Finding Your Niche – Tips on discovering a whole new market.

Want to see your customers naked? Probably not, but this recent story reminded us about the value and power of niche marketing.

“According to the Association of British Travel Agent’s latest Travel Trends Report, the ‘nude cruise’ may be a viable way to lift the falling luxury travel market. By targeting Naturists with cruises where it is okay to strip-off, cruise companies hope to bring a whole new market on board.”

Nude customers may not be a suitable solution for everyone, but the idea does uncover some useful marketing tips.

The numbers game.

There is a natural urge amongst businesses to try to grab as larger number of customers as possible – completely regardless of who they are. Characteristically, this means that your marketing will be very generalised in its message, cheap to produce and distributed very widely. While this emphasis on just getting numbers through the door may be suitable for some simple products and services, it is not right for everyone. Here is why.

Firstly and most obviously, there are likely to be people who plain and simply don’t need or want what you are offering. They may be the wrong gender, age, or may not have the money, time, aspirations or desire to buy. This means that any marketing reaching these people is wasted, and the money spent on it could have been better invested targeting someone else with something less general.

Secondly, although in the age of ‘the customer is always right’ nobody likes to admit it but there is such a thing as a ‘bad customer’. These are customers who no matter how hard you try, they always demand too much support, won’t pay the full asking price, or want so much adaptation or personalisation of your product or service that there is no way of generating a margin.

This is by no means suggesting that you immediately ‘sack’ these customers – although the thought of it might be pleasing. Simply that you don’t want more of them, so spending your time and your money marketing to them is probably best avoided.

This is where good customer profiling comes in.

Customer profiling

When you think about your existing customers – whether there are three or three hundred thousand – they may look like a fairly random assortment of people. Chances are, however, they are not.

Imagine placing the names of all your customers on a giant sheet of paper. Now start connecting them – this customer is like this one, and this one like this one . .then . . . this group of customers is like this group of customers, and this group is like this group. Before you know it, you will realise that there are some pretty strong patterns and your entire customer base probably breaks down to just a few different customer types.

Now for each group of customers, create a typical example including any shared characteristics. Female, 24 – 30 years old, middle class, recently married or long-term partner, good job, probably shops at Top Shop . . . etc. These are your customer profiles. Yes, they may read like stereotypes, but these consumer groups exist and are central to most business’ marketing strategy.

By building a better understanding of each type of customer, you can then decide which groups offer potential, which groups you could meet the needs of better and which groups are a dead-end when it comes to making money. By understanding what they might like, where they might live, what they might read, and where they might shop you can also target your marketing material much better both in terms of the message you send out, and also the way you distribute.

You may end up sending better and more specific marketing material to less people, but you may find you get many more and much better customers as a result.

Finding a niche

If only finding a niche market was that easy. Through profiling you may have found a specific type of customer which is good for you, but the chances are that it is a similar type of customer your competition is also after. Finding a niche is all about finding a different type of connection between your customers, something a little more unusual which might lead you to a whole new ‘untapped’ market for your product.

Say, for example, you make and sell woolly hats. You notice that a few of your customers come in wearing football shirts. Chatting to these customers, you realise that they are buying your woolly hat to keep them warm during the game. So you drop a regular advert in the local team’s match programme for ‘Hats that are guaranteed to keep you warm during the game’ and sales of hats double. You then drop adverts in every regional team’s match programme offering mail-order hats and sales go through the roof. That is the power of a niche market.

The bad news is that finding a lucrative and long-lasting niche is much like panning for gold; lots of effort, lots of false promise, and no guarantee of success. The good news is that if you do find it, you may be set for life.

The key to effective gold panning, is to know which river the gold is in. So although we cannot promise you results in your search for a profitable niche, here are a few ideas on where you might start.

Find the anomalies between your profiles.
In creating customer profiles, you may find that some customers are anomalies and do slot into easy classification. Try to understand who they are, why they chose your product and how they are using it. They may just be anomalies. Or they may be the tip of a much larger iceberg.

Think of other uses for your product / service.
If you are struggling to increase your market share in one area, try to think whether your product or service may be useful to a different type of customer completely. ‘Relaxing holistic massage’ targeted at aged 40+ women can easily become ‘Holistic massage for golfers to improve your game’ targeted at aged 50+ men.

Know your customers better.
Everybody loves to talk about themselves. By listening to your customers requirements you may discover some new potential in your product. ‘Love your product, but if you could just tweak X, then it would also make a perfect tool for job Y’

Look at your local demographic.
You are likely to be surrounded by a mix of groups completely unique to your area. Think how and why your product / service may be particularly useful to them, or things that you could do to make it easier or more attractive for them. It may well be that something as simple as a sign in Polish saying ‘We don’t speak Polish, but we welcome you’ in the front window brings in a whole new group.

Trawl the internet.
Like most things, if all else fails trawl the internet for the answer. Forums are full of people requesting help finding a specific service or product to suit their needs. Not only can you post a reply telling them you can provide it, but if enough people are asking on enough different forums then you may have found your untapped market.