In order to create a successful digital product, it is crucial to identify the right market niche. After all, it is impossible to create a product or service that meets the requirements of all audiences at the same time.
You will be able to determine the audience with whom you are going to communicate as well as the strategies you are going to use to persuade those people to buy your products and services when you define a niche for your business.
A market niche can be defined as a segment with its own peculiarities and a segment with an audience who share similar interests and profiles.
This can be a broad term, such as “sports equipment”, or a more specific term, such as “protective equipment for skiing”, for example.
The niche aims to determine not only the buyer persona for your product, but also explore new markets, and seek to meet the needs that have not yet been met, or to compete against the companies that are the strongest.
Did you know that Roy Dickan created the Niche Domination method exactly for that purpose, helping businesses define the right niche? Perhaps you haven’t heard about him, but you should have a look at the method. It will be really worth your time.
If you analyze big brands like Amazon, you will realize that they work with a very wide range of products and services. This means that the customer base in this type of eCommerce store is also very diverse.
By using this business model, you can reach a 20-year-old who is interested in fictional literature, as well as a 40-year-old programmer who is searching for technical inputs from an author.
The Eleiko brand, on the other hand, provides bars and platforms that are designed to accommodate athletes and professionals who practice Crossfit. That’s a very specific example, doesn’t it? With a unique product and a smaller target audience, the business in this case is able to act more assertively, since it has a lot of interest.
How important is it for your business to determine the right niche in order to have a successful business? In order to get a better understanding of how niches can help you to have a successful financial return, we are going to examine four different types of segmentation: geographic, demographic, psychographic and behavioral segments.
As the name of this type of segmentation suggests, it is based on the location of your target audience, and it is based on knowing and analyzing their geographical conditions based on the physical location of their homes.
Geographic segmentation is generally used in conjunction with a type of marketing strategy known as Geo marketing and is primarily used by small local businesses, but it can also be applied by large organizations that are opening new branches or franchises in new countries or cities.
An important consideration is an age, gender, religion, income level and level of education. All of these factors can have an impact on certain habits of the public and, in turn, on the purchasing power of the general public.
Not to mention that they will also determine how you should speak in your communication strategy and what words to use.
In this case, you are likely to find a niche determined by the lifestyle of the people you want to target, as well as the values, personalities, and even ideologies that exist among them.
As a result, it is very common in companies that sell vegan foods or organic foods, as well as in stores that sell products related to a certain musical genre and way of life, for example.
Segmentation based on interests is a method of segmenting that is commonly used in digital environments and is based on the artificial intelligence of a variety of platforms such as Facebook or Twitter in order to map the interests of consumers.
With this segmentation, you are able to communicate with users who are interested in topics that directly relate to your company, and you are also able to increase the possibility that people will interact with your brand at the same time.
There is a difference between this kind of targeting and behavioral targeting, as it represents interests that could potentially become habits even if they are not right now.
In the behavior-segmented niche, consumer habits and behaviors are used to identify the niche’s potential.
In this case, the purchase history of a certain consumer is taken into account, which means, the types of products that he or she usually consumes. The general public of these niches is often interested in the benefits the product or service will bring to their life.
Sports clothing and accessories ads are a good example. Running shoes are another example of a niche that is used very often by delivery ventures.