There was a time when I first started building the niche of our firm around creative designers and digital agencies. We got a few small clients and then those first creative clients began to refer other designers to our firm. Then we got a few larger agencies, and I had an official niche! I had heard niches were the way to go. “The riches are in the niches” as they say.

Back then, I wasn’t really sure why niches were the way to build a firm, but I did want to try it. As it started working, I began to experiment with positioning. Positioning refers to the place that a brand occupies in the minds of your customers and how it is distinguished from the services of competitors. In other words, positioning is a strong place you hold in the market that you have decided to serve. Experimenting with positioning has a lot to do with claiming expertise in that market, developing new services for that market, and putting these bold claims on your website. Strong positioning needs to always make its way to your website.

There was no rhyme or reason to the legacy base of clients, and they were typically using our firm for commodity services like filing tax returns and payroll forms. (Back then we manually filled out our 941s, printed them out and mailed the stapled checks to the IRS.)

What was I to do then? Of course, I fired all of the legacy clients to match the actual positioning and claims we were making on our website. Voila! But it didn’t go so well. I fired too many clients at one time and our cash flow took a major hit. We struggled to make payroll for a while because I hadn’t learned 5 simple rules of niching and positioning:

1. Niching is risky. Niching is narrowing and seeking to leverage a narrower part of a market is risky.
2. The skill of your marketing must increase as the broadness of your expertise decreases. This means you begin to apply the ‘broadness’ of your expertise to a smaller part of a market. And thus you have to get much better at marketing. 
3. Claiming a narrow expertise can begin as aspiration before it becomes actual reality. This means you can move slowly into your expert positioning as you build the reality of your claims over time.
4. You can’t niche too deeply, but you can niche too quickly. I shouldn’t have fired all of those clients all at once.
5. Niching is not magical; it takes work to begin and maintain. Positioning is the first step, then you have to grow your expertise so you can really deliver in service what you are claiming to the market.