When starting a business, rule number one is to know who your customer is. Knowing your customer is the foundation for any successful venture because it will influence your content, marketing, product development—basically every aspect of the company. Yet, deciding on a niche isn’t always easy. The initial temptation is to go broad so that you’re not excluding potential customers. Unfortunately, that approach leads to what used to be dubbed “spray and pray” marketing—a term describing how irrelevant messages get sent to generic audiences in the hope that something will stick. The result when you try to sell to everyone is that you sell to no one. A more solid approach is niche marketing which refers to a strategy that focuses on a unique target audience.
Here are five steps that any business owner or entrepreneur can use to find that perfect niche.
1. Do some soul-searching
If you don’t really care about the work you’ll be doing you definitely won’t be successful. Being an entrepreneur has a lot of ups and downs and the only way to get through those periods is to have a passion for the work itself. Your niche should arise naturally from your goals, interests, and values. The best ideas for a niche market will come from your own experience.
Ask yourself questions like:
- What special skills have I developed?
- What would I love to do even if I wasn’t getting paid for it?
- What do I enjoy doing so much that I lose all track of time when I’m doing it?
- Is there a pain point I’ve been encountering that I’d like to solve for myself and others?
- If I had all the time and money in the world and I knew I couldn’t fail, what would I be doing?
The key to finding the ideal niche is to identify activities at the intersection of what you enjoy and what you’re good at.
2. Survey your target market
Once you have a preliminary idea for a niche, survey that target market to uncover their pain points. Take a look at sites like Facebook, Twitter, Redditt and Quora to see what dialogue people are having. What questions are they asking and what problems are they experiencing? Facebook is especially useful because you can join groups where your target market is present and be a part of their conversations. Offer to help people with their issues and start testing your product or service that way. Create a Meetup group so you can get ideas by personally interacting with your target audience. Surveys are another option to better understand your niche. Tools like SurveyMonkey or Survey Gizmo make it easy to create custom surveys without all the complexity.
3. Research the competition
No matter what niche market you are pursuing, you should definitely investigate your potential competitors. Is there even a market for your niche? Start entering keywords into Google that your target audience would use and see what appears. Is there an opportunity for you to stand out in the crowd? How will you plan to differentiate yourself? If you find a keyword that has substantial traffic but little competition and paid advertising, that might be an excellent chance for you to insert yourself into that market. Also, take a look at your competitor’s content and see how valuable it is. You might be able to uncover an opportunity to deliver a superior product.
4. Assess potential profitability
Now it’s time to determine whether you can profit from your niche market! After doing a Google keyword search, the next step is to explore Google AdWords Keyword Planner. Search for those same keywords and see if any terms result in at least 10,000 searches per month. If you find keywords with substantial search volume, that’s usually a good indicator of a potentially profitable niche. Google Trends is also a useful tool to dig into trending topics. Another idea is to search for those same terms on Amazon and see what pops up. Finally, Clickbank is a helpful resource. This online retailer boasts a library of over 6 million unique products created by passionate entrepreneurs. Doing research there will give you some indication of whether there is a potentially profitable niche market. Ideally, you have narrowed your selection down to a niche that has both a need and a market where people will pay for your product or service.
5. Test your idea
The last step is to validate your idea. Initially, you can reach out to your network of friends and acquaintances to see if they would be interested in your new product or service. You can contact them via email and Facebook asking if they’d like to make a purchase and point them to your PayPal account for payment (even before you have a product to sell). If you end up with a bunch of sales, that’s a great validation of your niche market. Setting up a crowdfunding campaign on sites like Indigogo or Kickstarter is another way to validate your product and also collect money upfront to fund the business. If you’d like to go a step further, you don’t necessarily need to create a full website. Tools like Leadpages make it easy to set up a simple landing page promoting your idea and you can use paid advertising to drive traffic to that page. Even if you don’t seem to gain traction, it could still be a viable niche. You might need to refine your messaging or find a better offer. You can also set up some A/B tests to determine if using a different landing page template delivers better results.
Once you’ve followed the previous steps, just go for it! You can do all the research in the world but until you finally get out there, you’re not going to know how your niche is going to respond to your offering. Remember to remain flexible and continue to make adjustments along the way. Stick with it, and eventually, you will crack the code that will open the door to that ideal niche market.