You need to be able to paint a picture of your target or niche market - what they look like, think about, like to do and so on. The more detailed you can be, the better marketing message you can craft and the more powerful your marketing communications will be.

You may have a good understanding of your target group already - via past and present experience with clients, research you may have done, or your customer database.

If you don’t feel you understand your target or niche group, then talk directly to your clients and ask them. Ask your salespeople or receptionist for any insights they’ve gained from dealing with customers. Take a look at any client data you may collect and try to figure out patterns and similarities from that.

If you don’t have clients yet or don’t know a lot about your target group, then do some research. Check out competitors’ websites, magazines, trade publications - anything that talks about people in your niche or target group.

Take the time to understand your target or niche group and your marketing and business success will reflect this effort.

You need to understand who they are and what motivates them. You want to paint a picture of who these people are - their habits, vital statistics (demographics), their character or personality (psychographics) and their buying habits.

Let me expand on demographics and psychographics.

Demographics for individuals are their vital stats such as age, gender, marital status, education, income and so on.

In terms of businesses, the demographics would be size of company, type of industry, number of employees, gross sales, geographic locations and so on.

Psychographics are more about what makes a person tick. You can have two 35 year old men with the same basic demographic make-up but they could vary significantly in terms of their outlook, personality etc. For example, traditional versus modern, conservative versus liberal, down-to-earth versus sophisticated, bargain shopper versus impulse buyer, and so on.

Psychographics are usually expressed in terms of adjectives like frugal, homebody, cutting edge, sporty, creative and so on.

The idea is to look at your target groups’ demographics, psychographics and anything else you can find out about them, and then distill it down to a descriptive paragraph or two of your target or niche market.

For example, you may be a financial advisor/planner and your niche market is defined as:

Affluent couples in their late 40’s - late 50’s who live in the New York area and have children. They are looking for specific help with their retirement planning and they intend to retire early. As well, they are interested in legacy issues around the family money and their children, plus the possibility of setting up a charitable foundation. They are well educated, liberal minded and responsible. They support arts and educational endeavors in their city and give generously to various charities that help the city youth.

After reading the above paragraph, you get a pretty good idea of who the target market is. Your descriptive paragraphs could be similar or even more detailed depending on your product and services.

Sit down right now and write out a couple paragraphs describing your target/niche group, ideal client, key audience…doesn’t matter what you call them, just describe them!

As I’ve talked about before, a niche market is simply a narrowed target market. Developing a niche takes some time, research and thought – but the results are worth it. You start by looking at several possibilities and narrowing it down based on several factors such as the fit between your business and the niche, the possibility for growth, and so on.

Below are 4 criteria to think about and explore when trying to choose the ideal niche for your company:

1. The niche “fits” you

• your unique knowledge, gifts and strengths are a match with the niche
• you like to work with these kinds of people and environments
• you can utilize your expertise in this area and become known as an expert
• you have contacts and/or experience with this niche
• you are passionate and knowledgeable about this specific niche’s issues and problems

2. The niche market is the right size

• not too large that it is impossible (in terms of money, time and resources) to market to it
• not too large that the big companies (who have the money, time and resources) have targeted it
• not too small that there is not enough people to justify and sustain your marketing and business efforts

3. There is competition in the niche

• if there is no competition it usually means that there is not enough demand for any products and services, and there doesn’t exist potential for growth in this niche
• you need to be sure that the people in this niche know they have a problem and are actively seeking a solution
• there should be potential for prospective partnerships and collaborations with other businesses serving the same niche market

4. The niche is reachable and receptive

• you have several different ways to connect with prospects and clients in this niche – i.e. media, publications, online and offline strategies, etc.
• you need to make sure there are several ways in which you can be highly visible to the people in this niche, i.e. writing, speaking or networking
• this niche market is open to getting help and spending money on products and services to aid them

Use these 4 points as a guide to helping you choose a particular group of people to offer your products and services to. Remember that when you choose a niche market to focus your marketing on, this doesn’t mean that you can’t work with others who may come to you – via your website, speaking engagements, referrals and so on. All it means is that your efforts and resources are focused on marketing to your niche and getting really well known in your niche.

