How do you discover what your MSP’s perfect niche is?

That question won MSP owner Simon Lewis a £200 Amazon voucher last week.

It was one of several questions submitted to the IT Experts podcast 200th episode special. I appeared as the guest expert for a recording in front of a live audience, alongside host Ian Luckett.

And it's a great question.

The power of a niche or vertical can be summarised in three beautiful words: Pure marketing focus.

When you market to a specific niche, you can typically reach more people and have more influence, with less effort.

I’ve pulled this off four times now. I owned a niche healthcare marketing agency that worked with opticians, veterinarians and dentists. Three related verticals; although we did do different marketing to each vertical.

When I sold that business and started a new business in 2016, I knew I had to pick another vertical (I had a strict non-compete agreement). If I’d set myself up as a general marketing guy, I wouldn’t now have 700+ MSP Marketing Edge members all over the world.

Here's what gives you pure marketing focus

You can buy data for your vertical very easily. You’ll be targeting a small number of people with a message that seems more relevant to them (and relevance increases results).

In particular, if you can show them social proof (such as a testimonials video) featuring other people from within their vertical, that has extraordinary power. People are much more easily influenced by other people they can clearly see are just like them.

You’ll find closing the sale easier. Most B2B buying decisions are not made on price alone. Price is A factor, but not THE factor. Instead, buyers are looking for the right mix of factors in their IT support partner. One of those is the perceived quality of what you do.

And people perceive specialists to be of a higher quality. In fact, they expect to pay more for this.

Here's how to find your niche

Sometimes it’s really obvious what your vertical should be. Look at all of your clients, past and present:

• Do you have a cluster of them in a specific vertical?
• Do you enjoy working with clients in that vertical?

If yes, then your decision is made!

You can leverage the existing clients into invaluable social proof to attract new clients from that vertical.

If it’s not that simple, then go back to your client list, and ask yourself “who would I like more of?”. You only need one good client in a target vertical to produce social proof.

Typically when MSPs ask this question, they want businesses:

• That are regulated so they’re motivated to invest in data security
• Where IT is mission critical
• With fairly standard setups (i.e. not manufacturing where the critical $10m machine is controlled by a Windows XP machine running bespoke software, that's not been rebooted for ten years)

This is why CPAs (accountants), lawyers and financial services are often picked as verticals.

Nothing wrong with you picking one of those, so long as you accept there’s more competition there, compared to other verticals.

On the whole, though, there is less competition within verticals than there is for general business.