Small business owners have a lot on their plates these days. Not only do they have to be on top of strategy, sales, and customer service, but it also seems they have to be marketing experts too!
As a small business owner, you are often told you should “define your target market,” or that you need to “find your niche.” Those in the know can make it all sound very simple, but the average Joe who isn’t a marketer by trade can easily come stuck before they even get started.
What sounds easy in theory can actually be very difficult to put into practice unless you know how. But never fear! In this article, we cover all the basics for finding your niche audience and aligning this with your business offerings.
What is a niche and why should I care?
A niche market (usually pronounced “nitch” in the US and “neesh” pretty much everywhere else according to the Cambridge dictionary), is “a small area of trade within the economy, often involving specialized products.”
The process of defining your niche basically involves “zeroing in” on a small segment of the market that is typically not well served by existing offerings, and that has a clear need that your company could potentially fill with a well-selected product or service.
But why bother defining a niche anyway? Surely you should just take money from anyone who comes along, right? Couldn’t anyone be a customer if the price is right?
Wrong, actually… dead wrong!
Imagine a scenario like the one just mentioned, where a business is happy to adopt a fair laissez-faire approach when it comes to defining their market. Promoting the business does not involve much forethought; advertising is run on a “hope-for-the-best” philosophy; it is assumed whoever “answers the call” will be drawn into the business, almost by osmosis.
Marketing this way is a little like hiring a helicopter and dropping a sack of leaflets over a city, hoping some of them will land in the right hands. Admittedly, a lot of them will fall in the lake or end up in the garbage.
Probably most of them. But hey…you can sleep easy knowing your marketing job is “done” for the day, right?
Would you run your marketing strategy like this? No! It’s just plain crazy, right? And yet people promote their business in this total scattergun fashion ALL THE TIME.
The truth is, there are many good reasons for targeting your marketing to a very select group of customers. Here are three of the best:
- First, and perhaps most importantly, it will ensure that you are not wasting valuable time and effort promoting your business to those who are not interested in your products and services and probably never will be.
- Secondly, it makes your market research so much easier because you are very specific about who you want to learn more from and about.
- Thirdly, it makes it much simpler to deliver marketing messages to the right people. In being very specific about who should be receiving those messages, you can use tools like social media campaigns to direct your advertising right where it counts.
OK, so we’ve covered the WHY of finding your niche market, but now we will tell you the HOW! A strategy like this one needs a game plan, so here’s a basic step by step plan to get you started:
1. Do some brainstorming.
Yes, admittedly we’re going to have to start this off with a little mental heavy lifting, but it’s good to know that the more time and energy you invest in this end of the process, the easier it becomes at the other end!
You need to begin by working out who is best served by your current products and services. This often involves some digging back over your sales records to determine how your market is broken up into segments, based on a range of information such as demographics, psychographics, lifestyle, and buying behavior. It’s a bit outside the range of this article to go into this in too much depth, but there are some introductory pieces here and here if you wish to follow up.
In this process, you may well uncover a new market segment that would make huge sense to market to but who you are not currently serving. If you think it makes sense to do so, and it seems like a good opportunity, you should list them as a priority target segment as well.
A final step in this process is to run some numbers, exploring the viability of these segments both now and in the future. What do you estimate the size of the segment to be, and how is it expected to grow and change over the next 1… 3… 5 … 15 years? What are the known buying behaviors of this group and how might they be affected by broader social trends? What might impact their future purchasing power?
You don’t have to know all the answers to these questions straight away. Market research is an iterative process, and it might be that some of these answers emerge in time, a bit like an image on a Polaroid that becomes clearer as you shake it. But it helps to start thinking about them early.
2. Weigh the options.
Now is the time to reflect on how well aligned your identified niche segment(s) are with your existing product and service base. Is this niche(s) well served by you already or would you have to make the effort to reinvent your product and service offerings to appeal to a whole new segment?
It’s definitely worth thinking about. New product development isn’t cheap, so it pays to look before you leap. If you can tweak an offering you already have, this is often preferable to reinventing the wheel.
Above all, be very clear about what your segment(s) burning needs are and how your product or service can or does meet them. If you can’t articulate this, it’s time to go back to the drawing board for some more reflection until you can.
3. Put it to the test.
We live in an amazing age for business experimentation. The advent of social media marketing has meant that it is really easy to test your proposed niche’s responses to your marketing campaigns and to adjust these accordingly.
Advice from the Social Media Examiner suggests that there are a number of strategies you can put in place to align your marketing messages with that of your niche markets. These include echoing your niche’s preferred language (not only use of slang but also preferred terminology), reinforcing their moods and interests and supporting their social stance on key issues.
Whatever your strategy, it’s important to measure, measure, measure! There is absolutely no point in running an experiment without crunching the numbers to make sure it worked. You need to know it has been effective (Kissmetrics have some suggestions on how to go about this).
It’s not an impossible task to find your niche market, even though it might seem that way at the beginning. The challenge rests in where you take it once you’ve defined that niche.
Now, it’s up to you!
Parker Davis is the CEO of Answer 1, a leader in the virtual receptionist and technology enabled answering services industry. He believes that the application of data analytics, investment in technology, and fostering a positive company culture together create highly efficient and scalable growth companies. In 2016, Answer 1 will achieve record revenues while also being awarded the Top Companies to Work For in Arizona award. Parker is also the Managing Partner of Annison Capital Partners, LLC, a private investment partnership. Follow Parker: Facebook, LinkedIn, Website