When a new business is started, the market niche’s choice is necessary to elaborate on the entire marketing strategy. Also, with a well-defined market niche, you can allocate resources much more efficiently.
The market niche is a part, slice, or portion of the market in which your business and products can operate. More specifically, it segments a smaller group of customers within a larger group, however, with more specific interests and needs. Typically, the more specific a niche market is the less competition. But, on the other hand, the number of potential clients also tends to be smaller.
Many people still confuse the difference between market segment and niche market. To clarify them, let’s take an efficient example. Within the boardsports segment, you will be able to work with specific niches:
- electric skateboard
Therefore, the segment is the largest market share, while the niche is a slice of the segment—that simple.
When you study and analyze the available market shares, you can focus your efforts on the one where you are most likely to succeed. Whether due to the low number of competitors or your business’s technical knowledge, the important thing is to know this potential client’s pain.
Why you should define your market niche
Niche market advantage #1: Less Competition
Look for the blue oceans! In the book Blue Ocean Strategy by authors W. Chan Kim and Renée Mauborgne, the authors describe companies that have found specific niche markets, without competition, with a large target audience and high-profit margins. These untapped markets are the so-called blue oceans. Meanwhile, the red oceans represent already saturated segments.
There is no mystery: it is imperative to have competitive advantages in your e-commerce, taking care not to enter saturated niches. So direct your efforts to, first of all, find untapped markets. This way, you will be able to grow much more quickly!
Niche market advantage #2: More loyal customers
Not only due to low competition, but precisely because you work with a smaller audience. With a smaller audience, you can personalize your service and give more attention. This makes your audience more qualified to meet your offer, as you meet your requirements. Therefore, it is easier to make sales more frequently to the same customer.
To help in the process, try to think like the customer, putting yourself in its shoes. A simple framework can help you layout your customers’ thinking.
- What do they think and feel?
- What are your pains and needs?
With these answers, it is already possible to draw a good profile.
Niche market advantage #3: A most engaged audience
When you focus your business efforts on a specific niche, these customers will not rely on outside motivation to follow your work.
Soon, all your content production, be it ads, social media posts, or blogs, will find an interested audience. After all, your company will show that it knows and understands these customers’ needs, as never before.
So, these people will follow, like, interact and share this content, generating engagement. Engagement on social media produces social proof. The more involvement, the more it will show that you are an authority in your market.
Niche market advantage #4: Brand strengthening
We have already talked about public engagement, social proof, and the authority it generates. When you attend to such a specific pain, your brand will undoubtedly be remembered for that—the famous word of mouth marketing.
Gabriela Damaceno is a journalist and digital content specialist at Evolve Skateboards.