It is a common misconception that if you’re not casting a wide net with your marketing, you’re leaving money on the table. Actually, the opposite can be true. It’s more expensive and usually less profitable to sell a range of products to a wide audience. Furthermore, if your product or service is too similar to a competitor’s, price will always be an issue. When price is your only point of comparison, it’s tough to build a successful brand – especially if you are a small business. Niche branding is a great way to avoid these issues. But how do you find the right niche?
First, a broad category like “small business owners” does not constitute a niche.
1) Its members have similar, unique needs within the market segment. You should be able to pinpoint common-denominator needs that differ from the rest of the market. Of course, these needs must also relate to your offering and industry. For example, attorneys may have unique needs when it comes to document copying, but probably not when it comes to the real estate industry. So if you provide copying services, it makes sense to target attorneys specifically, whereas it may not make as much sense if you’re a real estate agent.
Geography also plays a role. Local market segments can vary dramatically from national and global markets, even within the same industry.
2) Your product or service meets (or can meet) these needs better than competing products. Your offering must be attractive to your niche customers, above and beyond other products in your industry. Offer compelling reasons to buy your brand that speak directly to special needs. These reasons do not need to be intrinsic to your product’s features. They can also extend to the special features of your customer service.
3) You can market to these prospects economically. To attain a decent ROI on a modest budget, it must be relatively easy to identify and reach your niche audience. Direct mail is a common method of advertising, but your mailing list can make or break you. If it’s too broad, watch out. Find ways to first narrow your list to qualified prospects, then write your message directly to them.
4) The group is large enough to generate the amount of revenue you need to remain profitable. Remember, your niche must be feasible from an economic perspective. If it doesn’t make sense fiscally, it doesn’t make sense period. 5) Members are not currently being targeted, or not being targeted as well as you can target them. The best niche is one where the competition is ineffectual or nonexistent. Find the “overlooked” niche, not the obvious one. Determining your niche means asking yourself questions like, Who will most likely use my product or service? What makes my brand special or unique? Why are customers choosing my brand?
As markets mature and competition increases, the demand for specialized goods grows. The more you differentiate your brand, the less competition you will have, and the faster you’ll build brand equity. Find the right niche, and conquer the competition!It is a common misconception that if you’re not casting a wide net with your marketing, you’re leaving money on the table. Actually, the opposite is true. It’s more expensive and usually less profitable to sell a range of products to a wide audience. Furthermore, if your product or service is too similar to a competitor’s, price will always be an issue. When price is your only point of comparison, it’s tough to build a successful brand – especially if you are a small business. Targeting a niche market is a great way to avoid these issues. But how do you find the right niche?
First, a broad category like “small business owners” does not constitute a niche. Instead, a niche is much more narrowly defined group of prospects that conforms to the following:
1) Its members have similar, unique needs within the market segment. You should be able to pinpoint common-denominator needs that differ from the rest of the market. Of course, these needs must also relate to your offering and industry. For example, attorneys may have unique needs when it comes to document copying, but probably not when it comes to the real estate industry. So if you provide copying services, it makes sense to target attorneys specifically, whereas it may not make as much sense if you’re a real estate agent.
Geography also plays a role. Local market segments can vary dramatically from national and global markets, even within the same industry.
2) Your product or service meets (or can meet) these needs better than competing products. Your offering must be attractive to your niche customers, above and beyond other products in your industry. Offer compelling reasons to buy your brand that speak directly to special needs. These reasons do not need to be intrinsic to your product’s features. They can also extend to the special features of your customer service.
3) You can market to these prospects economically. To attain a decent ROI on a modest budget, it must be relatively easy to identify and reach your niche audience. Direct mail is a common method of advertising, but your mailing list can make or break you. If it’s too broad, watch out. Find ways to first narrow your list to qualified prospects, then write your message directly to them.
4) The group is large enough to generate the amount of revenue you need to remain profitable. Remember, your niche must be feasible from an economic perspective. If it doesn’t make sense fiscally, it doesn’t make sense period. 5) Members are not currently being targeted, or not being targeted as well as you can target them. The best niche is one where the competition is ineffectual or nonexistent. Find the “overlooked” niche, not the obvious one. Determining your niche means asking yourself questions like, Who will most likely use my product or service? What makes my brand special or unique? Why are customers choosing my brand?
As markets mature and competition increases, the demand for specialized goods grows. The more you differentiate your brand, the less competition you will have, and the faster you’ll build brand equity. Find the right niche, and conquer the competition!
