5 Steps to Discovering Your Niche Market

When you are just starting off any business, being a jack of all trades may seem like a good idea, but eventually you will realize that niche market is a far superior alternative. Instead of trying to cater to the entire market, you become a specialist in a very tiny niche. Focusing your efforts on a tiny market segment allows you to master that niche. You become an undisputed expert in your area and your target market recognizes you as one.

Some people may frown at the idea of ignoring large segments of the market and losing potential customers, but becoming a niche expert has its advantages. Let’s take the example of surgeons. Neurosurgeons see fewer patients than general surgeons, but they are paid many times more because very few doctors can do what they do. They are specialists, but now consider pediatric neurosurgeons. Pediatric neurosurgeons are “super” specialists and operate within a very small niche segment of the market. They are few in number and their time is booked months in advance. Needless to say, they earn more than most other surgeons.

You can also become an expert in a very small niche market. Specialists are few in number and competition will be low. People are willing to pay more for specialists, and although your volumes may be low, your revenue and bottom line will always be healthy.

Niches are created by identifying needs, wants, and requirements that are being addressed poorly or not at all by other businesses and then developing and delivering goods or services to satisfy them. To become an expert and reap the benefits of niche market, you must find the right micro-niche on which to focus.

Here are 5 steps to follow to discover your niche market:

Step 1: Determine your industry.

This step should be pretty straightforward. Your profession will be the gateway. If you are a lawyer, your industry is legal services. If you are a real estate agent, your industry is real estate. Try not to restrict yourself to a small area within your field in this step because you will be closing out options that may make sense when you consider your knowledge and expertise in those areas.

Step 2: Segment your industry into smaller micro-niches.

Now, it’s time to break down your field into several smaller segments where specialization is possible. For example, if you are a real estate agent, here are some possibilities:

Real estate -> Buying and selling -> Homes -> Luxury homes -> Penthouses

Real estate -> Buying and selling -> Homes -> Green homes

Real estate -> Buying and selling -> Homes -> Distress sales -> Foreclosures

Real estate -> Buying and selling -> Homes -> Distress sales -> Short sales

Real estate -> Buying and selling -> Homes -> Rent to own

If you have been in the field for some time, it will be easy to come up with many niches. Each area is small and you will be able to devote sufficient time and energy into any one of them should you choose to become an expert in that market segment. When you have listed all possible niches, the next step is to evaluate them.

Step 3: Evaluate each area.

This evaluation helps you analyze each niche area in isolation. You can then decide if it is worth entering and whether you have it in you to become a niche expert.

a. Sub-niches or topics. Analyze each niche. Is there enough complexity in it to make expert help valuable? For example, take buying and selling luxury homes. Is there a need for an expert over there? Possibly. Now take distress sales. Will an expert make a difference here? Definitely yes. There are different kinds of distress sales and many things that can go wrong, which makes expert help valuable.

If you are unsure about a niche, search for it in Google and see what other searches have been made related to the same subjects. You can also use the Google Keyword Tool, which will give you a lot of information about searches related to that topic. A quick look at the contents of books on the topic can also throw some light on the complexities in the niche. Stores like Amazon allow you to check the table of contents of books.

b. Pain points: People seek out experts and are willing to pay more for them when they are suffering and a generalist cannot solve their problems. Look for areas where there is pain. In addition to getting a ready and willing market and being in demand, you will also have the satisfaction of helping people in distress.

Let’s take our real estate example again. Is there any pain in buying and selling luxury homes? Possibly not, but they are bought by rich people who will be willing to pay a premium for an expert. What about distress sales? Yes, this is one area where there is a lot of pain and if you become an expert in this area, besides being in demand, people will be grateful to you for helping them salvage whatever they can.

c. Attainability. Do you have the required expertise in the field? Will you be able to help people solve their problems? If not, you must not pose as an expert, as no one will be fooled. If you have the potential to become an expert, you can work at a slightly higher level in the same segment and then slowly specialize in your chosen area. You can also consider working with another expert and eventually gain the necessary knowledge.

d. Numbers. Does the market have the potential both in terms of numbers and revenues to make entering it worthwhile? You can do some online research and check if people are placing ads to find prospects in this segment. If people are spending money to find customers, you can assume that there is potential in the area. You can also check for discussion forums, blogs and social groups related to the niche to get an idea about the demand.

Step 4: Become the authority and the source of original ideas in your selected niche.

Once you have selected your area of specialization, become the innovator for your target market. Publish and share fresh, high quality content regularly. You can distribute the same content over multiple channels like blog posts, videos, ebooks and Slideshare. If you release fresh content every week, you will become one of the top sources of original content and stay well ahead of your competitors. Look at the market’s needs, understand their problems and provide solutions. Do everything you must to position yourself as a top expert.

Step 5: Showcase your content to more people.

While most of your content will go into your own web properties, it is also important to publish content through other non-competing channels. Do guest posts. Get yourself interviewed for podcasts and radio shows. Podcasters are always looking for people to interview and with your expertise, it should be easy to be interviewed by a couple of them every month. Eventually, you will be able to graduate to premium media like TV and newspapers.

Instead of trying to cater to large markets and competing with thousands of other people, become an expert in a micro-niche and become a champion in your selected area. You will stand out from the crowd and it will be easy to attract customers. The ease of getting customers and the premium pay you get by niche market will more than compensate for the lack of a large market to which a generalist caters.