By Stefaan de Vreese
Whether you’re selling a product or offering a service, you should always stand out from your competition.
Standing out doesn’t mean being everything to everybody.
You have to find your place in the sun, as they say.
This is especially true if you’re doing business in a crowded niche.
You have to niche down.
SO, WHAT THE HELL IS NICHING DOWN?
Niching down means focusing on a smaller bracket of potential customers within a larger category. This helps you narrow your scope to a select segment or a sub-section of a broader niche.
For instance, a large clothing company might choose fashion lovers for its target market, while a niche business may appeal to environmentally conscious fashion lovers by offering stylish clothes that use eco-friendly fabrics.
Or, a plumbing business can tap into a niche market by specializing in plumbing repair for old buildings and houses.
The possibilities are endless.
A niche market creates a dedicated community for your offerings, comprising of underserved and underrepresented consumers.
Niche markets are founded on these factors:
- Geographic area
- Activity or habits
- Feature reduction or addition
WHY A NICHE IS IMPORTANT FOR SMALL BUSINESSES
Having a niche market allows your small business to survive–and thrive–in any industry dominated by more established companies.
Let's put it this way: by choosing to be a big fish in a small pond, you don’t have to compete with sharks and get devoured in the process.
NICHING DOWN IS JUST A STARTING POINT
A niche may be comfortable, secure, and profitable for businesses. But it can hinder your ambitions for growth by lulling you into complacency and contentment.
By definition, a niche market is small and specific. So, advances in technology, policy changes, or adjustments in a search engine’s algorithms can abruptly put you out of business.
That’s why it’s advantageous for businesses to start with a small niche and strive to grow beyond it to withstand potentially catastrophic shifts.
You can serve your existing niche while expanding your product line or service to accommodate other niches as a strategy to dominate the broader market.
YOU’LL NEVER RUN OUT OF NICHES
Here’s great news! You can find infinite niches in any market of any industry.
There are niches within niches within niches.
Consider the lowly hamburger. How many niches do you think it can sustain? Apparently, quite a lot since hamburger chains are among the most profitable companies in the world, with billions in revenue. There are hamburgers for kids, for adults, for vegetarians, for gourmands, etc.
HOW TO EFFECTIVELY FIND YOUR NICHE MARKET
1. Know Your Strengths
Determine what you’re good at and appraise which unique attributes your product or service offers.
You'll need to ask yourself the following questions:
- What particular problem do you solve?
- Can you solve problems better than your competition?
- What are your talents and skills?
- Who are you most eager to serve?
2. Select Your Most Passionate Audience
Narrow down your general market to identify ideal customers.
While sub-niches have smaller audiences, these market segments are more tightly connected. This ensures that your product or service can take off on a community-wide level through word-of-mouth and recommendations.
Sub-niches typically have less competition because many companies see smaller markets as not worth targeting. Finding the most passionate customers for your product or service results in tremendous customer loyalty for your brand.
3. Define An Unmet Need
Finding your target audience also involves identifying neglected or altogether ignored needs. Identify gaps in the marketplace that your product or service can fill. Your offerings should soothe a pain point that your potential customers are currently experiencing. Also, make sure that the segment you choose has anticipated growth.
4. Research Your Market Base
Understanding the needs, goals, motivations, frustrations, and expectations of a segment is crucial to finding your niche market. Perform constant sustainability checks to evaluate your market base and competition.
5. Devise A Business Plan
Create a business plan that explicitly defines what you’ll provide and the need it will meet. Establish who your target customer is and decide on a pricing model. You can fine-tune your business idea based on the information you’ve gathered from researching your target audience.
6. Market Your Business to Your Target Customer
When you’re conducting business in a niche market, a focused marketing strategy is extremely vital. Your business’ success or failure rests on connecting with target customers and convincing them that they need your product or service.
Targeted ads, blogs, podcasts, and email campaigns are indispensable tools to get your message across a specific niche that would benefit most from your offering.
KEY ELEMENTS OF A NICHE MARKET
The niche you choose should have the following characteristics to qualify as a valid and feasible market:
A segment must be measurable. You should know how many people exist in your prospective niche. Not being able to measure the size and scope of a segment makes it difficult to forecast your profit and growth potential.
You could use your existing customer base and external market research to distinguish key features. A clear definition of a market segment enables your business to move forward.
Identifying a segment is futile if you don’t have access to it. You wouldn’t be able to devise any practicable marketing strategy if your potential customers are difficult to reach. A segment should not only be accessible–accessing it should be affordable as well.
While a niche is an inherently smaller market, it should be significant enough to justify your investment. There should be a sufficient number of people interested in your product or service to make your business profitable.
Stability should also be taken into account. A steady, stable market segment allows sustained profitability and growth.
It's essential that the segment or niche you choose aligns with your brand’s values and mission. The sense of purpose that drives you and your brand should resonate with your customers.
Building your brand with integrity, credibility, and authenticity is the cornerstone of any successful enterprise.
Conducting business in a narrow, specialized market permits you to utilize your resources better and establish a loyal customer base.
Limiting your potential target audience may seem counterintuitive for business at the onset. But soon enough, you’ll discover that a niche market can be quite profitable.
Once you’ve scaled your business within your chosen niche, you can move on to larger markets.
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