Business owners are often tempted by the idea of large target markets. They think that creating products or services that appeal to many, means more sales and greater revenue.
But the reality is more complicated than this. When you have a product with broad appeal, you often face greater competition. Other companies will have similar products and they’ll be targeting huge swathes of your market with their promotional strategy.
This is why developing a market niche is so important to businesses, particularly smaller ones. In deciding what it is that makes your product or service unique, you can appeal to a smaller but more receptive audience, making your marketing efforts much more effective.
So how can you go about finding your own market niche? Here are a few steps you should take in order to find the right business niche for you.
Look at your Own Interests, Passions and Values
When you’re working far beyond the standard 9 to 5 to get your new business venture off the ground, it’s all a lot easier if you’re excited about the idea you’re working towards.
Think about your own personal interests and passions. How do you like to spend your free time? What publications do you like to read? What topics are you passionate about? What values would you like your enterprise to embody?
When something is exciting to you it feels less like work. Your enthusiasm will also translate into more imaginative products, services and marketing strategies.
Assess the Competition
In order to develop your market niche, you have to provide something that very few others (ideally no one else) is currently providing. You can only do this by looking at and analysing the competition.
Who is offering a similar product or service? Are there any limitations to the product or service they provide? These questions should lead you to establish what you can do differently – in terms of customer service, product capabilities or branding.
Develop an Understanding of your Target Market
Niche products tend to have very specific target audiences. You need to understand the values and priorities of a potential target market. You also need to know where you can go to reach them with your marketing materials.
By delving into a target market, you can learn more about the problems they encounter. For instance 1300 Rubbish found that hoarders could benefit from their cleaning services, whilst Active Mum found that pregnant women and new mums were struggling to find appropriate opportunities for exercise. Once you understand the problems faced by your target market, you can further develop your product or service to solve those problems effectively.
Conduct Market Research
Once you’ve set upon a product or service and a target market, you should conduct thorough market research to determine the viability of your niche within the market. You may be passionate about your product or service. But the real question you need to answer is whether anyone else shares your enthusiasm!
Any research you undertake should be combined with a comprehensive projection of the sales you require to make your business sustainable. How many people are likely to be interested in your product? Will they buy from you just once or multiple times over the course of the year? Establish demand and potential revenues in order to determine whether your niche market has the potential to be successful in the long term.
Following these four steps should bring you closer to your market niche. You’ll develop ideas that perfectly solve the problems faced by a small but still potentially lucrative target market. In doing so, you’ll find ideas that you’re passionate about, that will be easy to market and that will help you to convert more potential customers into loyal brand advocates.
Melanie Saunders is a blogger and content manager at 1300 Rubbish – experts in the field of rubbish and junk removal. Personally, a huge fan of sustainability and green living.