Many people get panicked at the thought of having to choose one niche only and spending the rest of their business lives catering to them. Don’t forget that marketing is a process that changes and grows as you and your business evolve. You can always refine your niche market as you learn more and there’s nothing stopping you from having multiple businesses that cater to different niche markets!

What has worked for you in trying to figure out a successful niche market for your small business? I would love to hear about it.

As a small business owner, we don’t usually have the money, resources and time to market to a large target market – at least when we start out. Focusing your efforts on marketing to people most likely to buy what you offer is the smart way to go.

That’s why a great marketing tactic is to have a niche market. Think of narrowing your niche as simply positioning yourself more closely to the people or companies who could benefit most from your services.

There are several reasons why it makes good business and marketing sense to have a niche market:

• you can focus your marketing efforts and not dilute them by trying to appeal to everyone
• it allows you to stand out as an expert in your niche which makes people come to you
• you attract significantly more business
• you have a natural competitive advantage because you can dominate your niche
• your marketing materials and communications are more targeted and therefore more effective
• people more easily refer business to you – as they have a very clear idea of who you appeal to
• you can easily determine what opportunities to say yes to and which ones to pass on
• your creativity and strengths get to shine through
• makes it easy to find suitable strategic partners and joint ventures
• you spend less money on getting your message out there because you’re not wasting time and resources on talking to people who aren’t interested in what you have

By taking the time (and the deep breath!) to narrow down your target group into a niche market that your company, products and services are best suited to serving, you’ll be making a huge investment in a successful future for yourself and your business.

Please let me know of any reasons I’ve left off and that you’ve found for justifying the time, effort and anxiety of narrowing your marketing group to a smaller niche market.

I have to admit that I’m guilty of being too afraid to choose a niche market.  From the very start, my business coach had stressed over and over again, the importance and necessity of narrowing down my target market.

I would listen and think:  yah, yah, I will do that later - right now I want and need to make some money so I’ll just offer up everything to everybody.

My thinking was that I could start “specializing” once I got well known and gained credibility.  Well, I have to tell you, that didn’t work so well.  Guess what?  By trying to reach everyone, I reached no-one.  “I told you so”, kept ringing in my head!

It’s pretty hard to gain exposure, credibility and thus customers and sales, when the number of people I was trying to reach was so huge (remember, I tried to go for EVERYONE) that:

1)  I didn’t have enough money to market to them all

2)  I couldn’t choose the “best” ways to market to them and reach them because how do I pick which forum, magazine, association, newspaper, trade paper, conference, tradeshow, etc. to use - when there’s hundreds of thousands of different ways to get at the whole world?

3)  I wasn’t able to be really clear in my marketing messages and materials about who I was “talking” to because they’re all so different - so therefore no-one knew if I’m talking to them or not!

4)  I burnt myself out because I was running around like a chicken with my head cut-off trying to be everything to everyone

5)  people had a hard time referring possible customers to me, because they realized they didn’t have a clue about what kinds of customers I work with

6)  I couldn’t figure out what kind of products to create because I could choose from about 50,000 different topics…because, ya’ know I’m going help e-v-e-r-y-o-n-e

Despite all the problems I ran into, it still just seems to go against common sense and whatever business sense I’ve got rattling around in my head - that I will be more successful, the “smaller” area I play in.

So, I’ve decided to quit listening to my common sense (at least on this one issue) and listen to my coach (otherwise, why pay her the big bucks?!) and start thinking about niches that I can really serve well, efficiently, affordably and have fun doing it.  

Okay, so now I’ve learned my lesson - I’m appealing to small business owners, such as me and you. Of course as soon as I was bragging to my coach that I chose a niche, she’s got me trying to pick even smaller groups - yikes!  I’ll keep you posted.

Let me know of your adventures with niches - send me a comment back!