By: Andrew Neitlich

October 27th, 2003

Reader Rating: 9

Most Web designers define their target market as either:

1. "Small to mid-sized businesses"

   Or:

2. "People who can be reached through word of mouth from clients and colleagues"

Both these “target markets” cost Web designers revenue, time and money. This article explains why. Then, it shows how to focus on a specific target market to increase revenue, cut marketing costs, and make business development easier and more effective.

Why Small to Mid-Sized Businesses Are Not a Target Market

First, “small to mid-sized businesses” are not a target market. There are about 14 million small to mid-sized businesses in the United States alone. Even in a small metropolitan area, there can be tens of thousands of businesses. Web designers who claim to focus on serving this market are not focused at all. Instead, they face the following obstacles:

1. Their business development efforts are scattered and expensive. The more general the market, the more difficult and expensive it is to reach the people it contains.

2. Their positioning in the market is weak. Prospects perceive these providers as “just another Web designer” instead of “Web designers who understand my unique needs, problems, and language.”

3. They have to bid on projects in competitive situations in order to get work. Generalists have to bid. Specialists establish themselves as experts in a focused niche, become recognized in that niche, and continually have more clients calling to offer them sole source deals.

4. The solutions they provide are less effective than would be more focused solutions produced by specialists. Why? Because solutions produced by a generalist do not address the deep needs of a specific type of business.

5. Competitors who do focus on a specific industry can beat these Web designers, because their solutions are targeted, they understand their client’s needs deeply, and they have a base of referrals from opinion leaders in that industry.

Why People You Can Reach Through Word of Mouth from Clients and Colleagues is Not a Target Market

“People you can reach through word of mouth from clients and colleagues” is not a target market, nor is it a very powerful marketing strategy. Web designers who focus on their network may make a living, but they won’t achieve the revenue they deserve. There are two reasons why:

1. “Word of mouth” depends on the good will of others, and is a passive approach to business development. Most of your clients and colleagues are too busy with their own problems to constantly think about spreading the word about your Web design business. It is much more powerful to focus on a target market, and create proactive referral and business development systems that attract prospects to you.

2. Most relationship networks spread across a range of industries. This raises the issues faced by Web designers who claim to focus on small and mid-sized businesses.

The Alternative ...And Its Benefits

The alternative is to focus on a very specific target market -- especially a focused industry. There are hundreds of potential industries, as a quick look in your local Yellow Pages will show. Some of the most successful Web designers I know have built their business by focusing on one of the following markets: auto dealerships, mortgage brokers, realtors, dental practices, small hospitals, accounting firms, or pool and spa dealers.

Take a quick look in your Yellow Pages now, just to see the possibilities. For instance, I count 100 different industries under “A” alone.

Focusing on the right target market can deliver some terrific rewards:

1. Your business development costs decrease. It’s much easier to reach people in a focused niche. They read the same trade magazines, visit the same Websites, and go to the same association meetings and conventions.

2. Word about you will spread much more quickly. People in focused industries talk to each other, as do the professionals who serve them. You’ll be amazed how quickly word about you can spread if you focus. Word travels much faster here than in a personal network.

3. You can develop a deep solution that solves your market’s specific problems, and you will win more projects as a result. Rather than providing generic Websites, you can develop a tailored solution that goes beyond what any generalist has, or can, provide. Why? Because you understand the unique needs of your market.

4. You can charge higher fees. People in a target market -- for instance, lawyers -- will pay more for “the Web designer who has worked with over 25 law firms” than they will for “the Web designer who works for small businesses.”

5. Prospects call you first, before they put a project out to tender. If you become a recognized expert in your niche, more prospects will hire you without sending their project out to bid.
   
   
6. You can develop a national business, even with a local presence. By focusing on a niche audience, you can market through national publications that target your industry. This kind of recognition will cause even more people in your niche to seek you out.

7. You feel better about your work, because you become a recognized, credible expert in your target market.

8. You can always move to another target market later, and repeat your success in another niche.

The Dilemma: Why Web Designers Refuse to Focus

The benefits of focusing on a niche are compelling, yet many Web designers won’t focus their business on a specific industry. There are three reasons why:

1. It is comforting to have 14 million prospects, even if that means you win fewer projects. The irony of focus is that if you narrow your target market, you get more clients than you would if you remained scattered. You give up the illusion of having nearly unlimited prospects, and gain more clients in exchange. To me, that seems like an excellent reason to focus, but many Web designers aren’t willing to take the leap.

2. Some Web designers enjoy the challenge and variety of taking on projects from any source. As a group, IT professionals love to show that they can handle any project that comes their way. That’s a choice you have to make. As one of my mentors used to ask me, “Would you rather be smart, or successful?”

3. Focusing takes some upfront work and investment. It takes some time to research a target market and become visible to the people in it. Developing business in a target market requires more than going to the occasional chamber of commerce meeting or signing up with online bidding sites. Many Web designers aren’t up to this challenge. They would prefer to continue to market to a seemingly unlimited market, or rely on word of mouth. The problem with this choice is that business development within a target industry becomes much easier after a little work up front. Web designers who invest the time at the beginning find that their business development efforts actually decrease after about six months.

How to Select a Target Market

If you do decide to focus, here are some rules for choosing your target market:

• It should be large enough that you can make a living by getting business from a small percentage of the people in your market. For instance, in the county where I live, there are 10,000 realtors, and 100 new realtors get their licenses here every month. I could make a great living designing Websites for only a fraction of these people -- even before I consider going national.
• You should have a compelling story to tell. It helps a lot if you have worked in that industry, have already designed sites for people in that industry, or have some other angle that will encourage people in the niche to trust you.
• You must be able to reach the target market. The whole point of focusing is that it enables you to reach your market more easily. Check to be sure that your chosen industry has trade associations, trade magazines, Websites, and meetings. Confirm that you can buy or rent a list of decision makers in that industry from a local list broker.
• Make sure that competition hasn’t already saturated the industry. When you go through the Yellow Pages, you’ll find plenty of industries that could use a competent Web designer focused on their unique needs. However, be sure that there aren’t already too many competitors in the niche – give yourself the best chance at being a market leader in your chosen market. Check out the trade magazines to see how many competitors already advertise or write articles targeted to the niche.
• The decision makers have money to spend. Why not choose an industry in which the decision makers can afford to invest in a quality Web presence?

How To Dominate Your Target Market

Once you choose a target market, your entire business development strategy changes. It must revolve around establishing your credibility and trust within your niche. There are a number of strategies you can use to achieve this goal:

1. Develop a Web presence that speaks to the specific needs of your target market.

2. Create informational products (e.g. articles and white papers) that educate your target market about how they can improve results with an effective Web presence.

3. Write articles and press releases targeted to the media that your niche use.

4. Speak at industry trade shows and meetings.

5. Offer an online newsletter that shows your target market how they can increase revenues with an effective Web presence.

6. Build a proactive referral system that lands you introductions to your target market.

7. Create a database of prospects, and follow up with them with additional articles and information about the solutions you provide, not in a way that sells your services, but in a way that educates them with valuable information and insights.

8. Collect testimonials and case studies from opinion leaders in your niche.

9. Use competitive bidding sites, but only bid on projects that come from people in your niche market. You will bid on fewer projects, and win more of them.

Conclusion

Many Web designers won’t listen to the advice to focus, because they’re afraid to take the plunge. That presents an excellent opportunity for the rest of you to choose a target market and dominate it. What you might give up in variety you will gain in additional revenue, higher fees, fewer competitive bids, and the satisfaction of offering a deeper, more successful solution to your clients.