How Important is it to Declare a Niche for your Agency?

By Jason Swenk on February 12, 2020

Trying to decide whether your agency really needs to declare a niche? Can a generalist approach equate to more clients? In the marketing agency space, it’s all about standing out from the crowd. Whether you can find success as a generalist may depend more on your process than your expertise.

In this episode, we’ll cover:

  • #1 Thing to remember whether you’re a generalist agency or declare a niche.
  • 3 Ways to stand out as a generalist.
  • 3 Reasons you’re better off choosing a niche.

Today I had the opportunity to talk to Ted Birkhahn, president and part-owner of Hot Paper Lantern. Hot Paper Lantern is an integrative marketing communication agency that focuses on analytics, redefining how clients are targeting their audiences, and improve experiences. With over 19 years in the agency, Ted was able to take an existing customer base and turn it into a successful generalist agency. Find out whether it’s really possible to find success as an agency without choosing a niche.

#1 Thing to Remember Whether You’re a Generalist or a Niche Agency

If you have been in the agency world for any period of time, you know there’s one thing that holds true — nothing lasts forever. Ted says this is the number one thing he learned over the course of his career. As such, you always need to have a plan for when times get rough. What does this look like?

  • Evaluate your client base. It’s never a good idea to put all your focus in one area. As a generalist, don’t invest too much in a specific industry. As a niche agency, never saturate too much of your interest in one client or one area.
  • Grow in smart ways. As an agency owner, the goal is growth. But you have to do it right. If you grow too fast, you may have difficulty keeping up which can make you vulnerable in times of instability.

3 Ways to Stand Out as a Generalist

You’ve decided to be a generalist — great. The good news is, this means you have a wider reach, you can relate to a larger range of customers. The bad news is, there’s nothing to separate you from all the other “me too” agencies who don’t have a specific niche. So how do you stand out without having a niche?

  1. Don’t pretend to be all things to all people. Even as a generalist, there will be clients who just aren’t the right fit. Clients who require a niche level of expertise or have specific needs may not be right for you.
  2. Know what makes you different. For Hot Paper Lantern, they set themselves apart from the rest by bringing in specialists from different industries. By providing marketing and consulting services they provide value many similar agencies don’t. Even if you don’t have a specific area of expertise, you can still be unique.
  3. Leverage your experience. One thing Ted has that many agency owners don’t is experience. Ted has two decades in the agency world and has surrounded himself with a team of similar expertise. Experience is an asset. OWN IT.

3 Reasons You’re Better Off Choosing a Niche

It’s important to find out what makes your agency stand out from the crowd. Some agencies are able to do this without choosing a niche. But for many agencies, defining a niche is how they stand out. So how do you know if you’re better off choosing a niche?

  1. You don’t have an established client base. Ted was lucky. He started his agency with several established clients. This isn’t the case for most agency owners. If you don’t have an established customer base, you’re going to have to find a way to bring in clients. As a generalist, it’s going to be hard to stand out. When you niche down, you are able to dedicate your marketing toward a specific client base.
  2. You don’t have a lot of revenue. Even if you don’t have an established customer base, you can still stand out by bringing in resources or hiring great talent. Without appropriate funds, this will be very hard to do.
  3. You’re just starting out. This one goes with the two points above. If you are just starting out, you likely don’t have the client base or the revenue. Additionally, you haven’t quite figured out what makes you unique. For smaller agencies, it’s usually better to start out with a niche and expand later on if that’s what you want.

It’s hard to say you can’t find success as a generalist because it has been done and it continues to be done. But it takes a certain level of experience and expertise. If you’re going to be a generalist, it’s important to understand the extra level of investment and risk it entails. By setting realistic expectations, you’re more likely to make smart choices and find success.

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