7 Steps to Help You Define your Niche Market
So you’ve heard you need to choose a niche market for your business. What does that mean, why is it a good idea, and how should you go about defining it? In this post, I’ll cover all these questions.
Honing in on your niche market is an important step for your business and for your brand. It can feel overwhelming and it may not happen overnight, but taking the time to narrow your focus will significantly increase the effectiveness and efficiency of your marketing efforts. Once you have a niche, directing your communications becomes much easier.
What is a Niche Market?
A niche market is a subset of a larger market defined by its unique needs, preferences, and identity.
For example, within the market of health and fitness coaching there are many subsets. Coaches specializing in vegan, keto, weight loss, or strength building, would all be targeting different niche markets within the larger health and fitness market.
Nearly any market can be refined and narrowed down. A few common factors to look at when defining your niche are:
Demographics - What is the gender, age, education level, occupation, etc. of your client or customer?
Price - Who do you want to work with, or sell to, based on the cost of your service or product?
Psychographics - What are the values, attitudes, and interests of your ideal clients or customers?
Geographics - Where are your clients and customers located? Does your business cater to a specific geographical location, or can they be anywhere in the world?
Quality - Do you offer a unique service approach, or sell a product that is of a particular quality (such as handmade, economical, or luxury)?
By narrowing your niche you can target a segment of a larger market that may be underserved, or underrepresented. You can also utilize a niche market to help you differentiate from your competitors.
Why is Choosing a Niche a Good Idea
You might be thinking “If I narrow down my market too much, aren’t I limiting my possibilities?” In a sense, yes. But ask yourself this: do you really want to work with everyone, or do you think you need to because you’re afraid there won’t be enough clients or customers if you niche down?
Ever heard the phrase jack-of-all-trades, master of none? By generalizing your offering, it’s true that you might, possibly, work with and sell to a variety of clients and consumers. A jack-of-all-trades becomes decent or proficient in a variety of areas, but never becomes an expert in any of them.
By defining a niche, and therefore narrowing your business’ focus, you can specialize your skills and products and market yourself as an expert in your field. You’ll give yourself a much better chance of becoming the go-to brand for a particular audience, showing them that you not only have what they need, but that you understand their exact problem. They’ll know for sure that your brand is the right choice.
Defining your niche doesn’t mean you’ll never work with or sell to someone outside your niche though. It just means that you won’t expend time and energy by marketing to all the “possibilities”, and instead only market to your chosen niche.
7 Steps to Define your Niche Market
1 List out your Interests + passions
This step is simple enough. Make a list of all your interests and passions. What do you do in your free time? What do you look forward to doing? What do you love learning about?
By identifying where your interests and passions lie, you can begin finding links to what you do in your business, and who you cater to.
It might seem like finding work that interests you and lights you up is a bit of a “in a perfect world” scenario, but in reality it is absolutely necessary if you plan to make your business sustainable long term.
If you don’t care, you will quit. It’s not so much a question of if, but when. So be passionate about what you do, because entrepreneurship isn’t what you’d call the easy path to making a living. It takes a lot of hard work and dedication to build a business. Having interests and passions to motivate your efforts can mean the difference between persevering and giving up.
2 Pin-point what problems you can solve or want to solve with your skills
Take what you know first to determine what types of problems you can solve for your clients or customers. The key here is to identify problems that exist, and that you have the skills or knowledge to address. Keep in mind that your target client or customer does not necessarily need to be aware of the problem, but you will obviously need to make them aware if you hope to win their business.
Also, take into consideration that in order to do the work you want to be doing, you may need to strengthen your existing skills, or learn something new. While taking on too much at the outset of a new business might not be recommendable, adapting and growing your skills to improve your offering or products over time is part of the thrill that comes with entrepreneurship.
When in doubt, start with what you know, and keep long term goals in mind as you plan for the future of your business. Working toward a goal you are passionate about is truly the bread and butter of entrepreneurship. Don’t be fooled, one does not achieve success as an end product. Success is the process and the path.
3 Determine who you most want to work with
Who is your ideal client? What specific group of people need the services or products that you offer, and how are they connected to your interests and passions?
Take some time to establish who you’d most like to work with and why.
4 Map out the intersections of your interests, skills + ideal client
Now that you’ve got a list of your interest and passions, as well as a better idea of who you’d like to serve, it’s time to make some connections.
If you’ve been writing everything down so far, you should already be seeing where the overlaps are. However, there is still room to analyze what you have so far and find the connections. By linking all 3 aspects together you will create a unique niche. Try to come up with a few options to start and you can narrow down to just one in the next step.
5 Find out if there is a market for your niche
By this stage you likely have a few niche options to choose from and that you are passionate about. Unfortunately, passion isn’t enough to live on so it’s important to ensure that there is a market for your offering.
You can start with basic keyword research. The Google Ads keyword planner, and Keysearch are both good tools to start with, but there are others as well.
Enter keywords related to your niche and check the results you get back. Look closely at search volume and competition.
You’ll want to choose a niche that has some volume, ie: people are looking for the thing you’re offering. Analyzing the level of competition will also help you determine if that market niche is underrepresented or oversaturated.
Part of establishing your niche is doing the research to ensure that that niche needs your services or products. Don’t skip this step.
6 Identify your competitors
If you find that your niche has no competitors, you either aren’t looking hard enough, or worse, that the niche is not a viable market. Of course it’s also possible that you have a killer idea and are the first person to make it into a business. Step 7 will help you determine this for sure.
On the contrary, if you find that your niche has tons and tons of competition, you may want to consider refining further until you’ve carved out a spot that truly differentiates you from your competition.
Identifying 3-5 of your competitors is a good rule of thumb. Figure out what they’re doing right, what they’re doing wrong, what you like about their offering, what you don’t like, and how you can differentiate your business from theirs.
7 Test the market
Before you go pouring every last penny of your savings into your new business, you’ll want to make sure that there really is a market for your niche. You can of course change your niche, but you’ll probably want to hone in on something semi-permanent before you go through the effort of branding and creating a full website.
Creating a simple landing page, running targeted facebook ads, or surveying potential clients and consumers are some ways to gather insight to gauge interest in your service or product.
Hopefully you’ve found these steps helpful in determining your niche market. Let me know in the comments.