Niche marketing is a marketing strategy that focuses on a segment of a larger market that can be defined by its own unique needs, preferences, or identity that differentiates it from the bigger crowd. So, for example, instead of building a website that sells all things auto parts, you could build one that sells tires and rims only; or instead of having one that sells watches, you could build one that sells only high-end ladies watches. You get the point.
The world of business has evolved over the years as technology has created new ways for marketers to reach their customers.
Marketing strategies have grown more sophisticated as well. Businesses are in search of the right customer for their products and services. Large companies spend hundreds of thousands of dollars each year developing new products and conducting market research.
Small businesses and online marketers also need to know where to market their products or services. With considerably less budget than a big corporation, successful marketing strategies can mean the difference between staying afloat and taking a nosedive.
One effective tool in the marketing arsenal is niche marketing. The principal strategies of this tool make niche marketing adaptable to the small business owner looking to turn a profit and the larger corporation that wants to increase their market share. Every customer is looking for something and the trick is to find out what that is and provide the product or service for them. Niche marketing is all about targeted marketing.
In this article we will discuss niche marketing and how you can win your marketing goals with it. You will learn about:
- What a niche market is
- Dos and don’ts of niche marketing
- Market and research
- How to make niche marketing work for you
What is a Niche Market?
Have you ever perused a store looking for something to solve a problem? It could have been a stubborn stain in your carpet or a bothersome cold. You know what you need but have a hard time finding it. Sometimes you simply wish someone would create exactly what you are looking for. You’d even invent it yourself if you could. That is where niche marketing can be of great help to the customer. What if someone were to provide what you needed at the time you need it, without having to wade through the entire store?
A niche market is a smaller group of individuals that have a specific need for a particular product or service that hasn’t been met. To take advantage of the opportunity to reach this specialized group of customers is the goal of niche marketing.
This group of individuals can be linked in many ways. How they are linked is the key to discovering a new niche market. The want of the product is not the only factor that defines a niche, but social class, race, economic level, background, gender, religion and social consciousness, to name a few.
Once you have found the customers, it is your job to provide a quality product or service to them. Meet their expectations and you will begin building a solid customer base. What any business wants are loyal customers who will stick with you through thick and thin.
Why do niche markets go untapped? Part of the reason has to do with perception. Niche markets are small and well defined. When most business owners think of “small” they envision shrinking profits and that is not the way they want to go. They want to cast their nets wide, so to speak.
But in the increasing world of specialized marketing, online nichification is golden, especially for small business owner with limited marketing budget.
Do’s and Don’ts of Niche Marketing
The concept of niche marketing is not hard to understand, but the implementation of it can hit some roadblocks. Just because the idea is a simple one doesn’t mean that you can go at it willy-nilly and have it work for you. Keep a few things in mind when that idea of a lifetime customer pops into your head.
Do’s:
- Take the time to do your homework. An idea is not ready to be road tested until you have the data to back up that the idea is sound. Your homework assignment is to determine your target market. You may have a great notion to sell small cup-sized blenders but who will buy them? Ask some questions; set up focus groups; post surveys on your website. A housewife with three kids will need something bigger than your blender. Travelers could benefit but you won’t know for sure until you do a bit of research.
- Conduct some test marketing. If you already have a website and products that you sell, offer this new product in limited release and see who buys it. Ask for feedback from the customer concerning what they liked and didn’t like about the item. This is acceptable as a way to further draw out that niche market.
- Look for niche markets within existing markets. Actually, this is a great place to start. You won’t have to reinvent the wheel, so to speak. If a bigger company is catering to mountain climbers of all types, there might be a market in your area for the recreational climber or young adults just getting into the climbing sport. Larger markets can mask opportunities for specialization into smaller areas of a business.
- Use your own experiences as a guide for developing niche market ideas. You are your best resource for new markets. Are you a single mom, married, divorced, working two jobs, have small children, teenage children, ethnic minority, LGBTQ? Anything that you see a need for due to a measurable trait can be used to target the sales of a product or service.
