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NICHE MARKET: DEFINING, CREATING, and EVALUATING
A niche is a specific target market. It is the portion of the market that you want to focus on.
There are billions of people around the world. Data shows that almost half of that is in their 30s. Who are you trying to serve? What is your niche market?
If you are trying to be everything for everyone, then you are bound to fail. Apart from your inherent human limitations, there is also an endless consumer need that you have to satisfy. If you try to cater to different groups depending on what is trending, then how can you define your brand identity. By trying to serve everyone, you may end up with no one.
What is a niche market?
A niche is a specific target market. It is the portion of the market that you want to focus on. Niche marketing involves developing a specialized marketing strategy for a unique audience. The process of narrowing down the broader market into a specific subset is called niche creation. Many entrepreneurs, writers, and artists are told to find their niche. Hence, they constantly try different shoes and make everyone happy -in the guise of evolution. Such “all-over-the-map” endeavor can be enlightening and profitable in the short-term, but rarely successful.
Develop an Ideal Niche
Typically, consumers are looking for the best ways to pursue their wants or their needs. Every potential demand is a potential market. However, it does not mean that you need to fulfill any consumer demand that you come across. Just as you cannot apply to every job vacancy posted online.
In contrast to finding a niche, developing an ideal niche means you are aligning your niche’s demands with your expertise, resources, and needs.
Steps to Develop a Niche Market
- First, you need to find a demand that is currently underserved. If you have a business idea, try to look for competitors or similar companies and identify the areas that can be improved. Listen to the consumers. Review comments. Search for questions related to the product or service you want to offer.
- Second, consider your strengths and weaknesses in relation to the demand that you want to fulfil. Identify the skills that you need, the expertise your business can offer, and the experiences you can leverage. An ideal niche is the one that your brand or business can serve. If you do not have the skills to fulfil the underserved demands, can you find someone else to do it for you?
- Third, evaluate the profitability of the niche. An ideal niche has enough potential consumers who urgently need the demand that only you can offer. Niche marketing can only gain profit if you can reach your niche. If they are not urgently looking for a solution or if they do not know that your business exists, then there is no profitability.
- Lastly, you need to stay open to new opportunities and refine your business ideas. If the niche is unprofitable, you need to make the necessary changes and adjustments to improve it. If your ideal niche has demands that you cannot meet, perhaps you can hire a person who can.
Developing your ideal niche market is a critical part of your business plan. For entrepreneurs and freelancers, it is an essential ingredient of your personal brand. It is where you will base your marketing strategies and branding efforts.
Benefits of a Niche Market
It may appear counterintuitive to serve a smaller portion of the market rather than a bigger one. With globalization and the Internet, you have the ability to tap into any market. It is natural to think that there is a greater opportunity in catering to a broader market. After all, more potential consumers mean more potential profit. However, the benefits of having a niche market outweigh those potentials.
- You can serve customers better. Focusing on a specific market means all your efforts (research, branding, engagements) will cater to the needs of your niche. Customers will feel more valued and understood, which translates to higher loyalty.
- It limits competition through differentiation. There is a good probability that a similar business idea already exists in the market. By creating a niche market, you will be focusing on particular aspects that others may have missed or could not serve. I find the metaphor “instead of being a small fish in the big ocean, it is better to be a big fish in a pond”.
- Aligning your goals with your niche can save you a ton of resources -money, time, effort. Since you will be speaking only to a small portion of the market, you do not need to spend resources on other market segments.
What are the Niches that You Need to Avoid
- Avoid niches that are too broad and oversaturated. For instance, creating a blog that reviews the latest smartphones or creating another SEO-focused website. If there is nothing new that you can offer, then do not even start. Unless you can differentiate yourself from the big players, then it is better to find a different niche market. For example, instead of focusing on the latest gadgets, you can create a blog about the latest gadgets for teen influencers.
- Avoid niches that you have zero experience in. Unless you are a genius and you have a lot of time to spare, it is better to stay away from niches that you do not even understand. Apart from not having a real understanding of the consumers’ needs, you will be exhausting yourself trying to learn everything for the first time. Worst, if you have no genuine interest in the niche, you might quit altogether and end up wasting time.
- Avoid niches that appeared because of a trend or time-limited event. You need a sustainable niche to have a sustainable business and not something that just come-and-go. If you are targeting a trendy niche, make sure that there is a much stable niche that can sustain your business.
Evaluating Your Niche Market in 3 Steps
Your niche market may evolve along with your business and brand. Therefore, you need to constantly evaluate your niche market as you grow.
- Research your audience and communicate with them. Check if they have a shared interest or community that you can join. Are you still fulfilling their needs? If not, you may need to redefine your business strategy or your niche market.
- Learn about consumer trends related to your niche. You can use a Lookalike Audience to find if your niche is becoming too broad or if there are new subsets in your niche. Remember that your niche should be profitable.
- Review your competitors. Specifically, you want to learn if there are new competitors and how you compare with them.
In personal branding, it is important to maintain authority over your niche. Therefore, you need to evaluate your niche market and keep it updated. This will also ensure that you stay focused and consistent in your marketing strategy and goals.