Learn how to find a niche market and successfully grow a business within it.
Trying to launch and grow a business in a market filled with competitors can be a difficult row to hoe. One way to stand out from the crowd is by focusing on a niche market. A niche market is a hyperfocused target audience that needs a specific product or service. Identifying the needs of a niche market can be an easy way to come up with a business idea for a successful product or service.
One business that took this approach is Artisans List, an online directory that connects people with traditional home restoration, craftsmanship and farm-to-table resources. Instead of creating a digital platform that served a vague market, co-owners Cindy Bogart and Mary Gervais found a profitable niche industry that lacked an online presence and capitalized on creating one. Bogart and Gervais founded Artisans List in 2017.
Why a niche market is good for business
Trying to break into a large marketplace and build a successful business can be very difficult. When you have numerous competitors all vying for the same customers, it's tough to win brand loyalty, especially if those competitors are large corporations that have a strong following.
A niche marketing strategy, on the other hand, can give you more freedom for trial and error. With fewer competitors to work against, you have a better chance of capturing your audience and winning their business. You can also speak more directly to your consumers. Finding a niche market allows you to tailor your marketing efforts in a way that your audience understands.
"We felt that, by being niche, we attracted the vendors and customers who were specifically interested in old home restoration, craftsmanship and farm-to-table sources, and this lifestyle, so now we have a captive audience," said Bogart.
When your business strategy serves a specific purpose for a unique audience, your consumers are more likely to find your product or service useful. Focusing on a specific market can help you become an expert in your field and differentiate you from the large brands.
"As far as growth is concerned, we own our niche, which gives us a higher rate of return, because most of our vendors offer unique services, handcrafted products, or homegrown food items that are not mass-produced," Bogart told Business News Daily. "Perhaps you might find a few on Amazon, but that is a needle in a haystack search."
How to find a niche market
The first step to creating a successful business model is finding a profitable niche market that you can successfully serve. Begin by analyzing the current marketplace and noting holes where needs could be better served. It may be beneficial to look at your own consumer habits and see if you have a need for a product or service that isn't currently available. This is what Bogart and Gervais did to formulate the idea for Artisans List.
Bogart and her husband were renovating their Rhode Island home when they noticed the lack of local restoration services online. The only way they found people in the restoration industry was by local word of mouth.
Although they found qualified restoration services, it was much harder than the simple Google search that today's consumers rely on. It was clear to Bogart that the vendors in the restoration trades had one thing in common – they were too busy working to figure out an online marketing strategy.
Bogart realized there was a real need for an online niche directory and community that could connect these small businesses with consumers like Bogart. Artisans List was born.
How to create a niche market business
Turning your idea into a product or service takes time. It is essential that you take the proper steps to create the best product and achieve optimum success.
1. Connect with individuals who have similar interests or goals.
To bring an idea to fruition, you may need to enlist the help of other resources. If you are not able to create, market and sell the product on your own, consider which associates you could team up with. Choose people who have a similar interest or stake in the product and can help you focus on your niche market.
Bogart did this by reaching out to Gervais, who was a former small business owner and the head of Rhode Island's Women's Business Center at the time. Bogart's creative talents paired with Gervais' strategic business skills were pivotal in the success of Artisans List.
"Our team is effective due to complementary skill sets," said Gervais. "We trust each other implicitly and are confident that we both have the best interests of the business at heart."
2. Refine your business idea.
Once you've established a team, work out the details of your business idea. Identify your audience and the needs that your product should serve. If there are competitors in the industry, note who they are and how you can improve on their products.
To form their business strategy, Bogart and Gervais started by identifying the realities of how traditional artisans and professionals functioned. They detected the main issue that these professionals faced: They needed an online presence but did not have the time or understanding to create one. They wanted to create a digital platform that was quick and easy to use.
"All of this fed into how we developed our overall concept and how we designed the directory," said Gervais. "We also knew that we needed to add some basic business practices not often used in online businesses, the most important one being personal customer service."
3. Personalize your business approach.
An important step Gervais recommended when getting your niche business off the ground is personalizing interactions with consumers. Personalized service is critical. Since you have the luxury of knowing who your direct target audience is, you can tailor your customer service to match their expectations.
Bogart and Gervais noticed Artisans List had two primary audiences: the vendors on the list and consumers viewing the site. Since both target audiences were equally important and ranged from internet newbies to tech-savvy gurus, they heavily considered the needs of both audiences to develop their site and tailor their customer service approach.
"We've taken a very personal approach in how we work with vendors, and that is something they understand versus a mass communication," said Gervais. "We have vetted and sourced each business individually. It's a lot of work, but that is what makes us stand out."
A checklist for dominating your niche market
When creating a niche-market business, stay focused. Keep your primary goals in mind and be sure your message is clearly conveyed to your target audience. Perform frequent business analyses to ensure you are serving your audience in the best way possible.
In addition to staying focused, Gervais recommends following a checklist, such as the one below, when creating a business in a niche market.
- Identify an underserved segment of the market and tailor your products or services to them. Segmentation is key. Take a deep look to understand and know your customers.
- Ask yourself, "How can I solve my customers' problem?" and "What makes my business so special or different?"
- Assess how you are going to market to this specific audience.
- Keep tabs on your competition.
- Be open to new opportunities, like expansion or product improvements.
- Be specific, distinctive and relevant.
- Listen to your customers. Ask them for feedback and rectify any mistakes immediately.