5 Steps to Creating a Profitable Niche for Your Small Business
Focusing on untapped niche opportunities is often the best approach for a small business. Success is easier to attain if the small business focuses on a more specific and smaller area of its target market, especially during the start-up period, instead of covering the entire spectrum of a particular market. Today’s business environment is so competitive that a cash-strapped small business best bet is to focus on developing niche products where competition from large firms are not nearly as large.
Take the online auction market. With the market dominated by the giant company eBay, smaller start-ups are specializing and concentrating in a specific segment that the big players may not be serving well. There’s Playle.com focusing on the online trading of vintage postcards, stamps and other collectibles. Bid4parts.com is an auction site for automobile, parts and accessories. Bidz.com specializes in jewelry and accessories. PotteryAuction.com deals exclusively with potteries. WineBid.com is an auction site for rare and fine wines.
Why does niche marketing make sense for a small business? You are able to more clearly define what you – and it is easier for your prospects to understand exactly what you know. By having a specialty, you are able to demonstrate a clearer and precise image. The narrower your niche, the easier your chances of establishing yourself as the authority in that niche and for people to perceive you as the expert. Also, the easier it is for clients, prospects and referral sources to remember exactly what you do.
The more narrow your niche — and the more effective your marketing program — the more your business will soar. It’s no exaggeration to say that when you focus on one narrow niche, the sky’s the limit.
Here’s how you can create and profit from your own unique niche:
Step 1. Determine the approach you want to pursue. You can decide on your business approach in three ways: by the services you offer, by the types of customers you want, or by a combination of both providing certain types of services to certain types of clients. It is important to get a clear idea of exactly whom you want to serve and what you want to do for them.
Using the online auction business example above, you may decide to provide person-to-person auctions where you mostly deal with individuals (although some companies are also joining in the auction game). Or you may engage in commercial auctions, which feature companies selling their products in an auction format. Another type you can focus on is real-time Webcasts, which are live auctions that are broadcast to the Internet and participants can bid either from the auction premises or from the Web.
You can also choose to focus on the types of customers you want to serve. Do you want to work with coin enthusiasts? Or do you want to provide auction services for car lovers and users? Do you want to focus on customers engaged in the buying or selling of jewelry? Or do you want to focus on people who want to trade in high-brow art?
Another possible approach is to combine your choices. You can approach your online auction service by providing a particular type of service to a particular types of clients. For example, you can choose to focus on an online auction website for antique traders in the United States, or an exclusive auction website for the high-end wine dealers.
Step 2: Create a new playing field. It is important to define your unique selling proposition that will define your competitive advantage. You need to identify what makes you different from your competitors and emphasize these advantages in your marketing. Avoid the generic trap, where potential customers see you business as just one of these online dating websites.
Differentiate your business. What sets you apart from your competitors? What makes your business special that customers should come to you instead of other sites offering dating services?
Step 3: Describe your niche or area of specialization. After careful thought deciding on your niche, it is time to give it a name. The term you describe your niche should strike a balance between the need to set you apart from your competitors and to accurately describe your marketing process in terms your customers can relate and understand. Use fact-oriented descriptive words, instead of using fluff, hyperbole or combinations of nonsensical words.
The name you choose should describe your niche as accurately as possible, while making sure that the name is broad enough to encompass all the services that you offer.
Step 4. Actively market your new niche. What good is going through the difficult process of creating your own niche if nobody knows that such a niche exists? Get out there and let your prospects know that there is such a thing as your niche. Let them know that this new niche offered by your business is exactly what they need and what they have been looking for. Create the want for your niche.
Be prepared, though, to spend time educating your target market. Given the newness of your niche, your potential customers may not know what your niche is all about. They may not understand that your niche offers everything they need. Be willing to spend time and resources educating your target market.
Step 5. Integrate your new niche in your marketing messages. The last step is to instill validity in your new niche. Your prospects (and even your competitors) should be led to understand that this new niche is for real; that it exists and genuine. They need to take your newly created niche seriously, and not think that the niche is just some made-up fragment of an entrepreneur’s wild imagination.
To achieve credibility, you need to reflect your new niche in all your marketing materials. It should be clearly mentioned, even highlighted, in your brochures, websites, advertising campaigns, and press releases, even in your business cards. Constantly reinforce the message about your new niche, and how it can benefit your target market. Think of your new niche as your sound bite that you need to repeat over and over again, if only to make sure that your audience actually “gets it.”
Your new niche can offer you the strongest competitive position in your market, and paves your road to entrepreneurial success. By creating your own niche, you are able to portray the role of a pioneer and an authority in your area.
So how do you know your new niche is right? Of course, your prospects flock to buy your products or hire your services because you are different from the rest of the pack and you are offering potential customers exactly what they want.
by George Rodriguez. Brought to you by DLDesignsOnline.com
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