I’m thrilled to share this guest post by Danny Starr, Vice President of East Coast Sales and Marketing at Roam Mobility. Danny is a digital marketing veteran. He was around when email marketing was the “new big thing” and has seen the landscape evolve as both a marketer and a participant in social media over the years. He blogs at www.dannystarr.com and is active on Twitter at @dannystarr.
Niche markets get no love. I believe that the reason for this is that we think about larger markets more naturally because they are easier to see. I also think that we are continually being pushed to think about the “big picture” in business and this means that we often look for large markets that will lead to huge revenues and therefore huge profits. We are pounded by mass-market messages and we rarely read blogs dedicated to niche marketing.
The reality is that niche markets are all around us and we interact with niche marketers more often that we think. The rise of internet marketing has meant that niche markets have never been easier to reach and by properly managing your marketing budget, extremely profitable. Pursuing a niche market is a wise strategic decision because these markets exist when customers have a problem that is not being served by existing solutions. More often than not, this problem is a result of mass-market incumbents either not recognizing or caring to solve the issue. For example, I am currently working for a mobile carrier that helps customers save on roaming fees. Our company is able to provide value to travelers because the major mobile carriers in Canada seem to prefer charging extremely high roaming fees. You’d think that a clear value proposition and growing discontent in the marketplace is all that you’d need to be successful but this isn’t always true, and especially with niche markets.
One of the first things you need to do to be successful is segmentation. Of course, segmentation is always important but it is critical in niche marketing because it will help you allocate your marketing budget as efficiently as possible. You need to invest the time before you even consider launching to match your product or service attributes to the potential audiences. You can do this by developing a clear profile of each customer type and evaluate the attractiveness of your product or service to each segment of buyer. Being able to do proper market research won’t always be possible so don’t be afraid to do something as simple as asking people their thoughts or conducting a short survey as you will often find that you learn valuable insight from even the smallest sample group.
Then, use these profiles to get inside the mind of your target audience(s). I think that marketers often forget the importance of brainstorming. Get in a room with your team and talk about these people. Think about how they make buying decisions, where they go for information about products/services and what types of activities to they enjoy. Go through each step in the buying decision and do your best to be visible at each of these stages or contact points. This type of information will prove invaluable when you are developing your marketing communication strategy. One of the best things about niche markets is that by engaging the right channel partners, you can achieve amazing returns. Niche markets are often dominated by only a few potential channel partners because smaller markets can’t often serve a large number of firms, so my biggest piece of advice here is that you must be able to communicate the value proposition to your potential customers and the value proposition to channel partners in a clear manner. Develop materials such as datasheets and web pages dedicated to your channel strategy so that you can help them understand the value of your product or service.
If there is one area where internet marketing really shines it is with niche marketing because you can use the web to access your audience while keeping your costs to a minimum. Of all the tactics, the two most important for reaching niche markets are often paid search and affiliate marketing. Paid search allows you to purchase specific keywords and if done properly, will allow you to zero in on specific terms for only pennies a click. Affiliate marketing is also extremely powerful and I am always shocked as how few marketers understand it enough to prioritize it among their activities. Affiliate marketing is great for reaching niche markets because you are lowering your risk by letting a large network of affiliates who have already developed an audience in your niche market your product in return for a commission on the complete sale. Some affiliate marketers are extremely gifted in content and search marketing and are better able to develop strategies for hard to reach corners of your audience.
I also recommend email marketing, however I think you should look to strike deals with partners to share profit from sales instead of straight list rentals as this will keep not only your costs down but your risk as well. Put it this way, if somebody thinks their list is so great that they want to charge you for access to it, they should also be confident in how it will respond to your offer. The same goes for banner ads on sites… consider proposing an affiliate relationship instead of a straight pay for space deal.
In many ways, approaching niche markets isn’t all that different from approaching larger markets. It’s more about how to adjust your thinking and what types of opportunities you are looking for to market you wares. In the case of niche markets, thinking small is good!