Are you thinking too big when it comes to your potential market? Attempting to compete with every other business that provides the same services or products you do will not help you win. In fact, it will hurt your efforts to sell to just the right prospects for your business. Perhaps it's time to narrow your market.
Thinking smaller allows you to cultivate a specific niche to build your business around. It is the secret weapon that will enable you to stand out from the crowd.
A niche you say? Tell me more.
Why certainly, friend. Picture this: You and five of your competitors are selling the same product. A customer walks up, anxious to buy that product, but is overwhelmed by the choice of whom to buy from.
You know that your product is the one they should choose. What do you do to make sure they know it too? You focus on your je ne sais quoi – the thing that separates you from the others; whatever you’re able to offer this specific person that the others cannot.
Without a well-defined niche, you're placing all of your eggs in a basket that simply may not product chickens; you don’t know if you’re aiming too high, too low, or in the wrong direction entirely.
In other words, a niche will show consumers what you have that the other businesses don’t. This is what makes you appealing and gets you the sale.
If you think that’s something… check this out.
It’s true that the main advantage of a narrow niche is to make you stand out in a way that those who “sell to everyone” just aren’t able to do. Additional advantages include:
- Making a bigger profit – Let’s look at it from a pure dollars and cents perspective. Say you have a $10 eBook that you want to sell, and you’ve decided to spend $1000 marketing it to 100 untargeted people in hopes that they will buy. Ten people buy. Great! Your 10% conversion just netted you $100... but overall you’ve lost $900. If you’d marketed to a well-defined niche instead, you’d have spent less money, targeted fewer people and probably made a profit.
- Providing exactly what your target market needs – Your target audience will come from your niche. With research, you can determine exactly what products they are looking for, as well as what they don’t want. This is a huge advantage. Now you can confidently focus your time and resources creating just the right products and services your market will buy instead of dabbling in those they won’t.
- Building credibility as an expert in your field – By choosing a more refined group of people to market to it becomes much easier to establish credibility with your target audience because you know what makes them tick. You know their buying preferences. You know where they hang out. You may even know them better than they know themselves. That’s some stealth ninja stuff. The more of an expert you become to those potential customers, the more likely they will buy from you for a long time to come.
Ok. I’m ready to narrow my market. How do I begin?
- Study demographics – Find out your target customers’ age, gender, occupation, education level, and income. Try to be as specific as possible. When creating a demographic profile, rely on hard data whenever possible.
- Observe your prospective audience online and offline – Online, you can listen to the messages they share on blogs, review sites, forums and social media. Offline use focus groups, surveys and mystery shopping programs. Both options will tell you where your customers spend their time and what they say or do while there.
- Engage your prospective market in conversation – Start conversations with consumers in your prospective niche to learn more about them. Get a dialogue going around your industry. Record all the data you gather and organize it so that it's easy to analyze. When done, quantify your results; look for data that's consistent and relevant.
- Draw a picture – Take all the consistent trends you find and create a picture of your ideal customer. Once you've done this you’ll have a much better understanding of what your customers want and need in the products they buy, and just the right way to sell it to them.
Don’t forget to spy on your competitors. Spend time researching your competitors' products. If possible, buy them and use them yourself. Look at how they meet (or don't meet) the needs of your customers. Stay current on each new product or service your competitor introduces. Understand how your market feels about your competitors by keeping your eyes and ears out for any mentions of them.
It’s also a good idea to study your competitors' marketing materials. Look at which benefits they are emphasizing to their customers. Pay attention to the exact language and channels your competitors use. Is there an opportunity for you to be even more narrow in your approach?
Narrow Your Market to Strike Oil
You’re probably wondering when you will know if you've narrowed your market enough? Fair enough. Let’s walk through an example.
The health and wellness industry would be considered a mass-market; containing all products and services related to emotional, mental and physical health and well-being.
One specific subset of health and wellness is alternative healing. This could include acupuncture, acupressure, meditation, yoga, herbal remedies, and aromatherapy among others. Those would be considered micro-niches – narrowed markets.
A few more examples include:
- Online dating > Christian dating services
- Coloring books > adult coloring books for bloggers
- Wedding planners > services for couples over 40
Are you seeing where we're going? Remember, there is no "one-size-fits-all solution" when you are narrowing the focus of your business. Just be sure that if you decide to open a business specializing in organic dog food for German shepherds over 10 years of age that there is enough of a marketplace to be profitable. If there isn't, then you've gone too far!
The process of narrowing down a market to your specific niche will take some time. Don't rush it. In every case, this is time well invested. The more time and thought you spend now, the more perfectly suited your business will be to your passions and abilities.
Think about uncovering your ideal business niche like drilling for oil. You must dig deeply enough to receive a payoff. If you dig too far down, or not in the right spot, you will miss your target. That is what narrowing your market is all about. To strike oil, you have to "dig" down far enough to find the perfect niche for your business.
Another way to think of it is this... without narrowing your niche as deeply as you possibly can, you run the risk of being a small business lost in a sea of a thousand other businesses.
Think small when deciding who to market to. Small is the new big where profits are concerned!