Niche Marketing: The Gold Source of Online Business Success
Niche marketing is one of the most effective ways to make a lot of money on the web. It’s about taking a general market and breaking it down into specific, focused segments or niches. Solutions are then developed that meet the needs of a specific segment.
Banks, for example, operate in many niche markets. At first glance, it may seem that they focus on one market, the financial market. There is no doubt that this is correct, but banks perform many different functions serving many different niches.
A typical bank has a number of products and services, such as:
- investment products
- Mortgage loans
- vehicle financing
- financial planning and
- personal loans
Each product or service caters to a select group of people or market niche: investment products for investors, vehicle financing for vehicle owners, home loans for real estate agents, financial planning for seniors or retirees, and personal loans for people seeking short term financing.
Does this mean that a bank that offers the aforementioned services can compete equally well with all other banks in the respective service categories? In general, it is very difficult for a company to dominate all the markets in which it participates, but it is certainly possible for a company to establish a significant presence in a given niche.
Of the four major banks in South Africa, ABSA Bank is the benchmark bank for mortgage lending, Nedbank tends to be the commercial bank of choice, First National Bank is well known for its innovative products and Standard Bank for its equity trading. platform.
Whatever the business or industry, a market leader will typically enjoy a healthy income stream. And by operating in other niche markets (not necessarily dominating them), a company can easily diversify or supplement its main source of income. The same principle applies to online businesses.
Niche marketing works impressively well in the world of eCommerce. VirtualBank, for example, is an online bank that specializes in providing financial services over the Internet. Google dominates the search engine market and News24 prides itself on being the leading source of news in South Africa.
What does this mean for your online business, pick a niche, sell some stuff, and Bob is your uncle. Unfortunately it is not that easy. You can’t expect to start a new business, offer everything from A to Z, take on the major players in the market and become the leader overnight.
As a new company, you simply can’t bite off more than you can chew.
You’re not going to compete against News24 for newsreaders or against Amazon for book sales. However, it may be able to beat News24 in the sports news category or Amazon in the self-help books category.
The point is that taking on a niche market is one of the best low-risk ways to start and grow your business. There are three good reasons for this:
1. Niche markets tend to be less competitive than larger markets. Your chances of succeeding or dominating the market are much higher.
2. Niche marketing can be extremely profitable. For example, suppose your business sells books on dog training techniques for German Shepherds. Instead of designing massive marketing campaigns (TV or radio) that could cost millions, brochures and flyers placed at select dog training schools can be more than enough to attract customers to your business.
3. A niche market is a great way to build a business on a topic that you find interesting or enjoyable. It may be a good model for you to turn those hobbies or passions into a home based passive income business.
Not too long ago I received an email from a reader asking me if it was a good idea to start an online business in the mattress industry. If you take a look at the Google Keyword Tool, you’ll notice that there are over 9 million searches online every month for the keyword ‘mattress’. With search volumes like this, the chance of finding a profitable niche market and business model can be good.
Starting your business with a niche market is a good idea. Most successful businessmen will attest to this. However, The success of niche marketing depends on three basic rules:
1. Know exactly what your customers want. Your products and services must meet the unique needs of your market. Building a business around mattresses in general may not make sense if your market is only interested in mattress covers.
2. Learn to communicate with your customers. You need to understand the psychology or the deeper reasons behind your needs. In other words, speak their language and use marketing messages that evoke feelings of action.
How do your customers feel about mattress covers? What words resonate with them? If people are concerned about mattress covers ‘scratching’ against their skin when shopping, your products and services should speak directly to this.
3. Understand your competition. How will you differentiate your business from all the other players? Look at your websites, products, services, and marketing messages. Find out exactly what benefits are selling. Try to select any gaps or underserved areas in the market. How could you do things better?
Are there competitors in your niche? It can be a bad thing if there are no other players. The market may simply not want what you have to offer. Alternatively, the market is untapped and has yet to be tapped.
The key is to ask your customers what they want and value, and then test how they respond to your products, services, and brand. This precept is fundamental to niche marketing.