You might have heard the old saying: “If everyone is your customer, nobody is your customer”. It’s a comment on niche strategy. It’s absolutely true for your business and for virtually every successful business.
Your business should be built on providing a very specific service or product range. You might be tempted to diversify, but it’s not always the best idea. And that’s because your brand or product should be targeted toward a specific audience with specific needs. By meeting those needs, you establish yourself as a trusted resource and as an expert.
A Niche Strategy is More Than Just Products or Services
To apply a smart niche strategy means that you should do more than just identifying a need. You might want to sell your product by setting up a dropshipping business on Amazon – but so are hundreds of other entrepreneurs.
What is it, then, that sets you apart? Why would someone want to buy from you?
You’ll find the answer is a little more complex than just the product or service you sell. It’s closely connected to your actual customers and the tribes they form.
Your Customer Demographics
To carve out a niche, you first need to define your customer demographic. For example, if you’re selling luxury cars, your customers will need to be in a higher economic bracket. This might seem obvious, but these are questions you should ask to obtain a clear picture:
- What is the socioeconomic status of my ideal customer?
- Where do they live, and are there areas of greater concentration?
- How old are they?
- What’s their educational profile?
- Which similar products or services are they already buying?
- Are there other environmental factors that cause them to buy these products?
The Science of Psychographics
In addition to figuring out who they are and how they live, you also need to focus on psychographic information. This is possibly even more important:
- What are their beliefs or values?
- Which style of messaging attracts them to a particular brand?
- Are they individualists, or strongly influenced by peer groups?
- How do you forge an emotional connection with them?
You can really sum up questions like these into one concept: Lifestyle. To build a successful brand, you need to focus on the way you will influence your customer’s lifestyle.
Then, of course, you also have to deal with the question of whether your service or product is actually needed. You might think so – but your potential customers may not.
How to Find Your Unique Niche in Business
When you walk into a store to buy an appliance, what influences your decision? You might cite any of these commonly found reasons:
- Attractive pricing
- A preference for a particular color / style / shape
- Brand familiarity
- Perceived quality and finish
- The brand’s reputation for reliability
- Great after-sales service and easy access to repairs or parts
These are all good reasons – but research demonstrates that people make purchases based on emotion, not logic. And because of that, you should establish what it is that makes your brand different and attractive to your target audience.
This overwhelmingly important factor is called a Unique Selling Proposition (or USP), and it will set you apart. The challenge you face is this: it’s not always what you think it should be. Your potential customers actually decide whether it’s important to them or not.
So, how do you find out? Here are a few steps you could take:
Identify Customer Problems and Pain Points
Find out what’s causing your target audience the most inconvenience, irritation, or anger. If you find something that you can fix, then you’ve just found a service or product idea they’ll actually buy. And by fixing the problem as part of your niche strategy, you’re creating a USP to start marketing to your prospective customers.
Do Competitor Research
If there are already competitors in your line of business (and there usually are!), find out what they’re doing:
- What are they doing excellently? Could you do it better?
- Which area of business are they handling poorly? Is this an opportunity for you?
- How are they marketing their brand? Are there more innovative options?
- Are they doing something specific to attract and retain their customers?
- Is their pricing competitive, and which demographic is it aimed at?
- Do they have a standout USP – and if so, what is it?
If you can answer these questions, you’ll already have a basic ‘compete and beat’ template to work with.
Analyze the Viability and Profitability of Your Niche
Just because nobody else has made a vast success of selling pre-owned underwear doesn’t mean you can’t… but the odds are not great.
You should be consulting with industry players if possible. You should also be surveying your target audience to find out whether they’re open to your product or service, too.
If your product is viable and people are receptive to it, it’s time for a field test.
On the other hand, you may have a brilliant product – but it costs too much to produce or ship. Carefully analyze what the actual cost of production is, or you could run into trouble.
Field Test Your Product or Service
You might have people tell you they’d buy your product – but you still need to test the viability. You can start with a scaled-down offering, and if it takes off, you’re good to go.
How to Build a Niche Audience
Building a true niche means building a relationship. Relationships are built on interaction and trust. Here are a few ways you can begin building a rapport with your customers:
- Where Do Your Customers Hang Out? You want your brand to be seen where they’re most comfortable. This might be a particular social media channel, or at conventions, or on a golf course. Be visible and become a familiar presence.
- Use Keywords and SEO to Attract Your Audience. Get a
skilled copywriter to optimize your website so it attracts the right people who are looking for what you offer.
- Build Relationships Before Sales. Start a mailing list. Invite comments on social media. Create attractive introductory offers. The sales will come as soon as they trust and like you.
- Establish Your Expertise. Make sure you become a resource for information about your industry or niche. Blogging is a great starting point! So is a YouTube channel or a podcast.
- Be Vulnerable – Niche Audiences Are Human Too. You don’t have to be perfect – every business has its challenges. Admit to mistakes and take a human approach to your business or brand.
How to Get Professional Assistance
Implementing your niche strategy can take time and focus. As a business owner, you might want to engage the services of a skilled helper to handle the practicalities for you.
Book a discovery call today and claim your free trial. A professional virtual assistant can help you build your niche strategy – and build your business.