3 ways service based businesses can specialize

Published by Nela Dunato on in Business, Marketing

You need a niche, haven’t you heard?

Just kidding, I don’t think that you absolutely always need a niche. But there are certain circumstances when actually doing less, not doing more, is the solution to your problem of finding clients.

In this article I describe 3 ways you can specialize in your service business, as well as the “next level” niche process if your market is already too saturated with professionals offering similar services.

3 ways service based businesses can specialize

Why the need for specialization?

If you’re one of the few providers of a given service in a geographic area and you have a steady demand, there is no need to specialize.

If you’re serving a small market, by targeting too small a niche to get enough demand you might specialize yourself out of business! That’s why many businesses fail: they assume there will be a demand for their niche service in their area (contemporary barber shop, vegan cake shop, upscale pet groomer, etc.), but there just isn’t enough to make it sustainable.

However, if your market is saturated by competitors, and you can tell you’re losing clients to other (perhaps cheaper) businesses, you need to stand out in a meaningful way.

While it may seem counterintuitive that aiming for a smaller market segment would bring in more business, it actually works because it gives you an edge over generalist competitors

If your ideal client is choosing between a generalist and a specialist, the specialist seems more reliable. The specialist has more portfolio samples or references that are relevant to the client, which means more proof that they’re the right person for the job. Credibility rises through the roof, as this is a sign of high expertise.

People also remember and recommend specialists more than they do generalists. I’ve found that since I have claimed my specialization in branding for service-based businesses, my colleagues and other contacts reach out to me whenever there is a project or a speaking engagement that would fit well with my niche.

There are different ways to define your niche:

  1. Scope of services (what)
  2. Industry sector (who)
  3. Worldview (why)

Let’s examine each one, and how this can help you get more clients.

1. Specializing in a scope of services

Figuring out the “what” is pretty straightforward:

  1. List all the services you are currently offering.
  2. Circle the ones that are the most profitable and most enjoyable for you.
  3. Figure out the narrowest possible scope of service that could still drive enough demand to keep your business sustainable.

Examples we’d get from such an exercise include:

  • Hand-lettered logos (and only logos)
  • Sales funnel copywriting
  • WooCommerce websites
  • Non-fiction book launch strategist
  • Food photographer, etc.

The scope in these examples varies, since there may be services that just don’t make sense to offer in a smaller package, because it wouldn’t be useful to enough people.

You don’t have to quit offering all the other services right away.

You can experiment with an offer and see how people respond to it. Create a separate landing page for a niche service, send out a newsletter with the link, and promote it a bit over social media. Write a few articles about the benefits this service can bring to your clients. Include any relevant testimonials and references. Think about investing in some pay-per-click advertising.

If it flops, it may be too narrow, or the market is just not ready for it yet. Good thing you didn’t burn down the rest of your business!

If it takes off so well that it becomes a dominant income stream, consider discontinuing other services to leave more room for developing and marketing this offer. Perhaps it can even allow you to train others to help you so you can serve more people.

How does this type of specialization help?

  • You can honestly claim that you’re one of the few (perhaps the only person) who has worked on “over X projects” of this exact type.
  • All of your portfolio samples and references are relevant to the prospective client.
  • If your clients have friends and colleagues who need the same service, referrals will start flowing in so fast you’ll get a waiting list.
  • Marketing and selling is easier because your offering is clear and easy to understand. Just spell out what the client will get and for how much. If this is exactly what they need, they will buy it.

2. Specializing in an industry sector

Usually people specialize in a sector that they have a strong personal interest in, or previous career experience that gives them insider info that generalists don’t have. 

If you’ve already completed several projects in a certain industry and find it particularly interesting, you can choose to outwardly promote yourself as a specialist in that niche.

The width of the focus depends on what makes sense for the service, and for the market you’re in. Examples include:

  • Florist for luxury weddings
  • Digital marketing for medical providers
  • Graphic design for beverage brands
  • Editing services for memoir writers
  • Interior design for boutique hotels, etc.

To claim your industry niche:

  • Simply add “for [industry X]” in the title of your services page (and wherever you reference your services).
  • Tailor your scope of services and client experience so that it matches up perfectly with the needs of that sector.
  • Start introducing yourself as a [job title] for [industry clients] in your social media profiles, official bio, when you meet people in person, etc.

If you have enough portfolio samples and references from this industry (and perhaps very closely related industries), you might want to remove all the others that are not in this niche. If that sounds too extreme, remove all but your favorite and best projects. That way you’ll display some range, but not outnumber the most relevant work samples.

If there are other businesses specialized in the same industry, consider whether there is enough demand for more. Some industries are currently booming, so there’s plenty of clients to keep all niche service providers busy. But at a certain point this might fizzle out, and unless you stand out as the expert in this field, you may be forced to switch to a different specialty to stay afloat.

How does this type of specialization help?

