have the capability and willingness to pay for. That’s important)

You can also make a fair bit of money selling higher-than-average-priced products because your market is aware that no one else is creating products that serve their need. We’re not talking price-gouging here. In the real world, “How to Pick Tech Stocks in 2013” is going to be more expensive than “Stocks for Dummies.”

If you are very good at making products both rapidly and better than your competition, and you are better than average at marketing, you probably stand to make the most money in the Products model.

Essentially, this is like being an author and a marketer rather than a typical coach. For those who have schedule constraints that make having a regular practice hard to pull off, the right coach can make the most money with this model.

If you are better than average at coaching people one-on-one, and you can market competently, there’s a good possibility you will make the most money – over time – in the One-On-One Model.

Continue to get better at what you’re doing until your referral system gets you to the point where you don’t have to do as much marketing, and you’ll be in a strong position to command satisfying rates. You’ll also eventually be in a better space to run classes and make products, too. It’s a less sexy path, but it can open up more opportunities long-term than the other models.

Of course, that’s just my opinion. Your situation and goals are different, so your mileage may vary.

One caveat!

The list.

We will discuss this over the next couple of posts.

Your homework for today:

Think about this.

You’ve heard a lot of things from a lot of people about the best way to make the “real money.”

Each of these options comes with upsides and downsides that are determined by your experience, your capacity, your marketing skills and, most importantly, what the hell you want to do with your life.

Just for today, forget about what everyone has told you in the past.

And think about which path seems right for you.

Further reading:

About the author: Naomi Dunford started IttyBiz in 2006. In her free time, she likes to… ha! Free time. You’re adorable. Learn more about her here and catch up with her on Twitter or Facebook.