Are you a small business owner? Have you been struggling to understand the intricacies of a niche market?! Or are you looking to narrow down the scope of your business to start targeting more specific customers?
Either way, you’ve come to the right place!
My name is AJ, and I previously owned a digital marketing agency. My agency started as a general digital marketing provider, but eventually, we shifted to focus on one specific niche, SEO.
Ultimately, that decision allowed us to succeed and sell the agency for multiple seven figures.
Let’s look at how you can find and target a niche market of your own!
Key Takeaways
- Niche markets offer businesses the opportunity to stand out and target specific audiences.
- When done correctly, they can be highly profitable. It's essential to research and ensure that your chosen niche market can sustain a viable business.
- Niche and target market are not the same. A niche market is a smaller segment of a larger market, whereas a target market is a group of potential customers.
What is a Niche Market?
A niche market is a market segment focusing on a specific product or service. It consists of people who share similar interests, needs, and wants and is targeted with a specialized marketing strategy.
This specialized target audience can be focused on to create tailored marketing campaigns, products/services, and more.
Identifying and understanding a niche market can be essential to developing an effective marketing strategy when starting a business.
Businesses should focus on finding the right balance between providing services directed to their target market and differentiating themselves from their competitors (with a niche market).
Why Should I Niche Down? Niching down is essential as it allows you to become the “go-to” expert in your field.
Think about it this way: A niche is a subset of a market (or a subset of a subset of a market).
Broad Market Example: Selling Ice Cream
Niche Market Example: Selling Vegan Ice Cream
Ultra Niche Market Example: Selling Vegan Ice Cream for Dogs (see below)
Horizontal Niche Vs. Vertical Niche
When it comes to niching down, there are two main categories: horizontal niche and vertical niche.
A horizontal niche is a market segment that has one level of specificity. For example, you only provide ice cream instead of ice cream, donuts, choco tacos, etc. The key here is that you’re providing one thing (ice cream) for everyone.
A vertical niche is a market segment with multiple levels of specificity. For example, you provide dogs with ice cream, donuts, and choco tacos for dogs. The key here is that you provide multiple things for a specific audience.
A horizontal and vertical niche provides vegan ice cream for dogs. You’re ONLY providing ice cream, it’s vegan, and it’s ONLY for dogs.
Benefits of a Niche Market
There are many benefits to niching down and catering to a specific target audience.
Let’s explore the benefits together!
What are the Benefits of a Niche Market?
There are several benefits of a niche market. Let’s dive in and see!
Streamline Marketing Resources
When you niche down, you can focus your time, energy, and resources on a single target market. This streamlining of resources can help save money and time in the long run.
You’ll be able to focus on the specific needs of your customers by providing relevant content and products/services.
Example: Instead of marketing to all ice cream lovers, you’re marketing to vegan dog owners.
- Vegan dog lovers are easier to find
- Vegan dog lovers are less costly to market to (because you’re not casting a huge net)
Increased Social Proof
You can build a solid reputation with your target audience when you niche down. This increase in social proof can bring in more customers and increase sales due to potential customers’ trust in your business or brand.
Niching down also allows word-of-mouth marketing, one of the most powerful forms of marketing.
Less Competition
When you niche down, there’s a good chance that you’ll have less competition.
It makes it easier for your target audience to find and recognize your brand or business as the go-to expert in their field.
Plus, you can focus on delivering quality products/services without the pressure of competing with other businesses that offer similar products/services.
Increased Brand Loyalty
When you niche down, you create a strong connection with your target audience, as they will likely be passionate and interested in what you offer.
Although this means that your target market can be smaller, it also means you’ll have increased brand loyalty.
This loyal customer base is critical for businesses looking to secure long-term customers.
How to Find a Niche Market
Finding a niche market can be tricky and time-consuming, but it’s worthwhile.
Let’s review some tips on finding the perfect niche market for your business.
Step 1: Start with a Broad Market
Start by choosing an industry or broad market that you’re passionate about.
A broader market will help narrow your focus and give you a starting point with more options for finding your niche market.
Step 2: Reflect on Your Interests
Take some time to reflect on your interests and skills. This will help you determine which potential niches you’d like to focus on and what products/services or content you can offer.
Below are some questions to ask yourself:
- What do I enjoy doing in my free time?
- Am I an expert in something?
- What do I enjoy learning about?
- What skills do I or my friends/colleagues think I am good at?
Reflecting on these questions will help you identify potential niche market ideas to explore further.
Step 3: Identify the Problems and Needs of Your Customers
Once you’ve identified a few potential niche markets, it’s time to identify the problems and needs of your specific audience.
