To market your business, you need to know your niche
Understanding your ideal customer will help you identify your market niche. Presented by Chase for Business.
In the business world, “niche” means something special. Picture a specific slice of the market, packed with consumers who have very particular needs. Think of pet owners, but not just any pet owners — those who are all about zero-waste products.
This is known as a niche market. It’s a more focused group within the wide ocean of potential customers. They may be a smaller set of would-be buyers, but they often form a loyal customer base that’s more passionate about what they do or where they choose to spend their money.
When you want to develop a new product or service for your business, it can be hard to determine which audience you’re trying to target. Businesses often focus on making a product that complements their existing offering or is similar to what's worked in the past. But this approach doesn’t necessarily spell success for something new. And it doesn’t mean you’re hitting the mark with what your target audience actually wants and needs.
That’s why understanding and identifying your business’s niche is so important. When you can make a high-quality product or service that’s the perfect fit for a group of people, you become their trusted go-to. That’s how you can stand out from your competitors.
Understand your niche
Businesses identify niche markets by homing in on specific consumer traits. For example, people in the market for a new car can be divided into a host of niche target markets, based on their specific traits and needs.
Let’s see what these traits and needs might be and how each applies to the car market:
Demographics: Older consumers may want to prioritize safety in their next vehicle, while younger buyers might prefer something flashy. And buyers who live in the country likely have different priorities than those who live in a city.
Psychographics (i.e., values, opinions and interests): Environmentally conscious consumers may prefer electric vehicles. And “gearheads” interested in Formula 1 racing may seek out manual transmissions.
Geography: Residents of remote areas could prefer four-wheel-drive vehicles or those that are better able to navigate winter storms. On the other hand, urban drivers may avoid large vehicles that are difficult to park on city streets.
Price: Individuals with a lower income might be restricted to used cars. Other cost-conscious consumers may seek out vehicles that get great gas mileage.
Quality: Buyers with a lot of disposable income may prefer luxury vehicles with all the latest upgrades and finest finishes. Others might opt for car manufacturers known for their precision engineering and stellar safety record.
Every industry has its own niche markets to explore, and each one is different.
Do your research
Finding your niche requires a good deal of research, along with your time, energy and resources. To dial it in, consider these key points:
Consumer data: Identify trends that may help you focus your vision. Who is your ideal customer? What are they passionate about? Where do they live? How much are they willing to spend? What level of quality do they demand?
Competition: By analyzing competitors, you can find ways to make your unique selling proposition stand out. Think about new features or functionality that your product or service can bring to the table. Also consider the consumer pain points that your product or service can address.
Financing: Think about cash flow forecasts and the approximate funding needed to reach profitability. Make a business plan, if you haven’t already, so that you’ll have a clear sense of your road to success.
Growth: What are your long-term goals beyond this niche? Can this market open up new opportunities for your business in the future? It pays to answer these questions early so that you’re prepared to seize growth opportunities as they arise.
Thoroughly taking these considerations into account at the beginning can help you secure a more profitable niche down the line and find new ways of marketing a business.
Factor in product-market fit
Once you’ve defined your niche market, you can work on developing a customized product or service to meet your customers’ needs. This is known as a “product-market fit.”
The better your product-market fit, the more likely people from your niche market are to purchase what you offer. This is why it’s crucial to understand whom you’re selling to, what their unique needs are and how you can meet those needs in better ways than other competitors in that market segment.
Of course, developing the perfect product or service for a niche market is only half the equation. Marketing your business to your niche customers is the other half.
Target your market
In this digital age, it’s easier than ever to target content to your market. Creating brand accounts on social media platforms allows you to directly connect with your specific audience through hashtags or by paying influencers to promote your business. You can also use search engine optimization. How? Conduct keyword research and create online content — blog articles, social media, podcasts, videos and more — that will rank well in searches for specific terms your target audience is looking for.
Find the right partner
There are other steps you can take to strengthen the financial health of your business. Interested in learning more? Reach out to a Chase business banker today.
