- Do you have an identifiable target population with similar interests and needs?
- Is the market large enough to support your business?
- Has your business offerings got natural attractiveness to this market, or can your products, services, and business identity be TAILORED to address that market’s particular needs?
- Is the target market currently underserved?
- Marketing. Can I reach my potential customers in a cost-effective manner?
- Where do you think they are they hanging out?
When starting out in consulting or small business, you may have wanted to serve everybody with a budget! But this can cause problems, like wasteful advertising; so let’s look at the benefits of niche markets and marketing, plus the potential drawbacks of a niche business.
This article starts at beginner level, so you can skip down if you’re a marketer.
Niche marketing definition: (mine)
Choosing a smaller target market and marketing strategies designed to reach that target market, thus laser focussing your marketing efforts.
Niche market definition (Shopify)
A niche market is a subset of a larger market, with its own particular needs or preferences, which may be different from the larger market.
A niche can be defined down different lines:
- Price–and thus perception
- Demographic data (age, gender, income, education level)
- Geographic data (area they live or work)
- Psychographics (their values, interests and hidden desires)
- Level of quality
Breaking up the ideal market into multiple niches is called segmentation. So yes, you can have more than one niche… if your business has the capacity to serve several segments.
Niche Marketing Advantages
When you try to market to everyone, you market to no one!
Once we understand all the common elements of our target buyers and what they want, then we can market directly to their needs. Thus, we have a darn good chance of hitting an emotional mark.
Sometimes we over-complicate selling and forget the most important thing. A famous copywriter (Gary Halbert?) once asked his crowd: “you open a pie truck, how do you sell a beef pie”?
Lots of creative answers came out (which I’m making up right now, it was long ago):
“offer different toppings”….
“make it really crispy”…
“make big signs”…
All good answers. But the last laugh was on the copywriter. He simply said, “No. The best way to sell a beef pie is to find a starving crowd”.
It’s the same way with a niche market. While entrepreneurs desperately growth-hack and pay for Facebook ads and switch promotion tactics left and right, they leave money on the table.
The prime advantage of having a niche market: it makes it easy to market to a hungry crowd. Offer a tasty hot pie, at a reasonable price, outside offices at lunchtime. No harder than that.
This easily translates to service businesses. There’s like 1,000+ virtual assistants in Australia. To stand out, a VA might become ‘the #1 WordPress Virtual Assistant in Australia’. That’s a big niche market, defined, and does it matter if other VAs can do it too?
No, not at all. Perception is 9/10ths of the marketing law! But if WordPress is the niche you choose, that’s also got to be your expertise.
Two Niche Market Examples
Carrying this example through, I found two great VA businesses (working from home).
“Tech-savvy best friends” including graphic design, is Thought Penny. Knows their buyer persona well.
Profitability VA is all about helping small businesses survive, scale and thrive. As well as bookkeeping and website/marketing services, they have their own learning centre.
While they both don’t cut out any of the usual virtual assistant services, each has a name, a brand, and proposition that speaks to a particular segment of these services. Think how hard this must have been to come up with! It takes both introspection and market knowledge.
If you identify with either of these focuses—do you believe this brand proposition/niche values the service higher than the run-of-the-mill VA service? How much higher could they charge?
So, the second advantage of having a niche market (or segment) is a higher perceived value.
Third Advantage of Niche Markets
Let’s speak to the obvious: when you have a niche market, you’re no longer trying to rank for ‘bookkeeping services’ or ‘plumbing service Brisbane’. So you won’t be wasting years hopelessly chasing these over-competed terms.
Instead, like myself when finding the popular search ‘self-publishing help’, with deep keyword research, you may make startling discoveries in the searching habits of your chosen niche.
A few tweaks in the meta-data, a few posts and a page with a ‘leading guide’ around the term, and up the Google rankings your site goes!
This may even be the most fun you’ll have this year! Have a go at free tools Moz Keyword Search (10 search limit) and Ubersuggest to find the long tail of three- and four-word phrases. Google them AFTER you read this article.
The Niche Marketing and Book Guide is written by yours truly.
Niche Business
Look at your Google presence, it’s important.
Don’t get too caught up on SEO though. Moz states there are gaps in other forms of marketing and in business presences, “Websites still matter, of course, but local businesses now need to place priority on managing all elements of their Google presence”. (Source: The State of Local SEO Industry 2019).
Extra information is playing more of a role in the niche search. Business hours information, reviews, Google posts, questions & answers, and photos (put into Google My Business) tend to show up as a ‘Knowledge Graph’ (the right-hand-side panel), while some site queries are found in a ‘featured answer’.
Over half (57%) of all searchers never even leave the Google search page… particularly from a mobile phone. (Source: Rand Fishkin, Skillshare)
How does Knowledge Graph work?
