Finding a niche area of a broader market and serving it successfully can help a business to drive growth and sales in the long term. While mass markets can be lucrative, they are typically more saturated which makes it difficult for smaller enterprises to compete against larger rivals. Finding a niche can also help you to differentiate your business from the rest and offer a unique, compelling product or service to audiences.
Identifying a specialized area is not always easy, but it’s worth putting the time and effort into finding a unique pathway and roadmap for your business. Branding mentor expert Charlene Walters recommends beginning the search for a niche by looking for areas that could be a springboard for success and give you an opportunity to excel. This niche should still be in your “wheelhouse”, an area of expertise.
Walters note: “[A business niche] is a hole in the current market where the business’s USP (unique selling proposition) will be appreciated by a select group of customers, or target audience.” The audience that would appreciate a niche typically feels like there is something missing from current offerings in the market.
However, they may not know what that is.
The best niches are often those that only you recognize need filling in the market and that quickly become essential thereafter, which puts you at the vanguard of a key industry movement. Don’t set expectations too high from the outset though as it may take time to work through different ideas.
How to find the right niche?
Identify unmet needs in the market
There are niches in every industry, but you shouldn’t just pick one at random as you could just be pursuing something that has no market reach or potential. Defining an unmet or underserved need in your industry is a good place to start. Are there any gaps that your product or services could fill, and will the market want them? You can brainstorm a few ideas from potential niches based on these criteria for your industry and then select several that are viable based on your company’s knowledge and expertise. Identifying subtopics from these broader niches can also give you ideas to explore.
Reflect then research customers and competition
Taking a look back at the history of your company and its many successes while reflecting on its culture and passions can guide you when looking for a niche to double down on. Do any of the unmet needs identified earlier make more sense for your business and align with its culture and goals? You can follow this up by researching potential customers for a few of the viable niches. Things to focus on include buying patterns and behaviors, and just as importantly, the needs and motivations of potential audiences.
You need to exploit a gap in the market so what competitors are doing is also important. A new niche might require a tweaked product or service. Who will you be competing with potentially, and what are they currently offering? Tools you can use to conduct competitive research include Google Trends, Google Keyword Planner and Amazon. Also, look at what people are saying about your potential competition on social media.
Calculate potential profitability
Niches need to be more than just a great idea or product; they need to be profitable. You can calculate whether it will be lucrative for your business by looking at the prices of products you will sell and the quality you will need to uphold to make money. Factoring in customer demographics, addressable audience size, and your own scale of investments into a niche will give you a better idea of whether it is the right one for your business. The final phase is to start testing a new strategy for the niche.
Define niche and start succeeding
Reaching the top of a niche for your business is the next step and you can look at case studies of successes as inspiration. Patrick James of Trico Group, who serves as its CEO, founder and owner, helped the global automotive parts manufacturer to dominate in the automotive industry by leveraging its tech and engineer capabilities in specific niches. Creating products that people really want and following through with excellent customer experiences can really help to set your business apart from the rest.
One other area that is vital is marketing. You need to transform your marketing activities to support your pivot to a new niche. You can do this by publishing content that showcases brand authority and leadership and targets the B2C and B2B audiences that you need to engage to generate leads and increase sales. Tailoring your marketing strategy to your niche is also key. For example, a podcast may be best for reaching a small, dedicated audience online.
To conclude, identifying a niche and specializing in a specific area of your industry with high-quality products or services can be the catalyst for growth. If you are tired of being an also-ran in a crowded mass-market, exploring a new niche could finally unlock your potential as you serve a loyal and engaged audience and achieve long-term success.