This process involves:
- Studying customer reviews
- Conduct feedback surveys
- Understanding what your target audience is looking for
Pro Tip: Don’t hesitate to ask your potential customers about your thoughts and ideas. Start with friends and family and move on from there.
Step 4: Research the Competition
Once you have a niche market idea, it’s important to understand the competition.
Researching what other businesses are doing and analyzing their strategies can help you develop effective marketing plans and unique products/services that will set you apart from the competition.
It will also help you identify whether there is enough opportunity in your chosen niche market or if the competition is too fierce.
We love niche markets because it gives you a broader understanding that a business is worth pursuing, but there is a plethora of untapped potential.
Step 5: Uncover Your Niche Profitability
The final step in finding the perfect niche market is researching its profitability.
This involves analyzing the potential revenue of your chosen niche market and understanding if it can sustain a profitable niche business.
You can do this by researching the following areas of the niche you’ve chosen.
Product Quality
The quality of your products/services is an important factor in running a successful business.
What kind of quality are your customers looking for? How will you ensure that your products/services meet those standards?
Pro Tip: Don’t be afraid to purchase the products or try the services of the businesses you’re reviewing. You’ll get a great understanding of the quality represented.
Price
The price of your products/services should be competitive to the market and reasonable for the customer.
It’s essential to understand what customers are willing to pay for a specific product/service, so make sure to do some research before setting your prices.
Customer Location
Where is your target audience? Are they located in a particular area or country?
Knowing customers’ locations can help you tailor your services to meet their needs.
If you’re selling physical products, it’s also important to consider the customer’s location.
You need to understand the factors that may affect shipping costs and delivery times so that your customers get their orders quickly and without issues.
Customer Demographics
Understanding customer demographics can help you tailor your products/services to meet the needs of your target audience.
It’s a good idea to research what types of customers are most likely to buy from you
- What is their age range?
- What is their gender?
- What is their income level?
- What is their education level?
Answering these questions can help you understand your target audience and create can create content and marketing plans that will appeal to them.
Niche Market Tools/Hacks
Once you’ve identified your niche market, there are some things you can do to make sure your business is successful.
Let’s take a look at some helpful tools and hacks.
Use Google Trends
Google Trends is a great tool to use when researching the potential of your chosen niche market.
Google Trends provides data on searches in different countries, regions, and cities and can help you pinpoint popular topics with the most growth potential.
It also helps you understand a search queries search volume to determine if your chosen niche market has enough potential to sustain a profitable business.
Try Ubbersuggest
Ubersuggest is another excellent tool for niche research. It helps you uncover keyword ideas related to your chosen topic and analyze the competition to help you make informed decisions.
It provides a list of related keywords that can help you optimize your content for SEO purposes.
Create a Mind Map
Creating a mind map of your niche idea can help you explore the different aspects of your chosen market and uncover potential opportunities.
It’s also helpful in organizing, allowing you to map out ideas related to your business goals and strategies.
Find Passionate Communities on Reddit
Reddit is a great platform to find passionate communities related to your chosen niche.
Look for subreddits discussing topics related to your niche market and engage with the community, as this will help you understand their needs and create content and products/services that meet them.
Niche Market Tools/Hacks
Once you’ve identified your niche market, there are some things you can do to make sure your business is successful.
Let’s take a look at some helpful tools and hacks.
Use Google Trends
Google Trends is a great tool to use when researching the potential of your chosen niche market.
Google Trends provides data on searches in different countries, regions, and cities and can help you pinpoint popular topics with the most growth potential.
It also helps you understand a search queries search volume to determine if your chosen niche market has enough potential to sustain a profitable business.
Try Ubbersuggest
Ubersuggest is another excellent tool for niche research. It helps you uncover keyword ideas related to your chosen topic and analyze the competition to help you make informed decisions.
It provides a list of related keywords that can help you optimize your content for SEO purposes.
Create a Mind Map
Creating a mind map of your niche idea can help you explore the different aspects of your chosen market and uncover potential opportunities.
It’s also helpful in organizing, allowing you to map out ideas related to your business goals and strategies.
Find Passionate Communities on Reddit
Reddit is a great platform to find passionate communities related to your chosen niche.
Look for subreddits discussing topics related to your niche market and engage with the community, as this will help you understand their needs and create content and products/services that meet them.
How to Test a Niche Market
Before launching your business, testing the market to ensure enough demand for your products/services is crucial.
Here are some tips below on how to do this.
Start with an MVP (Minimum Viable Product)
Creating an MVP helps test the market before launching your full product/service.
