To be successful online, there is a paradox in marketing you need to embrace: The smaller your target market, the bigger your opportunity. This may seem counterintuitive, because you may think marketing your business to the widest possible audience – trying to be all things to all people – is the best way to succeed. But if you say your target customer is “everyone,” you are really targeting no one.
To put it another way, when you try to be all things to all people, no one will remember you.
There are a number of significant benefits to focusing on a niche. First, you have fewer competitors because fewer companies focus on your specialized target market. Second, you become a specialist, and everyone wants to work with a specialist. You understand your customer’s needs more thoroughly, making your solution more valuable and attractive. Next, your position in the market becomes stronger, which causes your reputation to spread rapidly throughout your target market. Finally, your marketing is more effective and less expensive. Since you know exactly who your ideal customer is and where to market to reach them, you can spend less time and money getting your message out.
How do you identify your ideal niche or target market?
There are a number of things to consider when defining your target market, and I recommend using a combination of the following depending on your business:
Industry: If you market to other businesses, you should focus your efforts on the specific industries you serve best.
Geography: If you need to physically deliver your products or perform your service in a given geographic area, geography will fit into your niche.
Job Function: Remember, you are not doing business with companies; you’re doing business with people. Therefore, job function or role will be important to your niche. Are they the end-user of your product? Are they a purchasing agent? Are they a business owner who wears multiple hats?
Demographics: What common characteristics do your customers share? Examples of demographic characteristics can include income level, age, gender, etc.
Psychographics: In addition, think about common interests, opinions or personality characteristics the people you are working with share. Examples might include amateur woodworkers, tree huggers, classic car enthusiasts, neat freaks, etc.
How will you know if you identified an ideal niche?
An ideal niche market will have the following qualities:
- They have a specialized need or interest, with the key word here being “specialized.”
- Your offering satisfies this specialized need because you are the specialist.
- They need to have economic resources in two ways – money to spend and a willingness to part with their money to satisfy this need because they value your offering.
- They are easy to reach, and it’s easy to market to them and get your message in front of them.
- The niche is large enough to support your business. But don’t disqualify a niche just because it may not be large enough to support your entire business; a handful of smaller profitable niches can be just as good, or better, than one large niche.
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