- Create a website. You will need a place to conduct your research and sell your products. Most websites can be set up to track several important data points to help you see if you are on the right track with your niche idea. The Internet is a great tool within itself. The cost of setting up a website is minimal, so your overhead is not as high as someone who sets up a brick and mortar business to showcase their niche market.
Don’ts:
- Resist putting the cart before the horse. Completely understand your target market before investing time or money into a product. Your idea could be a good one but not right for your area. Your idea must stand up against the changes in the market, fads and trends, and people’s changing demographics. The need of the product is based on certain traits but must be adaptable to survive unexpected changes.
- If you sit on your idea for too long, someone else will be reaping the rewards. Some ideas are timely. You get that feeling and are meant to move on it quickly. Putting it off could mean someone else who decided to be the early bird will exploit the niche and make tremendous profits. You want to get there first not second. New markets are emerging every day.
- Don’t limit yourself to the cyber marketplace. Some niches have international appeal as well as being useful locally. You can sell good ad copy to small businesses in your town as well as globally on the Internet. A niche is based on certain traits that lead to spending habits you can profit from. To that end, advertising on and offline can increase your sales.
How to Find Your Niche Market
Here we get down to the nitty-gritty. You have an idea of what a niche market is, but do you have a clear picture of how to find it? That is the million-dollar question. Keep reading and you will gain insight that will help you find as many niche markets as you have time for. They all might not lead to a pot of gold but useful information can be gleaned from a dud as well.
Market Research
Don’t be afraid to ask questions. The dumbest question is the one that never gets asked. If your website has a forum or blog attached, you can ask questions in your daily blog posts and evaluate the responses. People love to state their opinion of things and if you ask the right questions you will receive the right answers.
While you are at it, ask a few questions of yourself? You will have to sell this product that you believed in to a group of people you want to buy it. To do that, you must have an intimate knowledge of the product and what it can do for your customers. What market will the product satisfy? Is the product expensive or affordable? Do they need it or want it?
Use opt-ins to build niche lists. Ask visitors to register with your site. You can offer a discount or free item for doing so. Customers can leave the name and email address of family and friends in exchange for earning a referral fee.
There are several ways to gain this information without necessarily paying for it from a third party. Including a disclaimer statement about the use of the information will put visitors at ease. They won’t sign up if they are going to receive a boatload of SPAM in their Inbox every day.
Use the lists to separate potential customers into different markets. Depending on the target market for your idea, you will have someplace to start with your marketing campaign. Email marketing is more profitable when you know who is more likely to respond to your messages.
Keyword Research
For any product or service, people use search engines to compile the information for them. They type certain words, called keywords, into the search box and await the results. In the top right hand corner of the computer screen, the search engine lists how many results were returned. No one is going to wade through thousands of pages of results. They will look at the first two or three pages if you are lucky.
Discovering which keywords people are most likely to use has now become your job. There are keyword tools available on the Internet to assist you with this task. If you are selling lawnmowers, you want all possible combinations of keywords someone would use to find a lawnmower.
Some of these keywords will return millions of results. What you are looking for are keywords that have not been exploited by other lawnmower websites. Don’t just write down single keywords but also keyword phrases. It’s easier to rank well for phrases and they provide much more targeted traffic.
Long tail niche marketing is the use of longer three or four word phrases that can be used on your website to draw more traffic. People enter single words but just as many will use several words to narrow their search results. Matching these phrases can land you on the first page of the search results which is where you want to be.
Trial and Error – The Fun Begins
Now that you have polled your customers and found ways to zero in on your target market, it’s time to put your niche idea to the test. The first step here is setting up a website to advertise your product.
Resist showcasing more than one niche product on a website. Each product has a different target market. If you have two products for the same target group, it is acceptable to use one website. But, using one product in two different ways to appeal to more than one group will require more than one website.