An MVP is the simplest version of your product/service that you can create to test the market and gauge customer feedback.
This allows you to get feedback from potential customers and make adjustments before launching the full product/service.
Example:
Don’t: lease a brick-and-mortar store, develop a vegan ice cream recipe, and invest a ton of time and capital.
Do: Develop a vegan ice cream recipe, go to a dog park, and get feedback from potential customers (and hopefully some pre-sales).
Create a Website/Landing Page
Creating a website or landing page to test the demand for your business can help you gauge whether there is enough interest in your products/services.
This website/landing page can collect customer information, track visitors, and measure engagement.
Talk with Customers
Talking with prospective customers is a great way to understand their needs and get feedback on your niche idea.
You can reach out to potential customers via email, social media, or by attending local events related to your niche market (or go to where your customers are, think dog park).
This will help you gain valuable insights into what works and what doesn’t in the marketplace and make sure that you’re providing a product/service that meets customer needs.
Refine Your Product/Service
Based on the feedback you receive from customers, refine your product/service to meet their needs.
By this point, you should better understand what works and what doesn’t in the market and be able to make informed decisions about your niche business.
This will help ensure that your product/service is successful in the market and has a better chance of gaining traction.
Is a Niche Market Good or Bad?
Niche markets can be good or bad, depending on how you approach them.
A niche market can help you stand out from the competition and target a specific audience, which benefits businesses looking to find their place in the marketplace.
However, it’s essential to research before diving into a niche market and ensures you can sustain a profitable business.
When done correctly, a niche market can be very lucrative and help your business stand out in the crowd.
There’s also an opportunity to start with a niche market and, after developing a product/market fit, go broader with your products/services.
Is Niche the Same as Target Market
No, niche and target markets are not the same.
A niche market is a smaller segment of a larger market focused on meeting a specific audience’s needs.
A target market, on the other hand, is a group of potential customers who are likely to purchase your products/services.
Understanding the difference between these two terms is essential, as it will help you better tailor your products/services and reach a more specific audience.
Niche Market Examples
Niche markets are everywhere!
Here are a few examples of successful niche businesses.
Crumbl Cookies
Crumble Cookies started as a small online bakery in Utah and quickly grew into a multi-million dollar business. The company specializes in gourmet cookies that can be delivered right to your door.
It has since expanded into other states, creating a loyal customer base who love their delicious treats.
Niche Market: Just Cookies
The Container Store
The Container Store is an organization and storage solutions business that has become a home organization market leader.
They specialize in high-quality products that make it easier for people to organize their homes and have niche customers who appreciate their creative solutions.
Niche Market: Just Containers
Ties.com
Ties.com is an online store specializing in men’s ties, offering various designs and styles to suit any occasion.
They have successfully carved out a niche market for themselves and are now one of the leading retailers in this niche.
Niche Market: Just Ties
Drybar
Drybar is a popular chain of hair salons that specialize in blowouts.
They have created a successful niche business by providing high-quality services at reasonable prices, drawing in a large customer base.
Drybar: Only Blowouts
Rankings.io
Rankings.io is a digital marketing agency specializing in SEO for personal injury law firms.
They have become an industry leader by focusing on providing high-quality services to that specific audience.
Verticle Niche: SEO
Horizontal Niche: Just PI Firms
Now Find Your Niche Market
Now that you better understand a niche market, how to test it, and examples of successful niche businesses, it’s time to find your own.
Research and use the tips above to uncover potential opportunities in the marketplace.
Remember that finding a profitable niche can be challenging, but you can succeed with hard work and dedication.
Leave a comment below if we missed anything. Good luck and happy niching!
Frequently Asked Questions
An example of a niche would be organic food, fitness apparel, pet supplies, and home décor. These are niche market examples because each serves a specific audience with unique needs. For something to be a niche market, it must have a narrow focus and serve a particular group of customers.
No, McDonald’s is not a niche. It’s a sizeable fast-food franchise that serves a broad range of customers. It also has a global presence, which differs from most niche businesses.
No, Netflix is not a niche. It’s an entertainment streaming service that provides content to various customers. Since it has a broad customer base, it is not classified as one.
No, Apple is not a niche. It’s a multinational technology company that designs and sells consumer electronics, software, and services. Although it does have some niche products, such as the Apple Watch and HomePod, it is not considered a niche business.
No, Nike is not a niche. It’s an American multinational corporation that designs, develops, and sells athletic footwear, apparel, equipment, and accessories. It would be considered a niche business if it focused on selling products to specific markets, such as golfers or runners, but as it stands, Nike is not a niche business.