For your company to be successful, you need to identify your target market. Some businesses cast a wide net. And because of this, they end up with a horizontal market doesn’t focus on a particular industry or niche. And then there are vertical markets. These are basically the opposite, and refer to the markets of businesses who cater to a niche. This means that their products and services are uniquely designed to meet the needs of a very specific audience.
Meeting The Needs Of Vertical Markets
One of the advantages of an c-commerce business is lower overhead costs. This allows such companies to cater to niche markets. While their customer base may be small, their reach is wide – and potentially global – and their overhead is low enough to make a niche market profitable.
Consider an online store that sells sporting goods of all kinds. They have a horizontal market; their focus is wide, and they seek to attract people from all walks of life with an interest in ay kind of sport.
Conversely, a store that only sells racquetballs, racquets, and equipment for this sport has a vertical market. They only cater to people who play this specific kind of sport, and cannot help customers with other interests.
Vertical Markets Lead To Vertical Solutions
Identifying vertical markets makes it easier to find a target audience for your products or services. After all, if your customers know that you specialize in addressing their specific needs, they’re likely to purchase from you. Moreover, if you deliver a good customer experience, there’s a high chance of sustained customer loyalty and referrals.
It may seem counter intuitive, but defining vertical markets can actually make it easier to grow your business. After all, you know your market, and can deliver exactly what they need. This extends to advertising. You can create a unified messaging that can be transmitted across media types to reach your market. The same is true for forecasting and budgeting; knowing what your customers need and want can help you prepare for any season. With your energy focused in one direction, you can perfect the service or product that you offer.
Focusing on a niche market allows for specialization, which typically reduces competition. If you are the only one offering a particular product that your customers need, you can charge a higher price and the market can support that higher price.
Let’s Grow Your Business Together
At Fusion CPA, we want to help you grow your business. We do this by offering tax planning, financial advisory, and bookkeeping services to small and medium-sized enterprises. Let us help you identify your niche market and then create a financial plan that is focused on growth. If you need assistance tackling finance-related challenges, schedule a Discovery Call with one of our CPAs.
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