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Should Your Business Use Niche Software?

Updated Oct 26, 2023

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When we evaluate software, we consider common use cases, ideal feature sets, ease of implementation, customization options and design. However, competing alongside multi-use CRMs, CMSs, document management systems and e-commerce products are specialized solutions designed with a narrower user-set in mind.

Examples of industry specific solutions include products such as ReThinkCRM, a real estate CRM specifically for commercial brokers; Vinsight, a business software specifically for wineries; mycase, an all in one management solution for law firms; and a bevy of ERPs for everything from food and beverage purveyors to manufacturing companies to design firms. While the starting costs for industry specific solutions vary widely according to feature set and business focus (Enterprise vs. SMB), they generally tend to be more expensive than their broad-use counterparts.

So, when are those niche software products the right fit for your business? We reached out to analysts, business owners and longtime SaaS users to get their take on industry specific solutions, general-use SaaS products, and the best way to approach making an informed buying decision.

Industry Solutions Come with Industry Features

One reason many business owners cited for choosing industry specific solutions was keeping up with the competition. Many SMB users believe that their biggest competitors already use industry products, and that passing on such solutions in favor of one-size-fits-all software may cost them sales in the long run. Indeed, industry specific products do bring features to the table that general software doesn’t.

Built with Specific Users in Mind

Stephen Babcock, a lawyer and founding partner at Babcock Partners, believes industry specific software adds value not only in terms of keeping up with the competition, but because of the way it’s created.

“Industry specific software allows you to benefit from many other businesses such as yours who have had input into the coding of the software,” Babcock told Business News Daily. “Software coders are software coders. When they are writing software for a specific industry they almost always seek extensive input from people in the field for updates and functionality.”

Babcock brings up a good point. When general software solutions are designed, they’re created with the most popular use cases in mind, and some industries may have to do substantial customizations to make out of the box solutions work for them. It’s no wonder that many businesses, like Babcock’s law firm, opt for industry specific solutions like Needles, a legal case management software, which he says offers them features that generic software can’t match.

Sonia Parekh of Parekh Partners LLC agreed with Babcock’s position on niche software. Parekh has used dozens of software solutions for big-name retail clients such as Neiman Marcus, Kohl’s, The Gap and Nike, and she believes retail-specific is the way to go. She noted that even though certain business tasks sound similar across industries, they can vary greatly and therefore benefit from custom solutions.

Parekh used financial planning as an example: Every company needs to build a financial plan that shows how their products or services will make money, she said. But that planning process varies significantly, because the target customer, inventory management approach and profit margin structure are different for the products across industries.

“As a result, if you are selling software to support ‘planning,’ it had better be specific to an industry or it simply won’t work,” Parekh said.

Streamlined Designs and Industry-Savvy Customer Service

In addition to honing the product to meet a specific type of user’s needs, industry specific solutions often have fewer overall settings and options, allowing for a streamlined design that’s less overwhelming. Having a limited set of features and settings can make the implementation process faster, and it can even improve the user experience.

Evan Roberts, a real estate agent and owner of Baltimore’s Dependable Homebuyers, favors real estate specific tools for both their ease of use and customer service. He noted that generalized software products are often quite powerful and have advanced features aimed at supporting professionals across a number of industries.

“The reason I opt out of these more powerful systems and choose real estate specific tools is that they offer a minimal feature set and have customer support representatives who are trained specifically to work with real estate agents,” Roberts said.

Roberts wasn’t the only SMB owner who mentioned customer support as a reason for choosing industry specific software. Several entrepreneurs in real estate, law and retail echoed his sentiments. After all, it’s easier to work with customer service reps and sales staff who understand processes that are unique to a certain industry. Unsurprisingly, business users we spoke to in fields with specific security and compliance needs were uniformly in favor of industry solutions for both the customer service and feature set.

Mark Anderson, principal at managed IT services firm Anderson Technologies, says his businesses use lots of tech tools, including industry specific software like IT Glue. Since IT Glue was created as an information repository for tech companies it has built-in features that Anderson’s company needs.

“The managed IT services industry revolves around processes and systems,” he explained. “IT Glue not only expedites those processes by ensuring information is always close at hand, but also keeps every member of our team accountable and on the same page.”

Hands-on access to security was a concern for Anderson as well. While general business products tend to streamline security settings by simplifying options, systems like IT Glue give their tech savvy users the ability more access.

“Because cyber security is a major focus of our work, it is important that every tool we implement or recommend is secure,” Anderson said. “IT Glue was built for security. Clients and managed service providers can designate granular access to information, and every login to the IT Glue dashboard is augmented by multi-factor authentication (MFA) on a secondary device.”

