Find Your Niche Market Part 2
Photo Credit: kalidoskopika
In Part 1 you learned the first two steps to finding your target niche market:
- Figure out what you are good at
- Figure out what people will pay for
Now it is time to get more specific.
Third Step – Narrow it down to a niche.
Many people starting a business screw this part up and define their target market as something like “I am going to sell my products to everyone ages 20-50 with a pulse”. WTF? That is way too broad.
By trying to sell to everyone you are actually selling to no one.
Narrowing down to a niche market makes every aspect of your business better:
- Saves you time – you can focus on getting the customers that really want your product
- Saves you money – you can advertise to a more specific group of people for less money
- Makes you more money – you can charge higher prices for a targeted product that customers want to buy
You have limited time and resources and you want to maximize your return. It is unintuitive, but targeting fewer people will make you more money than trying to cater to everyone. In marketing saying no is just as important as saying yes. Who are you NOT targeting?
Common question: Wont I lose some potential customers?
Sure you might lose a few potential customers, but they probably weren’t good customers anyways. Niching allows you to screen for the right customers who will make you the most money and give you the least hassle. The benefits to niching down far outweigh the costs.
Remember you need to find a target niche market with two things:
- Ability to pay
- Willingness to pay
There are several ways to narrow down to a niche:
- Demographic – gender, age, education, etc
- Income level
- Life situation – Getting married? Losing a job? Trying to get into college? Having a baby?
- Common interests: Yoga enthusiasts, runners, hunting, etc.
To define your target niche market pick the cross section between 2 or 3 of those qualifiers.
- women looking to lose weight – Way too broad
- women looking to lose weight before their wedding day – Great niche market size
- women looking to lose weight before their wedding day in New York City – Probably too narrow
Common question: How do I know if my niche is too small?
If you could have every single customer in the niche market and your business wouldn’t make enough income to be worthwhile, then the niche is too small.
Fourth Step – Craft an ideal customer profile.
Everything flows from deep understanding of your customer – it is the most important key to success. This is why it is helpful to be a member of the target market and/or interact with them often.
Now imagine your ideal customer (more detail is better):
- Are they male or female?
- How old are they?
- How do they make money?
- Where do they hang out when they aren’t working?
- What websites/blogs do they read?
Now get inside your customer’s head:
- What is their main problem?
- What fears/anxieties are in their way?
- Who are they trying to impress?
- What is their biggest aspiration? What do they want most of all?
- What language would they use to describe your product?
If you don’t know the answers to these questions then you need to go out and talk to people in your target market.
This ideal customer profile will help you create your sales page later on. It is always better to focus on “front burner” issues instead of “back burner” issues (post on this coming soon). You want to target the customer who knows they have a problem and they want it solved now – they are actively looking for a solution.
Additional niche resources – these are focused on affiliate marketing, but they are also relevant to starting a product based business.
- Finding a Profitable Niche: My Process Revealed – Pat of SmartPassiveIncome.
- How to Decide if You Have a Good Online Niche – Rob of JetSetLife
- How To Make Your First 100$ Online In 45 Minutes Through Affiliate Marketing – David of NicheDash
Ok I have my target niche market… now what?
Once you have decided on your target niche market then you will test out market demand to see if your idea is profitable.
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