More than ever, shoppers are making purchases over the internet. In 2021, estimates suggest that more than two billion people will purchase products and services online. That’s up by around 500 million in the last five years.
What does this mean? That there’s ample opportunity for every business to find customers willing to spend money with you. Companies both great and small recognize this, and that’s where the downside comes in – competition in the online world is fierce.
Markets are crowded, and consumers increasingly struggle to weed out the good from the bad. As such, it’s becoming difficult for businesses to make their mark in online markets. So what can you do about it?
Enter niche marketing. By making use of more closely defined, intimate market niches, you’re more likely to find success online.
This guide will give you an understanding of niche marketing – and the niche research you’ll need to carry out to strike gold for your business. Whether you’re trying to establish an affiliate website or attempting to monetize a hobby, this article is essential reading.
What is a Niche?
Let’s start simple. What is a niche? In marketing circles, a niche refers to a specialized segment of a larger market. It has its own identity that separates it from the rest of the market in some way.
How about an example? A business is looking for a group call app to enable video calls between remote staff. There are some free options around, but they limit the length of calls or the number of participants. Naturally, this is problematic.
This need creates a niche since the wider market doesn’t offer an acceptable solution. To fill it, a service provider could create a video conferencing tool that provides limit-free group calls. This renders other options obsolete for this specific type of consumer.
By aggressively pursuing a niche market, a business can extract market share that wouldn’t have been accessible to them otherwise.
Why Do Niche Markets Matter?
Some people struggle with the idea of niches. They think by limiting the number of people you’re targeting, you’re limiting your business’s profitability. That’s not the case.
When niche marketing is carried out effectively, it allows you to build brand recognition and credibility. Once you’re more well-established, it’s possible to pivot into new market niches, and you stand a much better chance of making an impact on the wider market.
Certainly, it’s far more sensible than mindlessly blasting out direct mail or making cold calls to uninterested consumers in the wider market. Those tools are best used with nuance. In these cases, it makes sense to be a big fish in a small pond rather than a small fish in a bustling ocean.
How to Identify a Niche
It’s clear that niches offer a real opportunity for profit-making, but how do you settle on the one that’s right for you? You’ll need to carry out extensive research to assess the feasibility of a niche, and there are a few characteristics you ought to look for.
Building a business takes time, energy, and money – sometimes, lots of money! It’s equally demanding setting up your business to operate in a niche. Accordingly, it doesn’t make a whole lot of sense to tune up your business in this way if the niche you’re selecting isn’t sustainable.
Short-term crazes and fads will quickly decline in popularity and leave you with a diminished target audience. This doesn’t mean there isn’t money to make, but it brings into question the practicality of the venture.
Some people mistake audience size with profit potential. This is always a mistake. Just because your niche has a large audience, doesn’t mean they’re likely to shell out their cash. You need to be sure the consumers you’re dealing with are happy to spend.
Are you solving a painful, urgent problem for them? If you’re answering a need that is dire enough, they’ll respond with their wallets. If not, this isn’t the niche you should be targeting.
Niche markets are attractive, in part, because they have reduced competition. Even so, that doesn’t mean you’ll be operating with total freedom. In fact, if a niche doesn’t have some existing competition, this might raise doubts about its profitability.
Finding a sweet spot can be challenging, but it is possible. Ideally, you’re looking for a niche that is beginning to flourish but has not yet reached the mainstream consciousness. Establishing yourself as one of the early actors gives you a chance to forge an authoritative reputation before things get more crowded.
Niche Research Strategies
Now that you know what you’re looking for, how are you supposed to identify these qualities? Below, we’ve compiled some niche research strategies to find the best opportunities. From social media and SEO research to monetization evaluations and competition analysis, we’ve got you covered.
Assess Your Strengths
If you’re going to try your luck with a niche, it might be best to pick something you have an existing interest in. Being knowledgeable about a niche gives you a distinct advantage when it comes to uncovering gaps in the market. It means you’ll have a better understanding of key performance indicators (KPIs) too.
Importantly, it means you should be able to power through the harder times when it feels like the business might not be successful. This is something most business owners experience at one time or another.
Did you know that 51% of shoppers use Google to research the purchases they’re planning? That’s an incredible number. Billions of product and service searches are completed every year, and you need to take advantage.
There’s a wealth of data out there, so use it. Platforms such as Moz can offer insights into people’s searches in the wider market. This can help you to identify potential niches.
Searches for video conferencing companies, for example, bring up results relating to specialist platforms for the elderly. Others are looking for educational solutions. These are niches that might be worth pursuing for these types of businesses.
Analyze Your Rivals
Once you have a niche in mind, you need to have a clear idea of how you’re going to make money from it. You might have some already – affiliate programs and advertising come to mind – but crystal clear clarity is what you require. Your competition is a good place to start your assessment.
Using platforms like Ahrefs, you can gain access to the highest-ranking (i.e. most successful) content in your niche. Once you know who you’re competing with, you can explore their monetization methods.
Affiliate links and ads are a fine choice, though other businesses also sell their products and services directly to their audience. Naturally, the type of business you’re running will have an impact on how you generate revenue.
Evaluating your competition won’t only show you what’s successful in a niche but help you identify gaps they’ve not monetized yet.
Making Your Case
After learning about the niche you’re going to target, you need to come up with a plan of action. What unique selling points can you offer? Which problem are you solving for your audience? Much like a startup that offers flexible working hours to lure talent from larger organizations, you need to find a way to set yourself apart, particularly if you’re a newcomer.
Are you offering expert information and product recommendations? Specialized tech assessments of online meeting software or cloud storage? How about physical products? It doesn’t matter. Either way, the marketing strategies you use need to emphasize why your business is worthwhile.
The principal advantage of a niche market is that you can make serious money without battling the big boys all the time. Finding a profitable niche, however, is something many businesses fail to do, but with some clear thinking and defined research, you can make the right strides.
Leverage niche research. Expose market gaps, assess your competition, and exploit what they’re missing. Do it properly, and your success is assured.