Of course, while this is ideal for Anderson’s team of tech pros, who require access to advanced security features, such options would be confusing, overwhelming and irrelevant to many business users. Not every industry has highly specific requirements or complex processes, and as such not every business needs niche software.

General SaaS Products are Affordable, Reliable, Easy to Integrate

There are some major benefits to choosing general SaaS products instead of industry focused software. In fact, many small business owners we reached out to were proponents of general solutions specifically because they’d had negative experiences with niche products. Many users cited costs as a reason for switching to larger products – general software solutions tend to be more affordable than those focused on a single industry.

Other SMB owners we talked to rightly pointed out that many (but certainly not all) industry-focused products are geared toward enterprise clients rather than small businesses. Additionally, opting for smaller niche products can mean relying on smaller teams that are still hammering out their own processes and aims, which can result in chaos and frustration on the user end.

Mark Aselstine, the founder and owner of subscription wine club Uncorked Ventures, has been through the ringer with small niche software products, and he’s vowed to never use one again. The first wine-specific product he used had major issues with security. His company’s information was compromised, and service was briefly down during a vital sales time.

The second wine-related software Aselstine’s company adopted had fewer usability issues, he says, but it was difficult to customize, and a specialized programmer was required (which ran Aselstine as much as $250 an hour) for basic website updates.

So, what does Aselstine use now?

“I’m on WordPress and WooCommerce like everyone else,” he said. “It’s secure. I can add pretty much anything I need by myself, and it’s incredibly easy to get stuff fixed if it goes wrong.”

In addition to having more robust customer service, general products tend to have larger user bases, which often translates into more learning resources and online support. For example, an estimated 75 million websites are powered by WordPress, that’s a lot of users and use cases. It is unlikely that any SMB will have a WordPress scenario or problem that is new or unique. When dealing with niche software companies, especially smaller companies or those just moving out of the startup phase, the likelihood of encountering something that no one has ever dealt with is significantly higher, and so are bugs.

A lot of frustrated business users, especially those who had adopted marketing and advertising software, don’t like the inability of their niche products to integrate with third-party systems or with each other. Some users we spoke to were juggling data input across as many as three or four systems just to maintain consistent records, because the tools they adopted weren’t compatible. This isn’t a complaint we heard from users of more general SaaS products. Big name CRMs, ERPs and CMSs are more likely to be part of a larger business product ecosystem, and they tend to be built for compatibility with third-party software and extensions

Finally, general solutions are increasingly offering industry specific features, which makes it easier for small businesses to get the benefits of specialized industry software with the convenience of an affordable, widely used product. Business-specific templates are already the norm in content management systems, app creation tools and e-commerce software, and many software solutions offer optional add-ons and extensions that allow users to customize the product to meet their unique needs. As large products continue to grow their user base they will likely continue to offer more themed features, optional add-ons and customizations to suit the needs of specific industries.

How to Make an Informed Buying Decision

There are compelling arguments on both sides of the business software aisle, and many SMBs opt for a combination of industry specific software and general business tools. When it comes to how to make your software-buying decisions, the response from our panel of industry experts and analysts was unanimous: think about your needs first and don’t get sidetracked by features you don’t need.

Overwhelmed by the choices out there? Cathy Reisenwitz, a CRM Analyst from Capterra, said the first thing shoppers should realize is that there is no best CRM, or best software solution period, because “every business has their own unique needs.”

“One business might live or die by their calendar, but rarely need to store documents in their CRM. Another might need social media integration but not need territory management,” she added.

In fact, Reisenwitz thinks businesses would be better off prioritizing based on daily operations and requirements than industry.

“I’d guess that for most businesses, their industry doesn’t determine their CRM needs,” she said. “The size of the team, the location of the team, the management structure, whether you have engineers on hand to make changes or will need to rely on the vendor’s support team, how tech-savvy your sales reps are, and your sales strategy will [likely] have a bigger impact on the necessary features and setup than your industry.”

[If you are part of a new company, read our guide for help choosing the best crm for startups ]

Tony Mariotti, a former software executive and current business owner and realtor, echoed Reisenwitz’s advice: “One the best ways to determine if industry-specific software will make a difference to your business is to first create a list of ‘must have’ features […] I find that I can get away with general CRM for my real estate business, without having to pay a premium for software created for, and targeted to, my industry.”

Above all else, both Mariotti and Reisenwitz recommend business shoppers do their homework before signing a contract.

Mona Bushnell
Staff Writer at
Mona Bushnell is a Philadelphia-based staff writer for and Business News Daily. She has a B.A. in writing, literature, and publishing from Emerson College and has previously worked as an IT technician, a copywriter, a software administrator, a scheduling manager, and an editorial writer. Mona began freelance writing full time in 2014 and joined the Business News Daily/ team in 2017. She covers business and technology.
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