A niche market is a controversial topic. Many aspiring entrepreneurs don’t believe a niche will help their brand win more customers. What? There is no way a smaller market will make us more successful, they say! At first glance, there is little logic in this concept. However, experts agree that narrowing the market can actually help you find customers who seek your services.
A niche that focuses only on a certain segment of the market, allows you to concentrate all your energy in one direction. Imagine a magnifying glass and a source of light. Thanks to the lens we are able to direct the rays so that with a little patience, we can start a fire. Otherwise, the sun will fall on the pile of leaves, but you will not able to roast a sausage. This lens is our niche, light is our activities. If we condense them well and point them in the right direction, we will be able to enjoy the desired results.
What is a niche market?
In short, it is a place on the market that lacks a product that we can offer. This is where the audience whose needs have not been filled yet, spend their time. This is a place where competition is very small or we simply have an advantage over them.
A niche allows even small entrepreneurs to become the first choice for people. Place where they come when they have a specific problem to solve.
When thinking about a niche, we should keep in mind our own skills, market saturation, customer needs and entry difficulty.
Why is niche so important?
A niche allows you to occupy a part of the market and become a leader or at least become a well-recognizable brand in the chosen category.
If there are companies in the area of your expertise, that have been there for years and have settled down well, it may take you a long time to get noticed. Not to mention how costly it can be.
If you a business consultant, you have to compete with thousands of other people in your field who are cheaper or simply more recognizable. In this situation, without a niche, finding an asset that would motivate your client to choose you over the others, can be really difficult.
The solution to this problem can be a narrow specialization – products or services that are in demand, but few people offer them or have limited knowledge in this area.
Let’s assume that you are an architect with a passion for photography. You decide to give it a try and start building a personal brand as a photographer. The combination of these two features can make clients from the real estate industry trust you more. Because they will be sure that you understand their problems and can approach the tasks from the right perspective. You don’t only take stunning photos of their properties that help them get more clients, but also create a bond based on partnership and understanding. Your experience in both fields makes you an expert with a rare set of features who they will gladly entrust with ambitious tasks.
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Niche lets us to stand out
If you think that everything has been already invented, you are not far from the truth. So, how can you find a narrow specialization in this situation that will additionally bring you sufficient income?
If you look at people who have already chosen, they may realize that they don’t do anything entirely new. Often they managed to simply combine several elements that resulted in something that others did not come up with before.
A good example is Nuud – a brand which sells vegan cream antiperspirants. There are more and more cosmetics on the market that do not use any ingredients of animal origin, but Nuud went a step further. It sells the products in biodegradable pink tubes, and the distribution is only by post. Those who want cruelty-free armpits can order a regular delivery and not worry about running out of antiperspirants ever again.
The combination of these elements, plus interesting and original branding made Nuud quickly become a recognizable brand that won the hearts of returning customers. It addressed a niche in which became a leader. If you are looking for vegan antiperspirants delivered to your home, you will probably think of Nuud first.
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If a niche market is so important, why few people choosing it?
It may sound trivial, but many people are not even aware that something like niche exists and that they need it. Although we see all kinds of specialized companies everywhere, we rarely think about it. But reading this article you’re already one step ahead.
We don’t know how to choose a niche market
Choosing a niche is not so simple. We need to get to know ourselves, the market and the target group that could be interested in our brand. For many, these three components are quite difficult to integrate. This is mainly due to the fact that few of us devote enough time to this issue. We focus on the good old ‘let’s wait and see’.
Indeed, sometimes it works. We can wait for something to happen, but do you really want to entrust the future of your brand to faith? Believe me, it’s better to make a research and plan the thing out. It is important to know the market, competition and the assets that will allow us to meet the need of our potential clients.
We don’t know if our niche has a chance to bring you sufficient income
This is one of those things that send shivers down your spine. And pretty much you’re right because you don’t need a niche that does not bring any income. It has been widely known fact that the narrower niche is better, but also it has its limitation. And is connected to market demand.
We can offer business coaching in a village in the middle of nowhere. But we quickly realize that there is no potential to grow in these small, limited market. Narrowing a niche to this area alone would not be a wise move.
So before you choose the direction you want to go, make sure your niche has an optimal size.
What are the types of niche markets
One of the signs that it has potential, is the lack of similar services in your location. If you live in a medium-sized town, where there are no cafes, where families with young children could come and spend carefree moments, it may be a good business idea.
And if you live in a big city, where there are already several such cafes, look at what their clients say. Maybe they lack something. Maybe they have additional needs that were not fulfilled so far. In this case, this additional element must have a specific value to your customers. Something that improves the whole experience, and is not just an interesting addition.
There may also be a need for products that are not yet on the market. Nowadays it may be difficult to be innovative, but maybe, by observing what you or people around you are missing in their lives, you will come up with a truly brilliant idea.
The popularity of vegetarian diets is increasing. The creators of Beyond Meat knew this and created a product that resembles meat. Some of their burgers even bleed. Of course with beetroot juice. It’s a niche in a niche because vegetarian products are still much less popular than traditional ones. However, products that look and taste like meat rather target people who chose a plant diet primarily for ethical reasons and are lacking the taste of a real burger.
They also knew that growing awareness around the benefits of a plant-based diet will make them a leader in their field and be a strong brand when the market of vegan products reach its pick.
Niche is a broad topic and certainly requires more attention. Therefore, the above article is only the first part. Do you have more questions about niche market? Leave a comment.