Started business

One of the biggest mistakes a new business owner can make is trying to be all things to all people. Time and time again, those businesses which focus on a select group of consumers and learn how to meet and exceed the needs of that segment of buyers grow their businesses far more quickly and easily than those businesses which take a shot-gun approach.

Identifying a niche to market to is always more cost-effective and efficient than trying to break through the clutter of mass appeal advertising. Only those businesses with incredibly deep pockets can afford to spend money on mass market appeals. Since only the people who truly want or need your product are going to buy it, why do you want to spend money advertising to anyone else?

This is especially true on the internet. With the increasing sophistication of search engine technology and the explosion of targeted websites, ezines, and discussion forums, there is really no reason for a serious marketer to waste precious dollars on people who have no interest in their product. Any time and effort you spend determining the characteristics of your best potential customers will pay off ten-fold or more.

If you already have a product or service on the market, the best place to start in analyzing what your particular niche might be is to look at your current customers. Categorize them by age, gender, occupation, how they learned about you, what convinced them to make their first purchase with you, how often have they purchased from you, and any other data you can capture.

Think about your product and what might make it unique in the eyes of your buyers. There may be regional or geographic differences, or maybe your product appeals to one type of customer because of aspect A and appeals to another type of customer because of Aspect B. Take an online florist, for example. One online florist may have discovered that funeral directors in a certain geographic region were purchasing a particular type of arrangement at a certain price point, but they could not sell that arrangement to any other segment of their customer base. General florists were not buying it, general consumers were not buying it.

The questions for the marketer once this information is discovered would be these: Are there enough funeral directors to make it worth our while to continue to offer this arrangement and can we think of additional products to sell with these arrangements to make it the focus of our business? If the answers are No, then funeral directors would not become a niche to be targeted for that particular business. If the answers are Yes, then the marketing team needs to learn all they can about these funeral directors and start testing and measuring products, ads, and offers to verify that it is a viable market.

For many marketers, a quick survey to existing customers asking them the above questions, plus some feedback on your follow-up and customer service efforts, will generate enough data that you can begin to see a pattern. If you have the email address for most of your customers, you may want to use a survey service like Constant Contact to query your customers. Or a short printed survey can be mailed to their home or given to them with a purchase. One suggestion: if you are going to send or hand-out a printed survey, you will get more response if you include a postage-paid reply envelope or give your customers some sort of incentive to reply, like a 20% discount on their next purchase or a $5.00 gift certificate to a local ice cream shop. The incentive does not have to be large, it just has to leave the customer with a good feeling about you and your company.

The second part of the analysis in determining what niche to pursue is often missed by marketers, but it is often critical to success: analyze the competition. If you do not yet have a product or service, this would be the place for you to start to come up with ideas on what types of products or services you want to promote. If you have a product, then buy the competitive products, look at their websites, look at their advertising. Talk to your customers to find out their impressions of your competition. If you can, try to talk to the customers of your competitors to see what they are doing to attract business. What do their customers like, and what don't they like. If you are still looking for a product or service to promote, it's usually best to start with an area or topic that you have some familiarity with, but it's not mandatory. Keep your mind open to what you see in the marketplace and you will begin to see where you and your business vision can fit in.

One of two outcomes will generally occur when using competitive research to determine a viable niche. Sometimes you find an area of a market that is being under-served and can create a product or service to fill that need. This can be highly effective. This is the type of strategy that produced the cleaning shower sprays that grew to dominate the bathroom cleanser market in less than two years. Those manufacturers discovered consumers wanted a quick way to clean their showers on a daily basis and they created a product to specifically fulfill the desires of their consumers. If you can do this, and truly tap into a need that is not being filled, there is almost no way you can fail. But these situations are rare and take a lot of research and effort to find.

The more common approach is to look at the marketplace and see where the competition is greatest. Generally, when you find great competition, you will find great need and you can be successful by merely positioning your product or service differently. This is why you see thousands of "make money on the internet" sites, systems, and approaches. Those marketers know that the market is large enough that simple differentiation and positioning will allow them to make a profit. The trick to making money by trying to target a audience that is being targeted by everyone else is that you have to stand out in the crowd.

Standing out in a crowd is not as hard as it might seem if you truly do your research. Take the key selling points of three or four of the largest competitors, add your own twist, and viola', you've created a unique approach. Remember, you may have the same service as the other guy, but no one else has YOU! Once you've created your unique position, it's a matter of marketing, testing and measuring, over and over again, until you get it right. With a little bit of research and lots of market testing, you should be on your way to an explosion of sales.

Good luck.

Katryna Johnson is an attorney and small business consultant with 20 years marketing experience. She runs several small businesses and is currently experiencing success with Plug-in-Profit. Visit http://www.TJCashbox.com to get involved in this exciting wealth-generating system.

Article Source: ArticlesBase.com - How to Determine Your Niche