Are you a budding entrepreneur or a small business owner looking for a fresh idea to take the market by storm?
If you’re considering turning your passion into your livelihood, the first thing you’ll need to do is figure out where you fit in the modern consumer landscape. To do that, you’ll need to know exactly who your audience is.
It might seem like a good idea to put your eggs in multiple baskets to attract a generic audience, contrary to the popular saying. However, if you’re a small business it’s a good idea to narrow the scope and focus on a specific target audience. Members of that audience are what’s referred to as a “niche market”.
In this article, we’re sharing five easy steps to help you find your niche market.
What is a niche market?
A niche market is a segment of a wider audience a business chooses to focus and target its efforts towards. Members of a niche market have their own set of needs and preferences to which businesses can tailor their products or services to.
Instead of selling to a generic audience, niche marketing allows you to stand out with tailored solutions aimed at solving specific problems or addressing specific needs.
A simple example of a niche market is a brand like Beyond Skin offering cruelty-free, vegan shoes. The footwear market is extremely broad. Everyone needs a pair of shoes on their feet, after all! By appealing to conscious consumers, Beyond Skin has outlined a niche area of interest (vegan shoes) that consumers seek out.
As consumers become increasingly conscious of their decisions and the wider impact they have on the environment and society, niche markets that cater to these needs are sprouting up everywhere, offering all kinds of solutions from cruelty-free cosmetics to reusable drinking straws to plastic-free food storage wrap made from beeswax.
How do niche markets work?
When it comes to establishing a niche market, research is key.
Before you dive right into marketing your products to a niche audience, you’ll need to get an understanding of the market. Are there brands out there already doing what you want to do? What gaps in the market haven’t been filled? Is there a reason they haven’t been filled (i.e. they’re not profitable)?
To truly capitalize on your target niche, you’ll need to ensure consumers are accessible, there’s substantial room for growth, and there aren’t any dominant competitors doing exactly what you want to do.
There are many ways to define a niche, some of the most common ways are based on:
- Values and beliefs
- Geography
- Interests and hobbies
- Budget
- Quality
- Income
Benefits of niche marketing
One of the most obvious benefits of niche marketing is that it allows you to differentiate yourself as a brand. By establishing your brand’s position in a niche market, you build yourself as an authority figure and can leverage that position by targeting a specific audience aligned with your products and services.
Appealing to a niche market allows you to target an audience who are looking for exactly what you have to offer, which makes them more likely to convert and remain loyal customers. Moreover, the more specialized your offerings, the less competition you’ll be up against—giving you a competitive advantage within the larger market and reduced price competition.
How to find your niche market in 5 simple steps
1. Identify your strengths and area of interest
Before you can go any further, you’ll need to identify your niche area of interest. If you’re not fully invested in this niche area then it’s not a sustainable idea. It should be something you’re passionate and knowledgeable about, and something you can see yourself still being interested in for years to come.
To start identifying your niche, consider what your brand has to offer and your strengths. Play to your strengths, skills, and qualities to show your audience exactly what it is that differentiates your brand from the competition.
Questions to ask yourself when identifying your niche include:
- Who do you want to serve?
- What are you and your team skilled in?
- What problems do you solve?
- What are your brand’s strengths?
- What area/s are you particularly knowledgeable about?
2. Identify your target market
Once you’ve got an idea of where your niche is going to be, it’s time to figure out who your target market is. Start with a broad group of consumers and then identify subsets within that group to narrow down your niche market audience.
To do this, you’ll need to research your buyer personas. There are numerous tools to help you do this, including our free buyer persona template. Research potential customers to determine their buying behaviors, interests, and pain points. Understanding these things will help you define how your product or service can meet their needs.
Ask your audience what they need by surveying your target market. Look at the online spaces they hang out —Facebook, Twitter, Reddit, etc— to see what they’re talking about and what’s trending. You can even join groups on Facebook and LinkedIn where your audience hangs out and begin a conversation related to your niche market to gauge what they’re interested in.
3. Research your competitors
Unfortunately, it’s not likely you’ll find a niche with absolutely no competitors. You’re likely to have competition, even if it’s just a few brands. If you do find an utterly untapped niche, it might be a sign that others have attempted to tap it and found it unprofitable. Ultimately, competition is a good thing!
Start your competitor analysis by entering keywords related to your business idea that your target audience would use. This will bring up all your potential competitors, so you can sift through their websites, social media profiles, paid advertising, and product listings to see what they’re doing.
Completing a competitor analysis will help you identify exactly how you’re going to stand out from the crowd. Make a list of top competitors, analyze their websites, and think about what you can do better than them. Start by asking the following questions:
- What kind of content are they creating? Is it high quality? How regularly do they post?
- How engaged is their audience?
- How have they approached their branding?
- What’s their tone of voice?
- What are their customers saying about their product or service on review websites?
- How can you differentiate your brand from them?
- What’s your unique value proposition (UVP)?
4. Assess your idea’s profitability
There’s no point taking your idea any further if you’re not sure it’s going to turn over any profit. Before investing your time, money, and resources in something you’ll want to be sure it’s going to pay off!
First of all, conduct a simple Google search. If you find similar products but not much competition, it’s a good sign your idea has the potential to be profitable. You’ll want to take a look at competitor products or services to see how they’re priced. This will help you to competitively price your products or services.
Next, use the Google AdWords keyword planner to search for keywords related to your niche market and the specific products/services you want to offer. Typically, if you find at least 10,000 searches per month, it’s a good sign of a profitable niche market. Google Trends can also help you to identify trending topics to better analyze search volume.
Also consider looking at behemoth eCommerce sites like Amazon or Clickbank, where you can see how many products are already listed (also check out their reviews to identify consumer demand!)
When assessing profitability, think about whether or not your niche is evergreen. Are your solutions providing consumers with something they can’t live without? Are you selling a product that they’ll keep coming back for, like food, drinks, or beauty products? Although jumping on the bandwagon might make you a quick buck, capitalizing on a passing craze isn’t a sustainable business idea.
5. Define your niche market and test your product or service
Once you’ve done all the research, it’s time to put it into practice. Create a simple landing page or website to showcase your offering and enable your target audience to find you.
At first, you’ll want to test the waters to see how things go, so don’t invest a large amount of money initially if you’re not sure how your audience is going to respond. Begin planning how you’re going to reach your audience, and start testing your strategy. Try offering a free trial, content marketing, or using paid advertising to drive traffic.
It’s important to note that niche marketing targets a narrow audience, which means you need to learn how to deliver your message to resonate. In the same way that your product or service is aimed at a niche market, your marketing efforts should be too. Think targeted ads, blog posts, social media posts, and other types of content that align with your target message.
Remember, if your niche market doesn’t respond immediately—just keep trying! Like all things marketing, you need to test, review, and revise to continuously improve your niche marketing strategy.
Start targeting your niche market today
Niche marketing is the ideal approach for small businesses. When you find your niche, you can begin marketing to a narrower audience who are more likely to become loyal customers as you’re offering exactly what they’re looking for. With less competition and greater visibility, marketing your business to a niche market is the best way to get ahead in today’s competitive landscape.
Need more guidance about finding your niche market? We can help! Book a free consultation today.
