September 1, 2020 9 min read
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This article was written by Raqhelle Millbrooks, a member of the Entrepreneur NEXT powered by Assemble content team. Entrepreneur NEXT is our Expert solutions division leading the future of work and skills-based economy. If you’re struggling to find, vet, and hire the right Experts for your business, Entrepreneur NEXT is a platform to help you hire the experts you need, exactly when you need them. From business to marketing, sales, design, finance, and technology, we have the top 3% of Experts ready to work for you.
Businesses that encompass a general marketing strategy target, well, everyone. By targeting wide and broad markets, these businesses yearn to reach more customers and provide value to each consumer.
For certain brands, however, niche marketing is becoming increasingly important, as companies focus on the needs and preferences within a small segment of a broad market. According to the Harvard Business Review, “Most large markets evolve from niche markets, that’s because niche marketing teaches many important lessons about customers — in particular, to think of customers as individuals and to respond to their special needs.”
Many reputable and successful companies have gained traction from their first focus – a niche market – which eventually grew to targeting broader markets as their products and services evolved. Whole Foods is a great example of a niche industry. The grocery chain is known for providing quality organic food to customers that focus on health and wellness. Likewise, mobile-payment company Square found that empowering small businesses that needed a dependable monetary resource for their customer base was a model that helped launch business growth. Now, both companies have expanded their expertise, product availability, and overall company growth simply by widening their success in their niche market(s).
6 benefits of a niche industry
Targeting a niche industry is your company’s opportunity to reach new growth strategies and success. At the same time, niche industries will allow you to assess consumer market research that will engage your audience and strengthen your brand.
Consumer data availability
Targeting a niche industry requires a lot of research, including the right tools and resources to spearhead your results and drive competition. The revolution in data has driven availability and access to various tools that will aid in gaining valuable consumer data for your target niche. With the vast amount of data and tools available, deciphering market research can feel overwhelming. Find expert information or intelligence specific to your industry with these tools:
Market Research features expert marketing information with top resources and reports from marketing agencies and firms.
Find data specific to your industry with marketing intelligence for the automotive, energy, and chemical industry through the Freedonia Group. This tool has reliable and unbiased research surrounding market trends, forecasts, and analysis.
Packaged Facts is the leader in consumer reports for the service, food and beverage industry. Drive your business strategy and growth by exploring consumer data trends and insights.
These tools and resources will connect you with websites, blogs, reports, press releases, and consumer data to spearhead your marketing research. Thanks to the boom in big data, this has allowed marketers to creatively sprout content that directly targets and speaks to a specific demographic, interests or hobbies, preferences, and location.
Less competition = more potential
A healthy amount of competition does drive sales and growth, but small businesses often face more pressure against competition from all angles. When competitors aren’t meeting the needs of a target niche, that’s where your company can thrive. Your company now has an opportunity to hone in on a specific product or service that has yet to be targeted. Be weary, however. If you are too specific, there may not be a need for your product or service.
Additionally, studying your competitors will allow you to find that hidden gem missing in the industry. Your competition will tell you about their broad markets, their developing small markets, their target demographics, and products and services. This opens doors to opportunities to find what consumers are missing from your competitors and capitalize on it. Finding your sweet spot within a market first begins by analyzing the industry. By establishing a business plan that involves industry economic analysis, market participants, distribution patterns, and competition you will be more adept to success.
The number one problem shared among entrepreneurs today is finding, vetting, hiring, and retaining expertise.
Finding your focus
Consumer market research enables companies to fully understand their driving dollar: the customer. From surveys, focus groups, and interviews, market research reads between the lines of consumer activities, insights, and trends. For instance, diving into real estate as a short term rental host and targeting everyone interested in staying in your area, may seem proactive and profitable. Yet, after conducting consumer research you may find that your city is a huge college town offering the opportunity to target visiting families throughout the semester. Or that your town has huge firms, where traveling work professionals are looking for great WiFi connection, cozy corners, and plenty of brewed coffee. Market and consumer research will help you brainstorm connections between ideas, concepts, and strategies that provide a clear focus towards potentially dominating a niche market. Combine your research efforts with analyzing your competition and concepts will flow towards finding your niche industry.
Ideas and concepts may be flowing but remember to stay focused. A lion pursuing its prey has to stay focused on it’s main target, if distracted at any point, their next meal may be gone. How do we starve the distractions and feed the focus? Start with your main industry, and brainstorm concepts and ideas that will relate most to your product and services. After developing concepts and ideas, reflect on your target demographic and choose concepts that will easily relate to your audience.
Main industry: Travel
Business: Travel agency
Target demographic: for business professionals, women and men, ages 45-55, income levels upwards of $150,000-$200,000
Concept ideas: Budget travel, luxury travel, micro-cations, retirement travel
Focus niche: Working professionals are desperate for time off and breaks from their heavy work schedules, based on the demographic and socio-economic status, it is best to put focus into luxury travel destinations deemed for relaxation and rejuvenation.
As visibility channels skyrocket across the internet, consumers are challenging the authenticity and relevance of brands now more than ever. Brands now have the opportunity to use high-traffic channels, including social media, to target consumers. But creating content within a small segment of an industry can connect more with consumers – bringing more value, relevancy and higher brand perception to your company. But being authentic and visible to your consumers starts with the right strategy.
The proper strategy for your business will connect to channels based on your audience’s habits and preferences. Marketing strategies help you distinguish your business and identify effective channels for communication instead of targeting all audiences and all channels in the industry.
Identify your keyword search through SEO optimization
If your audience has higher engagement on one particular social media channel, dominate that channel before expanding to other platforms
Use survey tools to launch your own consumer research or product feedback
Leadership and expertise
Brand perception doesn’t solely rely on value and relevance but also, expertise. Your company has the opportunity to become a leader in your niche industry by providing thoughtful knowledge, research, and expertise on your product or service. Within your targeted segment, your focus on building a repertoire with a consumer can lead them to choose you over a bigger well-known company. Consumers will rely on your expertise to satisfy their needs and wants to enhance their trust and confidence towards your brand.
Think of your own favorite brands:
What does this company do exceptionally well?
What value does their product or service represent?
Are they experts in product knowledge?
Does their customer service team tackle your problems and address your needs?
Does their quality enhance your trust for their brand?
Use your own experiences as a consumer to help craft your leadership expertise within an industry.
There’s an audience for everything
Studying your consumer will lead to findings in interests, perceptions, hobbies, wants and needs. Relating and effectively communicating with your audience will rely heavily on your understanding of their needs. Where does your target audience live? What is their socio-economic status? What does your audience like to spend their money on or save their money for? What are their interests and hobbies?
Examples of niche markets
Strengthening your expertise in one area, versus all areas for all people will enhance your brand perception and engage target consumers. Here are examples of specific niches within broad markets.
The benefits of niche markets are only the start of potential growth and success for your company. Finding your sweet spot may require a heavy amount of market research, business planning, and strategy. Yet, preparation and brainstorming concepts will allow you to dominate a smaller market, connect with your audience, and enhance your leadership expertise as a trusted brand.