Niche marketing may sound intimidating, but most companies, regardless whether big or small, direct their marketing to specific niche audiences.
According to Kim Gordon, writing for Entrepreneur.com, even the largest manufacturers target carefully pinpointed market segments to maximize the effectiveness of their programs. “Hewlett-Packard, for example,” says Gordon, “markets all-in-one machines that print, fax and scan to segments of the home office market, while targeting larger businesses for higher-priced, single-function units.”
Although niche products can have a narrower market than more common products, they can be extremely cost-effective. If your business is focused on meeting a specialized need in a specialized market, the strategies and tactics others use to market their products and services may or may not be effective for you.
The three rules, according to Gordon, for niche marketing are:
1. Meet their unique needs. The benefits you promise must have special appeal to the market niche. What can you provide that's new and compelling? Identify the unique needs of your potential audience, and look for ways to tailor your product or service to meet them.
2. Say the right thing. When approaching a new market niche, it's imperative to speak their language. In other words, you should understand the market's "hot buttons" and be prepared to communicate with the target group as an understanding member--not an outsider.
3. Always test-market. Before moving ahead, assess the direct competitors you'll find in the new market niche and determine how you will position against them. For an overview, it's best to conduct a competitive analysis by reviewing competitors' ads, brochures and Web sites, looking for their key selling points, along with pricing, delivery and other service characteristics.
SCORE mentor Tom Burgum advises, “Begin with rigorous market research. Resources like Reference USA and RMA financial profiles can provide valuable information.”
When you’re targeting a niche market, having a detailed profile of the customers to whom you’re selling is also essential. First, ask yourself these questions about the customers in your niche market:
- What are their needs?
- What are their expectations in terms of quality, price, speed of delivery, etc.?
- Where can you find them (virtually and physically)?
- How do they shop for products and services like yours?
The answers to these questions will help you determine the ways to most effectively attract the attention of potential customers. Explore:
- Networking at events and industry conferences that draw your target market
- Targeted social media advertising (online social networking sites offer pay-per click and pay-per-impression opportunities to present ads to customers who are in specific geographic areas, those who fit certain demographic criteria and those who have specific interests, etc.)
- Editorials in industry and trade magazines
- Radio spots that draw listeners from your target market
- Guest posts on well-respected blogs that customers in your target market generally follow
Niche product marketing can be very cost-effective because you don’t waste time and money on people who have no interest in or need for your product in the process of reaching those that do.
“Test market your product…your unique selling proposition…your customer value to confirm your assumptions and validate your marketing assessment,” Burgum says. “Although you can never be 100 percent certain about your conclusions, don’t be a victim of paralysis by analysis. Learn what you need to do in order to minimize risks … and then go!”