Imagine being ignited by a business idea that seems Uber-brilliant; a next-unicorn kind of startup. We can’t wait to get moving, to test it into the market and see the response.
The problem is, after beginning at full-throttle, we come face-to-face with a harsh, but common, reality: the idea isn’t working.
Maybe it is too broad or too generic, but in your mind, you think you have it sorted out. You think you know who’s going to love your product, who’s going to spend money on it, and who’s going to endorse it.
It is all clear in your head and on the presentation slides, but then something doesn’t click. It could be timing, or it could be missing the mark on determining your niche.
The timing aspect is difficult to predict — good ideas often fail thanks to entering the market too early.
Niche, on the other hand, can be analysed before launching the product and it makes a big difference.
Why do you need it
“Niche” is landing in a just-right place in an already-noisy market. Arguably, niche is something that’s intuitive and abstract —compared to, say, the market capitalisation, for example.
Although gutsy, attacking a niche forces entrepreneurs to take a hard look on their business and the value it provides for a group of people who really use it, instead of everybody.
This consumer segment may not be dominant in the market, but tending to their needs, and providing the answer, an sustain a business in the long run.
Niche helps drive focus on the targetted market. Are there chocolate-with-spices lovers among your dessert-enthusiasts audiences? Is there a group of a recently committed-to-wear-Hijab Moms in your new, young mom audiences?
It could be anything that separates you from the bigger market while still belonging in the industry. Niche defines and strengthens your brand communication, because it speaks directly to certain people.
Niche also helps in crafting a brand personality that dodges competition. By narrowing the market to target people that will use your product often, or consistently pay for services, will set up the startup as an expert in the specific field.
Aim small to go big
Meanwhile, marketing segmentation refers to the categorization of a business market based on their characteristics. It is important because it opens new approaches. It allows companies to advertise to customers with the same characteristics, i.e. age group, geography, demography, and so on.
Many people misunderstand niche as one-to-one marketing in these predetermined segments. This mindset views niche as the occupier of a small market when it’s not the case.
Niche market does not mean small market. Niches occupy a large market share in a tight segmentation, the opposite of a small market where a business has a small share of the large slice of pie.
This rings true to Benjamin Ozsanay, the CEO and co-founder of Cookly, a cooking-class-for-foodies startup based in Thailand.
“If [a company] is serving a local audience, being a niche is hard. It’s gotta be clear from the start. If you aim to go global, then being a niche will help you to focus on what industry that you want to conquer. It did help us to dominate one industry and focus on that, which in no way would have been possible for us to start something in a broad industry like travel back then,” he added.
Niche markets enables a business to compete with established companies by becoming an expertise or specialist in a particular area, allowing it to compete fairly and reasonably as there is no way a small startup can beat an established one.
Take Cookly as an example, their industry is travel and f&b, their segment is people who seek food as a mandatory travel activity. Their niche is turning providing these people with cooking classes that greet them in countries they are visiting.
For people who want to cook local cuisine as a part of their travel experience, Cookly has occupied this niche market share. Their segment has been narrowed into targeting the characteristic of people who travel for food.
Characteristics, not just demography
First thing to do in determining your niche is to build a persona that goes deeper than just an overall demography. Who is the person that needs your product and what does she or he like?
Based on this question, the next step is to build a target market avatar.
This means analysing the gender, age group and interest traits. Who influences the person’s opinion? What are deal-breakers to the person in terms of using a product?
It can’t just be women, age 25 to 35, that is a far too popular category. Don’t go after ‘Generation Y’ or ‘Millennials’. Millennials are just a characteristic of a far more specific target audience.
For example, the recent trend in gaming is to target consumers who feel nostalgia for old consoles by building an all-in-one version of a system that was popular two decades ago. The niche is “nostalgic gamers” and, yes, they will probably be Millennials, but that is not a given.
An entrepreneur should know the age group and maybe their background, income and job, but niche begs to dig deeper.
What kind of woman is this person? What does she believe in and what does she value? How does your product resolve their pain point in terms of what they do for a living?
