There is always a lot of confusion around defining what a niche market is.
In broad terms, niche marketing is about operating within narrow and clearly defined marketing boundaries. It is about positioning yourself so that you can become a “big fish in a small pond”.
Being able to define what a niche market is can be completely pointless if you don’t understand the benefits being in one can bring, against trying to compete in a mass market.
When your business operates in a genuine niche you will benefit in several key ways:
- You won’t spread yourself too thin
- You won’t have to invest in a broad range of products or services to sell
- A single niche business can expand based on actual sales and customers
- Achieving know, like, trust is easier through demonstration of single topic expertise
- You will benefit from more targeted referrals
- There are often more lucrative repeat business opportunities
Finding your unique space and identity is easier in a niche market. This is a key consideration because it will allow you to define your unique selling point more clearly. This will help to drive all your marketing efforts with clarity.
Potential customers will make buying decisions more quickly and more strongly when they can see clear blue water between their available options.
So How Do You Actually Define A Niche?
The key to defining any niche is to understand that it is about targeting a group of potential customers who display both the same buying behaviours and buying patterns.
A niche is a clear need, want or preference held by that potential customer group.
So when searching for a niche, look for a specific core problem that someone has, for which you can provide a complete solution.
To define your niche, you also need to be able to understand what a niche is not.
A niche is not a demographic. So women over 40 is not a niche.
However, some demographics can also be a broad niche in certain circumstances. Single men is a demographic.
But it is also a broad niche when looking at promoting online dating sites through affiliate marketing. Any single man can be pointed at a general-use dating site and be profited from.
Usually you would break that broad niche down. So single men would tend to be broken down into age groups to better target the different types of dating sites out there.
Single men, aged 18-25, looking for high quality dating opportunities is a targeted niche, within a broad niche, within a demographic!
Take A Broad Niche And Drill Down
Let us further understand the difference between a demographic and a broad niche, by taking a look at a couple of example broad niche’s.
Dog owners is a broad niche. These people can be targeted for selling a specific group of products or services to. However, to get maximum benefit, you will need to drill down further to create a unique opportunity within a narrower niche.
Remember we said a moment ago that you are looking for a group of people with a specific core problem?
So dog owners looking to buy a new garden kennel is a highly-targeted niche.
Teenagers is a demographic. Teenagers looking to buy ringtones is a broad niche. Teenagers looking for rude ringtones is a highly-targeted niche.
Drilling down in this way will allow you to segregate a set of people who can then be highly targeted. This will make your product selection and marketing decision far easier.
Learn To Deeply Understand Your Niche
Once you’ve taken a broad niche and have drilled down to find a targeted group within that niche you can sell to, then you can build an online business to target those people.
People in a niche will congregate online.
They will do this through the search terms they use to find what they are looking for. They will visit information centres, such as online forums, social media and special sections on broad niche websites.
By understanding exactly how these people find what they’re looking for, you will put yourself in a position to refine that process for them to make it easier to buy.
This means creating a streamlined information flow which remorselessly leads them towards a purchase. It means gaining their trust through positioning yourself as an expert source. It also means understanding your niche deeply enough to speak to them in the language they understand and expect.
Build On The Benefits Of Being In A Niche Market
There are several key benefits to defining and operating in a true niche market, which can sustain your business for the long-term and which make clearly defining your niche essential.
The major benefit is strong customer relationships. This will generate more sales and will give you free advertising through personal recommendations.
On top of that obviously major benefit, you are also helping to protect your business from new entrants into the niche. This is often a poorly understood benefit. By positioning yourself clearly and strongly within a niche and building relationships, customer retention should be high. This will give your business greater stability for the long term.
The second major benefit is that most of the time your customers will have less of a focus on price as the major element of the buying decision.
This focus on benefits and solutions, rather than price, within niche markets means that there is less of a “race to the bottom” through discounting and special offers. It also means that you can focus on developing a strong, information-based sales funnel that will allow you to convert through demonstrating expertise and connecting with prospects.
So what niche do you operate in?
Do you think you fully understand which niche you actually sell in?
Are you 100% sure that your business is clearly positioned to benefit from niche sales?
If you’d like some help strengthening your businesses position within your niche, give me a call and let’s talk.