  • Your services are tailored to your ideal clients, so they get a greater value than they would from generic services.
  • Selling is easier: you are the most logical choice for any client in this industry, and they know you understand their specific needs.
  • Content marketing is simpler because you can write effective case studies, and use real-world examples that your readers are familiar with.
  • You’ll learn the industry jargon, so you can use targeted keywords to bring more search traffic.
  • Networking is more effective: just show up at relevant industry events.
  • You might be able to pitch stories, interviews, and speaking engagements to industry publications and events.

3. Specializing based on a worldview

The “why” is the deeper reason behind what you’re doing, which is often shared by our ideal clients. It’s a combination of your core values, your ethical principles, and is likely informed by your personal history.

You can highlight your values and principles in the following ways:

  • Describe your ideal clients (who your service is for) by using these terms, so they recognize themselves in this description.
  • Highlight them on your about page.
  • Write a manifesto.
  • Publish articles, videos, or podcasts explaining how your ethics informs your business practices.
  • Donate a portion of your profits to a related cause.
  • Volunteer your time/services to a related cause.

I’m not confident that this method of niching can be used entirely on its own, but it becomes very useful in combination with the other two methods, which I’ll get to in a minute. I believe that if we want to actually change something about our industry for the better, we need to focus on the practicalities and spell them out for our clients through concrete examples.

It’s easy to say that we’re standing up for transparency, diversity, sustainability, and all the other buzzwords du jour—we need to be able to demonstrate it. I’ve seen many, many business owners claim to be all about ethics and values, and then fall on their face. Don’t commit to any values and principles that you’re not ready to live by.

How does this type of specialization help?

  • Your clients are confident that you understand their motivations and are personally invested in their success.
  • You’re more likely to form emotional bonds with your clients, which leads to higher loyalty and repeat business.
  • Your clients are more likely to refer their friends and acquaintances that share your worldview, even if they are in other industries.

Combining multiple specializations into a super-focused niche

If you choose one of the ways to niche and find that your market is still over-saturated, it’s time for level two: Combine two types of specializations, and you instantly have a much narrower niche.

Venn diagram of different combinations of service business niches

Your niche formula can sound like:

Specialized service (what) for industry clients (who).

Specialized service (what) for people with a shared worldview (why).

Service for industry clients (who) with a shared worldview (why).

Combine all three types of specialization, and you have the most laser-focused niche you can imagine:

Specialized service (what) for industry clients (who) with a shared worldview (why).

You can play with this and come up with a number of combinations. Pick one that seems like the most fun and engaging to you, while of course having a high potential for profitability.

If you have years of experience, you’ll find multiple opportunities to specialize.

In my early career, I designed probably more than 20 vacation rental booking websites. I could have specialized in that scope of services and industry, and I know some colleagues who did. But I wanted to get away from that niche because I got bored with it.

Over time I organically developed a specialization in branding for consulting businesses. This is still quite wide, but I live in a very tiny country where few designers specialize at all.

If I was confident that I’d be able to make a living doing it, I could specialize in branding for non-profit organizations. I have lots of experience, and find it highly rewarding. But since very few non-profits can afford to hire me at my full price, I usually either volunteer, or charge a heavily discounted rate.

If you can’t find any opportunities, maybe it’s too early to specialize.

I think it’s good to spend some time as a generalist! You get to learn what you like, and where your particular skills make the biggest impact. Over time you’ll notice which projects you’re most drawn to.

Am I ever allowed to expand?

There’s no rule that you can’t. But be careful not to saw off the branch you’re sitting on, or you might push away your most loyal clients and supporters.

Typically small businesses start off with a niche (or pivot from a generalist to a niche) and if there’s enough demand, they’ll quickly grow their income and their reputation among their target audience. By then, people outside of their niche take notice. If this happens to you, you need to decide what you want to do, and what the trade-offs are:

  • Want to switch to a different specialty? You’ll probably lose a big chunk of your audience and most of your clients. Or, you might keep getting referred clients from the previous specialty, even if you’re no longer actively marketing it. Be sure that you have a plan on how to get more target clients.
  • Want to add on another branch in a different specialty? You’ll likely need to double your marketing efforts, and will perhaps confuse your existing audience.
  • Want to expand your specialty to cover a wider area? If you’re already so well established that you don’t need a tight specialist edge, it could work well.

There are also other ways to get the impression of narrow and deep expertise without having to sacrifice breadth. Blair Enns highlighted them in his article: Ten Legit Ways to Cheat at Your Positioning.

Do you specialize?

Feel free to share in the comments what your specialty is, and why you decided on it.

Or if you’re still unsure about it, let me know what you’re considering, and what is stopping you from moving forward.

Nela
Nela Dunato

About Nela Dunato

Artist, brand designer, teacher, and writer. Author of the book “The Human Centered Brand”. Owner of a boutique branding & design consultancy that helps experienced service-based businesses impress their dream clients.

On this blog I write about art, design, creativity, business, productivity and marketing, and share my creative process and tips. Read more about me...

Some blog articles contain affiliate links to products on Amazon. I’ll get paid a few cents if you buy something using my link, and there’s no extra charge to you.


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