After laying down the audience in specifics, design a campaign that meets them where they live.
It is important to start off with a survey rather than shoot blindly, especially when you try to leverage the market. You never know what kind of response or feedback you might get if you never ask.
In conducting the survey, make sure the questions are to the point and clear, answering the urgent questions your business is trying to solve. A multiple choice style is ideal for a more measurable result to estimate numbers and predict their tendency towards the product.
After that start creating a campaign that will appeal to the group that is in favor of the product. The campaign should speak their language using their communications.
Speaking their language means presenting the campaign that ticks the list when it comes to addressing their pain points. A good example is given by Anchanto, an SaaS warehouse management startup based in Singapore.
“It is primarily about finding the ‘niche needs’ for a large number of customers at once. It is only when you find the need, you can create a ‘plug-and-play’ product that can help a lot of customers at once,” said Vaibhav Dabhade, Founder of CEO of Anchanto, an SaaS technology and integration with ecosystem players that simplifies selling and e-commerce logistics.
A focused campaign will address the niche needs, and it should appeal to certain group of people you have researched with the conducted survey, preferably those who can fall into a warm prospect ready to take action in fulfilling their needs.
Tools to define niche
Now that you know the defining characteristics of your audience and are tailoring a campaign. Let’s talk about the tools to make it happen.
Knowing what your niche is futile without confirming that the group of people actually exists and the competition is reasonable. You need a keyword to lock in the digital community to grab the search term and meet your niche target market online.
To check on keywords, Ahrefs laid ground with these free online tools available to help you kickstart your niche finding.
AdWord & SEO Keyword Permutation Generator;
Answer the Public;
Google Search Console
We recommend that you try the universal tool first: Google Trends and Keyword Planner.
For Google Trend, there’s a “related queries” section that showcases rising ‘related queries’. You can check it out by clicking the question mark icon in the related queries box that will give you plenty of unthought of keyword options that will help you set the SEO of your site.
As much as it is ancient compared to audio visual content, your audiences will still read. So why don’t you stop trying to make “no blog” happen and just go with it?
A tip to start a niche marketing blog: write topics that will set your business as the leader of the market. Talk about something that can only be found in your business. Do it consistently and don’t sleep on trends happening in your industry.
Aside from driving niche traffic to your blog (and site in general), the eventual goal is to convert readers into paying, and returning, customers.
To do this, no company escape the need to have optimised SEO so search queries can capture potential costumers and put them where they should be: on your website.
You can also give away products in exchange of social sharing, or even email address to be subscribed into your database for future campaigns. Freebies could be a How-To E-book or even a series of video-guide.
Blog should be an added tool in your already-running website.
Another side to consider — Risk
We’ve talked about the why, the what, and the how, but still niche market is what it is in essence: a niche. Fundamentally, this means it may work for certain startups in a certain industry in certain region of the world, and the other times it won’t.
According to an excerpt taken from The Economist, the trouble with a niche market that does not develop into mass markets is that they soon reach a limit.
This means entering a niche market can be far more risky compared to a non-niche market.
“We never thought about pursuing any niche market. We want to enter the big market mainly because sales tech in Southeast Asia, mainly Indonesia, remains traditional in practice even in digital space,” said Brendan Rakphongpairoj of Qontak.
Niche products may not offer a lot of diversity to create a sustainable revenue. If the original plan does not work, alternative business models might be a hard sell.
Niche markets are also more vulnerable to changes in the substance of the market environment, especially with competition and downturns.
If successful, niche market have significant edges, like almost no competition, an ability to build stronger relationship with key customers, and being able to offer a competitive price yet stable pricing structure.
Build a persona, and then find them where they are online, test your product there with a tailor-made campaign. Customize to how they best access it.
It’s abstract to say the least, but if you manage to pinpoint the niche early in your business set up, it should be rewarding down the line. After all, market surveys are a hot commodity because companies are trying to grasp the narrowest market they can define.
Remember, to build a niche, take the analysis a notch deeper.
This article was first published on e27, on October 15, 2018.