Niche marketing is one of the most effective ways to make a lot of money on the web. It’s about taking a general market and breaking it down into specific and focused segments or niches. Then, solutions are developed that meet the needs of a specific segment.
Banks, for example, operate in many niche markets. At first glance, it may seem that they are focused on one market, the financial one. This is undoubtedly correct, but banks perform a number of different functions serving many different niches.
A typical bank has a number of products and services, such as:
- Investment products
- Mortgage loans
- Vehicle financing
- Financial planning and
- Personal loans
Each product or service is aimed at a select group of people or a niche market: investment products for investors, vehicle financing for vehicle owners, mortgage loans for realtors, financial planning for seniors or retirees and personal loans for people looking for short-term financing.
Does this mean that a bank offering the aforementioned services can compete equally well with all other banks in the respective service categories? In general, it is very difficult for a company to dominate all the markets in which it participates, but it is certainly possible for a company to establish a significant presence in a certain niche.
Of the four main banks in South Africa, ABSA Bank is the benchmark bank for mortgage loans, Nedbank tends to be the preferred commercial bank, First National Bank is well known for its innovative products and Standard Bank for its stock trading. platform.
Whatever the business or industry, a market leader will generally enjoy a healthy income stream. And by operating in other niche markets (not necessarily dominating them), a company can easily diversify or supplement its main source of income. The same principle applies to online businesses.
Niche marketing works impressively in the world of e-commerce. VirtualBank, for example, is an online bank that specializes in providing financial services over the Internet. Google dominates the search engine market and News24 prides itself on being the leading source of news in South Africa.
What does this mean for your online business, choosing a niche, selling a few things, and Bob is your uncle? Unfortunately, it is not that easy. You can’t wait to start a new business, deliver everything from A to Z, take on the major players in the market, and become the leader overnight.
As a start, he simply cannot bite off more than he can chew.
It will not compete against News24 for news readers or against Amazon for the sale of books. However, it may be able to outperform News24 in the sports news category or Amazon in the self-help books category.
The point is that taking on a niche is one of the best low-risk ways to start and grow your business. There are three good reasons for this:
1. Specialty markets tend to be less competitive than larger markets. Your chances of succeeding or dominating the market are much greater.
2. Niche marketing can be extremely profitable. For example, suppose your business sells books on dog training techniques for German Shepherds. Rather than designing mass marketing campaigns (television or radio) that could potentially cost millions, the brochures and flyers posted at select dog training schools may be more than enough to attract customers to your business.
3. A niche market is a great way to build a business on a topic that you find interesting or enjoyable. It can be a good model to turn those hobbies or passions into a passive income home business.
Not long ago I received an email from a reader asking me if it was a good idea to start an online business in the mattress industry. If you take a look at the Google Keyword Tool, you will notice that there are more than 9 million searches online each month for the keyword “mattress.” With search volumes like this, the chances of finding a profitable niche and business model can be good.
Starting your business with a niche market is a good idea. Most successful entrepreneurs will attest to this. Nevertheless, The success of niche marketing depends on three basic rules:
1. Know exactly what your customers want. Your products and services must meet the unique needs of your market. Building a business around mattresses in general may not make sense if your market is only interested in mattress covers.
2. Learn to communicate with your customers. You need to understand the psychology or the deeper reasons behind your needs. In other words, speak their language and use marketing messages that evoke feelings of action.
What do your customers think about mattress covers? What words resonate with them? If people are concerned about mattress covers ‘scraping’ against their skin when shopping, your products and services should speak directly to this.
3. Understand your competition. How will your business differentiate itself from the rest of the players? Look at their websites, products, services, and marketing messages. Find out exactly what benefits they are selling. Try to identify gaps or underserved areas in the market. How could you make things better?
Are there competitors in your niche? It can be a bad thing if there are no other players. The market may simply not want what you offer. Alternatively, the market is untapped and has yet to be exploited.
The key is to ask your customers what they want and value, and then test how they respond to your products, services, and brand. This precept is essential for niche marketing.