Once you come up with the perfect business idea and before you go any further, your next most important step is to define the market you are about to target. This also applies for companies and entrepreneurs that already have their business ideas up and running but they want to achieve more than they already do. This process is known as creating a niche and the truth is that it works as the key to success for even some of the biggest companies in the world. The creation of a niche and the definition of a niche market is of great importance for companies that look ahead and are interested in achieving results in the long term rather than the short term, so let’s see what a niche market is and how can companies and entrepreneurs define it in the right way.
What is a Niche Market?
A Niche Market is a segment of a market that a company should select in order to sell and market its products and services more efficiently. In simple words it is the part of a market that a company should focus on and invest in if it wants to achieve the highest possible results with the minimum possible risk. There are two main markets that companies can sell to, and these are the Consumers Market (also referred to as B2C) and the Business Market (also referred to as B2B). These two markets can be segmented into smaller parts which are called niches and once a company has chosen in which of these markets it wants to focus in can start developing and expanding. A niche in simple words is a group of people that have common interests, common characteristics, and common values. Once a company identifies its niche or its niches it can start focusing on acquiring as much as it can from them.
Why should a company identify it’s Niche Market?
There is a common misconception that doing many things and offering many options to your clients is the factor of success, but in reality what works nowadays requires simpler, smarter and more exclusive techniques. Although many people believe that the wider the range of their products and the more services they offer the more people they can reach, the truth is that the market operates in an entirely different way. We live in the era of specialisation and consumers tend to trust more companies and products that focus only on one thing than the ones that offer many and different things. Therefore companies should focus on identifying their niche markets in order to test, apply and evaluate strategies in smaller an inexpensive samples among with creating value for small groups of people and then expanding to bigger audiences.
How can a company identify it’s Niche Market?
There are a few simple steps a company or a business developer should do in order to identify it’s niche market and these are:
The Ideal Customer: The first thing you have to do is to create the persona of the perfect customer for your business. Note down which type of customer would better fit what your company offers and what your products want to achieve. Just remember to be specific and not to be too wide when identifying them. Write down everything that describes your ideal customer from georgraphic range to the financial status and create as clear of an image as you can in order to have a better understanding of what you are after.
Focus: Once you have identified your ideal customer it is very important to understand what your company does and what your company wants to make out of a transaction with him. Focus on understanding your operations and your goals better than usual and keep in mind that the only way to create you niche is if you know what you want to have as an outcome.
Find The Concerns: Talk with people that could be potential clients and ask for feedback as often as you can. This will help you identify all the barriers and the problems that could occur in a transaction between you and your customers and lead you to eliminate them one by one lowering the resistance and creating a customer base.
Synthesize: Now that you have identified your ideal customer and now that you have a better image of your products and services and you have found all possible barriers its is time to synthesise. Take all the information you have and convert it in to action. Create your niche market and decide which segment of the market you want to address based on data and results.
Test & Evaluate: Business will always be about testing, evaluating and readapting. Once you have defined your niche market test your hypothesis and wait for the results. After that evaluate the results and try to understand your strong points and your weak points, this will help you focus on what you are doing right and you have to keep doing and on what you are doing wrong and you have to change doing.
Identifying your niche market could be challenging for many companies and many people think that you have to find your niche market but the truth is you have to create it. Don’t rely on just searching for niches and targeting them but instead focus on understanding various elements and considering many factors that could form a niche market that is tailored to fit your companies needs and aspirations.