Should You Niche Your Coworking Space?
If you’ve spent any amount of time on this website, you’ll know that I believe in differentiation. In my mind, it’s the only way to stand out in a competitive market.
But how far should we take the idea of niching, especially when it comes to coworking spaces?
Will it limit your business potential or enhance your marketability?
In this article, we’ll talk about some of the pros and cons of niching your workspace. We’ll look at why you should be thinking about focusing on at least some portion of the market instead of “everybody”.
Together, we’ll discuss some key areas to consider before making the move into a more niched position.
The Benefits of Having a Niche for Your Coworking Space
When done correctly, niching your business puts you in a class of your own. You essentially make people choose between you and a sea of other more generalized options.
Here are the top 6 benefits to consider when niching your workspace.
1. It makes your workspace more attractive
When you create a niche value proposition to a smaller segment of the market, your messaging and content are more relevant to those people. Relevance gets people’s attention. You speak their language, allowing you to build trust and interest in less time.
By having a niche, your marketing materials become focused on the most important features and benefits that you offer. You tailor your message to the unique needs and wants of a smaller market segment, instead of watering yourself down by trying to appeal to everyone.
When you niche down, you’ll still attract people slightly outside of your target market, so don’t be too worried about leaving people out who would otherwise join.
But remember, you can’t please all people, so in order for there to be insiders, there needs to be outsiders, too.
2. You offer a better service
Since you’re focusing on a core group of people, you spend time understanding your market segment intimately; you know their wants and needs better than the competition, and you’ve built them into your services.
You become an expert on making your best members satisfied. You create all kinds of value-added solutions as part of your membership. Life is better for those people than if you tried to be all things to all people.
Niching makes pleasing your ideal members a cinch.
3. Marketing is easier
By picking a niche, you actually know who you’re trying to target. It is easier to find out where they hang out online (and offline).
You can target your online ads better, and since your content is also tailored to them, they will find you organically as well. They see your content on social media and you show up in search engine results. They click on your links because they’re the most relevant.
Slowly, your competition starts to fall to the wayside in the minds of your ideal members.
4. It shortens the sales cycle
Your target member’s decision-making process is easier and faster when you have a more focused value proposition. It’s like buying a shoe tailored specifically to your unique lifestyle. It becomes that shoe, or one of the more generic products on the rack. Which one are you most likely to choose?
People often make decisions because “people like me buy/do/believe things like this”. It’s part of who we are. As humans we are tribal and want to be around people “like us”. You need to create that tribe by creating insiders and outsiders.
5. You get to command slightly higher rates
You have the best combination of features and services compared to the more generalized competitors. Your community is more tightly knit with like-minded people. You’ve built a tribe, which is worth more to your members. You’re no longer a commodity service.
Ask yourself, who gets paid more, the family doctor or the specialist? Who charges more for monthly memberships, the massive gym for everyone or the cross-fit gym? The list goes on.
6. People stay members for longer
As all the pieces fall into place, people want to stick around. You’ve created a community of people with a common thread. You’ve taken a position in the market and decided to serve those people relentlessly. You have focused on making your member experience amazing for that group of people, making them less likely to want to go somewhere else.
Would an avid cross-fit member easily switch to a standard gym down the street? Not likely.
Is Niching Right for Every Coworking Space?
If you are considering a niche for your coworking space, you may need to consider the following drawbacks or limitations.
1. Your members may be “too homogenous”
Serving a niche target market means you get a lot of a similar type of people in your community. While likeness is good, you don’t always want all your members to be in near-identical businesses or levels of development. You may not want all freelancers, or all tech startups, or all artists, or all consultants, for example. Or maybe you do – but it’s something to consider.
Mixing with different kinds of people can make for a more diverse experience in which members can tap into each other’s varying skills and resources. You want a cross-pollination while maintaining a close-knit group.
2. Your market size might be too small
Getting too niche with your market positioning might mean that too many people are dissuaded by joining.
It’s important to know approximately how big your target market is before deciding to focus on them. It is best to research the audience size in your local area and to give yourself ample wiggle room (but not too much). Workspaces in bigger cities can afford to be more specialized since there is a larger audience.
3. You might not do it right the first time
Narrow positioning (niching) involves an intimate understanding of your target members and their needs. If you don’t have a lot of history to work with, you might be spending your time focusing on the wrong people or services in the beginning.
The best way to know what to offer and for whom is to start a little bit broader, then narrow down your positioning over time.
Figure out who your best members are (happiest, stays longest, best-served, etc.) and interview them. Find out why they like your coworking space over the other options. Find out what features they like the best and why they stayed with you over time.
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