In some searches, like for foods, local celebrities, books, and music, the large knowledge panel attracts your eye. As an author, Googlebot could collate my books under my name there, if there wasn’t already a Jen Lancaster author. Damn!
If you have an idea to ride the back of a search trend with not-so-relevant goods, remember… the GOOGLE SEARCH is about intent, so if people search on a niche, Google will match their intent. Simple.
Reason 3-and-a-half: Lower Click Costs!
Aligned with this idea is yet another niche market advantage: lower pay-per-click costs. In general, when fewer businesses in a field are competing for keywords in Google Ads, the less click cost they will end up paying. Most search advertising is competitive and keyword bidding is war!
With a niche, you’re more inclined to reach the long tail of search… where lots and lots of small numbers of searches happen. These consumers are doing more detailed searches. They want your detailed information.
Any Niche Market Disadvantages?
You need to watch for these two problem areas…
Although people usually like to deal with specialists when they have a particular issue, the fact is, there needs to be enough size to a niche market.
On the internet, this is not such a big issue, because potentially you could reach a national market with a special niche. But it wouldn’t do to be selling leads for ferrets.
Niche Markets can Change their Minds
Another problem you face once you’ve set up your brand for a particular niche is if the macro market changes.
Hello Coronavirus times. Certain brand propositions need to be quickly changed, although the niche could stay the same… as long as that niche market(s) is still prepared to buy from you!
For the company who offers social media marketing for real estate agents, they would still want that niche in a recession/shut-down, but the marketing proposition may need to change. People will have different actions and different priorities.
Remember, target group priorities and lifestyle can change at any time. What once was a great niche market and proposition can quickly turn into a turd. Someone was sparkling with a luxury theme on a Facebook advertisement the other day, and I thought, they’ve lost touch with what their market wants. That’s the wrong brand proposition today.
An example of chasing the wrong niche markets could be assuming that everyone in The Gap, Bardon, and New Farm are primed to buy your BMWs. Nope. Homeowners there might have businesses struggling to cope with the crisis and not in any position to think about non-essential purchases. Who knows? It could be time for the BMW dealer to advertise nationally and test, test, test!
So, audience research (client surveys) and social listening are two ways to find out what a current niche market wants and needs.
What is Social Listening?
Social listening is just finding out what people say in comments on your Facebook page, your competitors’ Facebook groups, LinkedIn feed comments, etc, then collating them to get a full picture of how people feel today about your topic. (Remember to think outside of your product or service to see what’s truly impacting purchases). It’s qualitative research.
In investing, this is called ‘investor sentiment’. In America, the IBD Economic Optimism Index (overall) looks a little pessimistic, while the personal financial outlook is down 18% in those Americans surveyed.
We have a similar rating done by Melbourne Institute, called ‘consumer sentiment index’. Naturally, in Australia, confidence about economic conditions for the next 12 months is at its lowest level in five years. Time to buy a major household item is at a 5 year low as well.
Source: Tradingeconomics.com
Hot Niche Markets in 2023
So we’ve examined changing minds and cold niches, but what are the hottest niche markets coming up?
Let’s start with what books are selling online. Dymocks bestsellers page inidicates popularity for:
- New habits and diet psychology
- Novels or facts about powerful women in misogynist times (Lessons in Chemistry, Not Now, Not Ever)
- Quick Cooking
- Bringing history alive
- Health (Just One Thing)
- Happiness
- Musician’s biographies, if interesting
Consider whether your current offering is something people will prioritise this year, or whether you need to emphasise a different reason for using it. See if there is a drop or a rise for the key term on Google Trends.
In the SEO industry report of 2019, marketers were leaning towards conversions and revenue goals rather than traffic metrics. Local SEOs in 2020 wanted to use deep niche industry knowledge to rule the roost in local strategy.
Almost like a copywriter! That’s what we do well: interest, warm up and persuade newcomers to click, call or buy.
In Summary: 3 Reasons for Targeting Niche Markets
So we’ve talked about what niche markets are, the many advantages and light disadvantages to niching. We’ve gotten off-track with consumer sentiment and Google’s knowledge graph… Plus we’ve looked at what macro market changes can mean for brand positioning and advertising.
Now there’s nothing stopping you from going to the free keyword research tools, spotting consumer sentiment through social listening or research, and making your business HIGHLY targeted to key niche markets!
Research sources:
https://www.thebalancesmb.com/niche-market-definition-for-business-2947188;
https://www.shopify.com/encyclopedia/niche-market
https://www.investors.com/news/economy/ibdtipp-poll-economic-optimism-index/
The State of Local SEO Industry Report 2020, Moz
