FINDING YOUR NICHE IN THE WORLD
Why do it?
Why should you target your product to a niche market? What is a niche market anyway? And are there any pitfalls to avoid? Let me share some thoughts with you about this approach to doing business.
Selling to a niche market is a way to stand out from competitors, as it helps your business to gain recognition within the market. Your business can become an authority or specialist within your industry for a particular segment of the market.
When your company offers specific products and services to a segment of the market rather than the whole market, you benefit from being able to focus your operations, service delivery and marketing on your particular customer audience. This will make your business more efficient, profitable and sustainable.
One of my clients was establishing a nutrition product business. Initially, he wanted to sell all products to all people. However, I convinced him he needed a focus. Because he was middle-aged with a vast resume of life experiences including being a soldier in the Vietnam war, he ended up focusing on the middle-aged market in middle-class areas of Perth. His business was successful, and his range of products extended to exercise coaching and the like.
A niche market does not necessarily mean a small market, but it involves targeting to a certain customer type with a specialised offering. Your niche may be based on one or more of the following criteria:
- Type or specifications of your product or service
- Demographic base (age, gender, income level, location)
- Values, attitudes, and interests, eg environmentally friendly
- Price (eg budget, mid-range, premium)
- Product and service quality (eg premium, moderate, low)
By focusing on your desired customer audience, your business will be able to focus its resources on those customers that will most likely be attracted to your offerings. These are the people who will most benefit from your product, and therefore, are more likely to convert and become loyal customers.
How to do it?
Some suggested steps for adopting a niche approach are described below:
- Know yourself and your team
Start your strategy by considering what you and your team are good at and what you can best offer. Also, think about the areas that you enjoy working in and the types of people you like working with. You should answer the following questions to know more about yourself:
- What products and services would you like to offer?
- What better features than your competitors do you possess or could attain?
- What type of people do you like to serve?
- How can you meet your customers’ needs or solve their ‘problems’?
- What are your preferred business values?
- Know your competitors
Research your competitors and potential competitors including their products, marketing approaches and the like. Try to find out why consumers are buying from your competitors, and how you can persuade them to purchase from you.
- Spread the word about your business
Niche marketing requires a focused approach to how you spread the word about what products or services you are offering. To do that, you should assess the strengths of any marketing channel that relates to your business. Consider the most effective way to communicate with potential customers. This includes the best way to communicate with them, such as online, media and direct marketing
- Develop values consistent with your niche
Develop and promote business values that mostly align with your market segment. Employ staff and contractors that also have these values, as this will engender better customer relations leading to increased sales and customer loyalty.
- Monitor and improve
Monitor your business performance over time. The number of leads, customer conversion rate, customer satisfaction and of course financial indicators such as sales revenue. If your product is not selling as planned, try to discover the reasons, and amend your product accordingly. This is something I can help you with as a business adviser.
Some mistakes to avoid
Now that we know how to develop a niche marketing strategy, it’s time to look at some common mistakes when targeting a niche market.
- Not fully understanding your niche
Before you target a niche, do a bit of research on its earning potential. The fundamental question is “are the people in my niche willing and able to pay for my product?”
- Wandering away from your niche
While having a niche approach doesn’t prohibit you from selling to customers outside your niche, be careful about how often you do this. It’s tempting to start selling to a wider market, but if you wander outside your niche too often, it may dilute your point of difference and competitive advantage, so be selective about when and how often this is done. Alternatively, you could establish a separate niche for that market segment and package a different product and price point separate from your original or current niche market.
- Not having a plan
Have a business plan about how you are going to develop your product and niche market. Identify responsibilities, actions, resources and timings. Remember failing to plan means planning to fail.
For help with defining or re-defining your market niche, contact me on 0402 843314 or firstname.lastname@example.org for a no obligation discussion to explore possibilities.