What Makes for a Niche in the Small Business World?
As a small business owner, you probably are pretty well aware that it is important to get your business into a niche to narrow down your marketing focus. However, you might not know exactly how narrow your focus needs to be. One of the most common mistakes that small business owners make as they try to get into a specific niche is that they think they're being specific enough, when they're still marketing toward a hundred million people. One-third of the US population is not a niche market!
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Here's a tip that should help you get started: the number one question that every true small business owner should be able to answer is, “How would you describe your perfect prospective target customer's characteristics?” Many business owners will answer this question in a way that is far too vague. Sure, you can look at basic demographics like age, gender, location and more, but you need to delve even deeper.
Here are some additional questions that you should consider as you try to find your niche:
1. What is the role of your prospective customer?
Is your customer a business professional, a blue collar employee or a stay-at-home mom? Come up with a rigid definition. Are they a consultant, retailer or licensed professional? You should be able to come up with at least seven qualifiers. Whatever role your customer fits in will have a significant impact on your marketing campaign. It's much easier to determine your tactics when you can define exactly who it is that your relish a business relationship with.
2. What is your perfect customer's economic sector?
Are you marketing toward people in the middle class, or are you in the luxury, upper-class market? Unfortunately, you can't have it both ways, so you need to narrow down your focus. Are they manufacturers, transporters or health care professionals? What economic sector do they focus on?
3. What are your perfect customer's core values?
With core values, you may also take political alignment into account. Products geared toward generally liberal consumers will hit on different core values than those geared toward generally conservative consumers. These values will have a significant impact on how you devise your marketing campaign. Make sure your perfect prospective customer has similar core values. Whether these are political, moral, ethical, spiritual or – whatever – it is relevant when defining your target. Core values that do not align with yours can cause problems for your support staff and sales team.
4. What are the problems that your perfect customer faces?
Your product or service should solve a problem that a specific niche faces. But what is that problem, and does it align with the niche that you are hoping to market to? When you begin to list these pain points, do not list them from your perspective. Put yourself in your perfect prospective customer's shoes. Think of the benefits you offer, not the features of your product or service. Your prospective customer cares about themselves, about their problems, about finding a solutions that fits their objectives – profitably!
5. What brands are already catering toward your perfect customer?
Obviously the fewer the better, but there are likely to be at least a couple brands that have some sort of contact with your perfect customer. What needs are those brands still not meeting, and how can you deliver on those needs? What are your competitor's weaknesses that you can beat them with? The only time this is a problem is when you are selling what may be considered a commodity. That's how you work yourself into the niche more quickly.
Keep these tips in mind as you try to find your niche, and you will set yourself up for success.
Thomas von Ahn | Chief Elephant Slayer | Viral Solutions LLC