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Learn what a niche market is and get a step-by-step guide to find one for your business.
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Before creating any marketing strategy, you need to define your niche market. You've probably heard about the importance of knowing your target audience and developing your marketing personas, but what is the difference with a niche market?
In this article, you'll find a general description of what is a niche market and why it can boost your marketing efforts. We will also provide examples of niche markets to explore and tips for finding one
A niche market is a specific segment of consumers from a broader audience with specific traits that make them unique and a perfect target for certain services or products.
Targeting a niche market before launching a more comprehensive marketing strategy can help you validate your business idea and get a better sense of the needs and expectations of consumers before scaling.
By targeting a niche market, you acquire experience that will help you refine your product for bigger audiences, prepare yourself for entering a broader industry, or set steady foundations for the future of your business.
Consider your niche market as a safe place for your product or service. If your marketing strategy isn't successful with other audiences, you can always count on the loyalty of your niche audience.
Niche markets exist across various industries, but to spot them you need to understand the needs and preferences of the broader audience. Here are some tips that will help you find a niche market.
When looking for a niche market, you must begin with a broader audience defined by essential characteristics such as demographics, geography, income, and psychographic details.
Let's use the travel industry as an example, as plenty of niche markets exist within that sector. In general, you have local and international travelers or individuals and families, to name a few big groups. Still, if you zoom in, you'll find niches like backpackers traveling on a budget, seniors going on cruises, or families looking for all-inclusive hotels.
Though all share the same goal of traveling, the approach to attract their attention will be completely different. Your product can appeal to one or the other, depending on your offering.
What are your niche market needs? The automotive industry is an excellent example of a sector that has understood this very well. Among their catalog, you'll find various models aimed at different niches.
Different types of cars satisfy the needs of specific audiences. A sports car is for someone who likes speed and has a higher income. Meanwhile, a van is for families with children who need more space for transportation.
Before jumping into a potential niche market it is important to evaluate how profitable it can be.
If you own or plan to buy a digital business, you can use tools such as Google's Keyword Planner to size the opportunity based on the search volume of the keywords you'd be targeting.
For more data, you can look into Amazon's catalog and see the type of enlisted products with their price. Websites such as Pricefy can give you a complete view of how much certain products are sold on different websites and help you monitor your competitors' prices.
Once you find a niche market, research your potential competitors and understand their strategies to find opportunities to stand out.
You can learn what's out there by using keywords on a search engine and see what pops up. Gather all the information you can find to create a strategy to help you differentiate.
When narrowing down your niche market, you'll come across different data. You can save all that extra information as a guide that will help you with your decision-making process in the future. After 6 months of launching, is it a good idea to add a new vertical? The data you already gathered can give clues.
Is it a good idea to segment your market and offer them a unique product? Pay attention to what is already there that can satisfy those needs and how profitable that potential new article might be.
Before wrapping up, we'll present some examples of niche markets that have grown in popularity in the past few years.
According to Upwork, in 2021, 27.7% of the workforce from the US were working away from the office. This new species of workers needs specific services and platforms that allow them to be in any part of the world while simultaneously reaching team and individual goals.
The tools they will need will depend on their functions. The product team will likely need access to Miro, JIRA, and similar tools, while those who belong to the sales and marketing department will need a CRM (such as Hubspot) to track their leads and customers accurately.
Digital businesses need a platform to ensure their clients' transactions will come through, give them the best experience, and at the same time offer protection during their payment process. When offering subscription plans, SaaS businesses must get the support of a secure tool to process payments securely.
Stripe is a company designed for this purpose. The platform processes payments securely and flexibly, which can suit the needs of multiple industries. Its product is designed to accept payments in various ways (such as subscriptions and buy now and pay later), manage refunds, and accept transactions in different currencies. The company's product is so useful to the market that its valuation recently was raised to $65 billion.
Data analysis has become vital in the past few years. Companies in this niche market are eager to seamlessly jump into their historical data to find previous flaws and patterns that can help them improve their future and develop algorithms for better decision-making. In 2023 the global big data market reached a valuation of USD 307.51 billion, proving the profitability of this niche market.
Tableau is a business intelligence platform that helps companies manage and visualize their data easily.
Early-stage startups face the challenge of limited resources and a lack of established processes. Departments that may be key for product development or growth will get the most significant part of funding, while areas like HR might be left out.
Platforms like Gusto solve for small companies with limited time and resources to handle HR operations. In it, people can run payroll, create HR workflows, employee onboarding, and more.
Creating workflows for leads throughout their different stages, a lead scoring system, and going through the numbers of the campaigns are just a few of the activities that the marketing automation niche market focuses on. Marketers in this field do these activities to increase conversion and retain their current customers.
Marketing experts have acknowledged how important this channel can be, which explains the increase in global revenue by 22% (USD 5.86 billion). Some niche market examples are Mailchimp, Pardot, Marketo and Active Campaign.
Your marketing efforts can be more effective when you have a detailed audience profile. At the same time, your business can save resources when targeting your niche market. Websites that prioritize niche audiences can save up to 25% on advertising.
In a niche market, it's easier for your business to be known since fewer competitors go after the same audience with a similar product or service, which can come in handy when establishing your brand and trying to stand out in the market.
When a potential client comes looking for answers you'll have an easier time popping up as one of their options.
Up to 67% of consumers rely on recommendations from niche websites. This can be an opportunity to create other revenue streams (such as affiliate marketing, brand partnerships, and more).
If your niche market had a good experience with your business, it's more likely that these new consumers trust you and are loyal to you. By nurturing these relationships, your business can gain credibility in the niche market. Around 50% of niche site users have recommended a website to someone who belongs to that market, thanks to how specific the content is.
By knowing your niche market, you can determine their product preferences, the amount of money they're willing to pay for it, the best channels to get to them, and more. Using this information for your niche marketing strategy can be a game changer, boost your income, and increase your ROI. A niche market can be so profitable that sites belonging to these businesses have a 45% higher conversion rate in affiliate marketing.
One advantage of having fewer competitors in a niche market is that you can also become an expert on your business. You'll have an easier time positioning your business as a leader in your industry since you'll be the one with all the knowledge and capable of providing solutions to the target audience's needs. As a result, this expertise can bring more customers to the business.
Remember that the key to successful niche marketing is understanding your consumers' needs and offering them a product or service that can solve their pain points.
Building and growing a niche business from scratch can be challenging. An alternative is buying an established and profitable company with a captive niche audience.
Boopos SaaS listings include companies that target specific market segments in different industries. Explore the offers available and get advice from business experts to choose the right business and close the deal at a fair price.
Related: What Is A White Label SaaS? All You Need To Know
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