Niche marketers have been known to set up mini sites. Each website is used to market to a different target audience. Weekend warriors might like a more active site to buy their mountain climbing gear. The items will be in the low to middle of the road price range.
For a higher class of clientele that are experienced mountain climbers, they will be looking for the best of the best at any price. Since they know what to buy, a more relaxed site might suit their tastes better. That’s why it’s so important to know your target and learn about your customers’ needs.
It was stated earlier in this article that all niches won’t be goldmines. Some will flop. Niche marketing is not an exact science but then neither is any other type of marketing. Doing your homework and using that knowledge to convince a group of people that they need your product is the way to increase sales. How many sales depend on the product and the audience.
If one niche doesn’t pan out, focus on the other ones that are doing well. When you have time, revisit the poorly performing niche and diagnose the problem. Maybe you need to cast the net just a little bit wider to find a more suitable audience for the product or service. Try to salvage the niche market before calling it quits.
Don’t be afraid to experiment with niche markets. The more you identify successfully, the greater your earning potential.
Winning with Niche Marketing
Now that you have identified your product and your target audience, you have to bring the two together. People can’t buy what you are selling if they don’t know where to find you.
Website content
Give your target audience a reason to return to your site. Interesting and engaging website content that answers common questions and explains the usefulness of your products will increase sales. Some niche marketers neglect content in favor of other strategies. But remember, your content must address specific needs and concerns of your particular niche target, not all-comers affairs.
And don’t forget to optimize webpage headlines.
Email campaign
Stay in contact with your customers. You don’t want a one-time only customer. With niche marketing, you are establishing a relationship with your customers. Staying in tune with their needs means communicating with them on a regular basis to be sure you are still getting it right. Loyal happy customers will recommend you to others.
Offer coupon discounts, contest giveaways, updates on new products you offer, and surveys to customers via their email. Autoresponder messages can be set up to send a certain message to your customer contacts at intervals to let them know you haven’t forgotten and appreciate their business. Email can also be used to send links to newsletters and other new features of your site as you add them.
Direct Sales
Niche marketing strategies can reach customers outside of the Internet. A niche business that operates on and offline still needs the same research done to produce a target market. You can buy lists of names according to pertinent demographic information obtained from your local Chamber of Commerce. Send out mailings to the people most likely to visit your store or website for your products. Even with direct sale mailings like this, you can still operate through your website to deliver the products to local customers.
Why Pursue a Niche Market?
Every product has a market. It may not be a big market but there is someone who will buy what you are offering. Niche marketing determines where those markets reside. Most advertising campaigns are drawn in broad strokes for greater appeal. With niche marketing, your advertising can be more focused and directed since you know that everyone in your audience will be interested in the product.
Everything you do has a customer in mind. The feel is more personal for the customer as if you are talking directly to them and know their needs. Every customer wants to be appreciated for their business and with niche marketing this is possible.
Fewer dollars are wasted to draw business in. If your target group doesn’t read the newspaper, there’s no reason to advertise there. If they don’t redeem online coupons, there’s no sense in wasting energy to create and send them. Use those extra dollars to offer added perks to your loyal customers. Also improve your website with varied media like podcasts and streaming video.
Niches offer hundreds of thousands of dollars in untapped market opportunity that goes unclaimed. This money could be in your pocket. Bigger corporations aren’t going to waste their manpower on smaller markets that want specialty items.
In business, everyone is clamoring for position. With a niche market, you can be the first and set the pace for others to follow. Besides, you are satisfying a need that others have failed to meet. You can feel good about that.
Parting Thoughts
Finding your niche in society is to find a place where you belong and can grow and thrive. To find a niche in business is to find a market that needs something you want to be able to provide. Niche marketing helps you to find smaller pictures within a larger one.
And, once you tap into a market, expand your business to increase profits. There is enough room to move around amongst niches that everyone can make some money.
