The term “niche” refers to a narrow or specialized market, i.e. retail, industrial, medical office, land, etc. In a crowded marketplace, a niche serves a critical function by distinguishing you from your competitors. Having a niche is very important if you’re in a competitive environment like Los Angeles or New York City. The more commercial real estate agents there are to compete with, the more likely you need a niche to be profitable.
I know it’s scary. You’re likely thinking, “If I only focus on retail, I won’t be able to sell Mr. Harrow’s office building.” This is not true. Just because you’re making a decision to advertising services to a select niche, it doesn’t mean you have to turn down work. It’s too expensive to advertise to everyone in your area. It’s best to advertise certain services to the people that want those services.
1) Examine your current economy. How’s commercial real estate doing in your area? Is there an area that needs representation? Do a Google search for “industrial real estate <YOUR CITY>” and see how many pop up. Do one for “retail real estate <YOUR CITY>” or any other searches you can think of and write down the results. There may be a glaringly obvious need for a certain kind of real estate agent or one that focuses on an underserved market like downtown or brand new master planned area. Consider these gaps in the marketplace when deciding on your own niche.
2) Consider you current customer base. Who do you like working for? Do you hold your breath during calls to a certain customer because you can’t stand dealing with insurance agents looking for office space? Are you excited when you get a new shopping center to lease? Defining your market niche doesn’t have to be just about what’s most profitable; it should be about what you enjoy doing. If the industrial district creeps you out, perhaps you should focus on a different area.
3) Check out your competitors. If another agent is successfully immersed in a niche, attempting to go toe-to-toe as his clone will leave you penniless. It’s like when a successful restaurant publishes a cookbook of all their recipes – people ask “Aren’t you afraid someone will open a clone restaurant?” – it’s not that easy. A person that’s willing to clone another’s business is looking for a “get rich quick” scheme, he’s not in it for the long haul. Check out what your competitors are doing and only go toe-to-toe if they’re lacking in significant ways. It’s easy to overtake an under-performer, but cloning someone’s already successful business is never a profitable strategy.
4) Analyze what you can offer. Are you the best at running comparables? Do you offer high quality brochures? Are your online directories always up-to-date and looking great? Write down what you do best and what could use some polishing. Now take that list and think about what’s most important to your niche. A manager looking for new office space couldn’t care less about your brochure quality while a landlord with six vacant office suites will care quite a bit. Decide what you should work on to improve and what can be ignored as “not viable”.
5) Specifying your niche. Now that you’ve looked at your local economy, current customer base, your competition and analyzed your offerings you can finally start thinking about what to specialize in. The major niches are retail, office, medical office, industrial, multi-family, and land. You can further one of these niches by only offering services to buyers, sellers or leasers in a particular niche. Or you can cut your commute time and offer your niche services to one particular area of town. The more you specific your target market, the easier it is to advertise to those people. I.E. “I specialize in seller services to retail owners in Miami.”
Why should I specialize? Making yourself specialized will make you highly valuable to those people within that niche. Would you be reading my blog if my articles were about generic marketing tips? Not for very long. While a specialist in a certain niche can provide insights and be directly relatable to a particular target market. And I can’t stress this enough…specializing does not mean you have to turn down work in areas outside your specialty. People stray from their niche occasionally, so go ahead and sell that warehouse space even if you specialize in dentists looking for medical office.