THE GAP- BETWEEN BUSINESS FAILURE AND SUCCESS
There are some business owners that have defined their niche market and have a clear picture of who it is they are marketing to. However, there are others that tend to waiver or be unsure. Often business owners view a niche market as narrowing their sales or cutting into a profit margin, so they fear it. The truth is a niche market could be defined as a component that gives your business power.
In addition to knowing everything there is to know about your niche market, it is vital to know how your product or service will fulfill a need not currently being met by another company in your industry. What makes your business so special? What is your unique selling proposition? How are you taking care of your customers? Your product and Service must be unique and solve a problem.
Just because you are in a niche market does not mean you cannot think about expansion or ways to improve what you are offering. It is crucial that you do what you do well, but do not discount the possibilities of opening your product line or serving new target markets.
However, while it is a good idea to consider expansion, it is just as important to think about whether doing so is viable.
Experimentation can lead to valuable new opportunities, but only do so if you can afford to conduct a thorough evaluation of your new ideas without compromising the quality of your existing products and the standard of your service.
- What is it that my current clients have in common?
- How do I set myself apart from the competition?
- What is different about the services or products that I offer?
- What are the "extras" that I bring to the market?
The best way to answer these questions is without analyzing them too much. Just write down whatever first comes to mind. Once you have completed them, analyze the answer, and it will be easy to define your niche market.
Your success or failure hinges on making the connection with exactly the right type of customer or client and making them realize that they need your product.
It is not enough to know the basics – age range, income, marital status – without a deeper understanding of more granular attributes your target markets might have. The smaller your market, the better you must know your customers.
Too many new small and home-based business owners do not take the time to define their target market, which means they waste time and money as they seek clients and customers. Some home-based business owners define their target market as "everyone," but ideal buyers have specific traits, characteristics, and situations that your product or service can specifically speak to.
Knowing your target market allows you to place your marketing messages where your market hangs out, using words and enticements that specifically speak to their needs.
For this reason, it is essential that you genuinely think of the customer first and make this commitment to excellence a cornerstone of your strategy.
You might think that nobody knows your business better than you, but you are wrong – your customers do.
Segmenting your market is basically breaking down the market into further smaller groups. For example, if your target market is moms who want to lose weight, segments of the market might include working moms, stay-at-home moms, or moms living in large cities.
Four common segmentation types include:
- Geographic segmentation is based on location, such as state, city, or street addresses.
- Demographic segmentation focuses on features such as gender, race, and age.
- Behavioral segmentation focuses on the benefits customers receive and how they use products and services.
- Psychographic segmentation that considers attributes relating to personality, values, attitudes, interests, or lifestyles, such as being an active runner or a Republican.
To segment potential customers into a target market, you need to answer the following questions:
- How old is your ideal customer?
- How much money do they make?
- Is your product or service most suitable for men, women, or children?
- Are they homeowners?
- Where does your target market shop?
- Where do they live?
- What type of education do they have?
- What problems, needs, or wants to do they have that your product or service will fill?
Your target market is to whom you design all your marketing materials. Not getting your target market right would be like writing a letter directed to your father and sending it to your sister. The message will not be conveyed properly, and your sister will end up confused. You will waste advertising and prospecting dollars on inappropriate messaging targeting the wrong audience.