Chip Royce, Flywheel Advisors
Telling a CEO to shrink their target market is a great way to get weird looks. It’s also the secret to finally ditching the price wars and becoming the only choice for your best customers.
You’ve noticed the feature-selling trap in your business.
Now, you might wonder, “What’s next?”
The answer is straightforward, but not easy: stop selling to everyone.
For many founders of growing B2B tech companies, this advice seems off. You’ve built a product with broad appeal, and narrowing your focus might feel risky. This concern is valid, but it may be misplaced.
Think about it: In the crowded B2B tech space, trying to please everyone makes you forgettable. A niche GTM strategy doesn’t cast a wider net; you become a big fish in a small, profitable pond.
A Big Fish in a Small Pond: The Power of a Vertical Market Strategy
Selling in horizontal markets, where you target every industry, is challenging. You risk becoming just another option. Your solution blends in, and competing on price becomes the norm.
A vertical market strategy changes the game. By focusing on a specific industry, you become a crucial partner instead of a generic vendor. For instance, I worked with a logistics software company that struggled with pricing. They were just one of many. By focusing on cold-chain logistics for pharmaceuticals, they became the top solution for a major issue.
True market leadership comes from depth, not breadth. It’s about solving specific issues for a particular group so well that you become their only option. Achieving this changes everything.
Three Pillars of Niche Profitability: Increase Pricing Power and More
What does this shift mean? Your success relies on three pillars that deliver real results.
1. A Niche GTM Strategy Unlocks Your True Pricing Power
The biggest advantage of a niche GTM strategy is increased pricing power. When you’re the go-to solution for an industry’s main issue, you escape the price war.
The sales conversation shifts. Instead of “How much does it cost?” prospects ask, “What’s the ROI?” I saw this with a manufacturing client who gained 20% efficiency, translating to $2 million in saved labor costs. They weren’t just selling software; they offered a $2 million solution.
This approach isn’t about random price hikes. It’s about earning the right to charge more because your solution is a strategic investment with clear returns.
2. A Niche GTM Strategy Drives Marketing Efficiency and Reduces Customer Acquisition Costs
A hidden cost of a horizontal strategy is the waste of marketing funds. Selling to everyone means advertising everywhere. Your message gets diluted, and customer acquisition costs (CAC) soar. You spend a lot reaching people who won’t buy.
When you dominate a niche, your focus sharpens. You know your customer inside and out. You understand what they read, where they go, and which online groups they join. Your marketing becomes precise.
You create content that speaks to their challenges. You sponsor key industry conferences instead of many generic trade shows. This focus lowers your CAC and quickly attracts better leads.
3. A Niche GTM Strategy Creates Clear Product Roadmap Clarity
The feature-selling trap creates a messy product roadmap. You react to random requests from various customers. You end up with a Swiss Army knife of tools, but none are top-notch.
A niche GTM strategy brings clarity. You stop building random features and start addressing the deep needs of your ideal customer. Your product development becomes proactive. You can invest in complex, industry-specific workflows that competitors can’t justify. This focused approach creates a better, more distinct solution.
A focused strategy leads to a virtuous cycle. A more valuable product makes you indispensable to your niche. This strengthens your pricing power and solidifies your market position.
The Benefits of Dominating a Niche Market
Imagine a sales call where your team confidently states your price. They know how your solution delivers a 10x ROI for the specific problem.
Picture your marketing team, sure that every dollar spent reaches a qualified buyer. Envision your product team, focused on their work, building a product tailored to its market and setting the industry standard.
That’s the power of owning a vertical. That’s what a focused niche GTM strategy offers.
Your First Step to Dominating a Niche
The journey from a horizontal product to a vertical solution is significant, but starts with one step: identifying the right niche. The benefits of dominating a niche market are vast, but you must choose wisely.
Feeling stuck with commodity pricing? A niche GTM strategy can help you dominate a vertical, lower customer acquisition costs, and command premium pricing.
If you want to find your most profitable niche, I’ve created a free 5-day email course to guide you. Sign up today and take the first step.
Whenever you’re ready, there are 3 ways we can help:
1) Schedule 25 minutes to chat about your businesses: new opportunities, current challenges, aspirations, pretty much anything!
2) Sign up (if you haven’t already) for this newsletter.
3) Read back issues for more insights into how to (re)ignite growth for your company.