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Finding Our Niche: Developing target markets The Story of Red Sage, Chapter 4


When I first wrote my business plan in 2006, finding a target market was a big piece of my plan. I knew that specializing in an industry would make sales and marketing more efficient as efforts could be very tightly focused on reaching that single audience and would allow me to develop specialized services and/or products to serve that market and further differentiate Red Sage as an expert. I had no idea which industry I wanted to specialize in but I developed criteria that would help me stay focused on looking for opportunities to help me identify this market.

My criteria for finding a target market

The four criteria for identifying a target market that I listed in my business plan were:

  • The industry would be identified from my list of early customers so I could leverage experience from one customer into many customers.
  • The industry could not be a highly competitive industry. In other words, my customer wouldn’t care if I worked for others in their industry.
  • Potential customers in that industry would need all of our services, not just one, and would be able to afford our services.
  • The industry needed a strong association structure allowing me to easily reach and market to potential customers.

At the end of my first two years in business, I had narrowed the list of potential target industries down to three.

Narrowing down the list of potential target markets

The first potential industry was the equipment rental industry. We had built a website for Americ Equipment Rental in Hartselle, Alabama. Since equipment rental is very geographic based (typically people prefer to rent from a business in their town), I could easily sell our services in surrounding towns and branch out. There was a strong association structure that I could use to focus marketing. Ultimately though, equipment rental businesses only really needed website development, not our other services, and they were labor-intensive sites with a large number of elements that were hard to produce and keep affordable.

The second industry I looked at was United Way organizations after building a website for United Way of Morgan County, Alabama. This was definitely a non-competitive industry and our client was actively promoting us to other United Way organizations that tended to meet together regularly. However, I quickly learned that United Way organizations preferred working with marketing companies in their county, and really couldn’t afford our services.

The final industry I looked at was the economic development industry after building a website for Morgan County Economic Development Association in 2007. I learned that there was an association that would allow me to reach economic developers across North Alabama and attended the North Alabama Industrial Development Association (NAIDA) conference in late 2007. At this conference I not only picked up another local EDA group, the Lawrence County Industrial Development Board, but also met the executive director of the Economic Development Association of Alabama (EDAA) who also ended up hiring us for their website which gave us tremendous visibility across Alabama.

Finding the perfect target market

Ultimately, I had stumbled on every business owner’s dream; I had found a target market that had not been identified by my competitors. I started exhibiting at the NAIDA conference and the two EDAA conferences annually and our business in this industry quickly grew with every conference and word of mouth promotion of our services by our economic development clients.

Today, we have grown this base to include economic development groups in over half the counties across Alabama, several in Tennessee, and as far away as Dodge City, Kansas. By working with economic developers, we have also added many Chambers of Commerce, visitor bureaus, downtown groups, workforce development groups, cities and counties, making us one of the Southeast’s largest and most experienced community marketing agencies. Our work for this niche market includes everything from website development, to graphic design, and community branding. It makes up a significant part of our client base.

Establishing additional target markets

Over time, we have established the healthcare industry as another key target market. We now work with five hospitals and a number of physician practices in North Alabama providing a wide range of services.

Today, we have three core markets: small business, economic development, and healthcare, providing a diversified client base that has made our marketing and sales efforts efficient and effective. Additionally, this diversified base of clients has made us less vulnerable to negative trends in the economy or a specific industry helping us maintain sustainable, consistent growth, even during the significant economic downturn and the Great Recession in 2009 and the years that followed.

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