Infopreneurs

You may already be well versed in the concept of Niche Marketing. Or you may be just considering it for the first time. In either case, it is a subject worth studying again and again.

For those of you who already have a mature business, and you are attempting to translate it to the Internet, don’t skip this section! It will help you focus your business model in ways that will smooth your transition to the Web.

And for those who don’t yet have a clue what their business will be, this exercise in particular will help you identify where opportunity exists – and that is the first step to creating a revenue-producing business!

In a sense, all web marketing is niche marketing – even if your company is a large multinational selling a wide-ranging catalog of goods to people from all walks of life.

As we mentioned before, on the Internet, people naturally segregate themselves into groups or communities based upon their interests, characteristics, group affiliations, and activities.

Your job then is to understand this tendency, and coordinate your website and your marketing activities to take advantage of it.

There are several key advantages to Niche Marketing:

• Marketing is simplified. A relatively homogenous market means you can establish scientific and precise marketing methods to reach market members in well-defined communities and convert them to paying customers.
• Market members are relatively well informed. That means they understand the problems facing the market – they probably suffer from them as much as anyone else. So if you develop a product or service solution that successfully solves one or more of these problems, your market will immediately grasp the significance and value of your solution.
• Word-of-mouth advertising increases exponentially. A satisfied niche customer is worth his weight in gold. He will come into contact with other market members on a frequent basis, and spread the word of your solution for you. A niche market is one that lends itself well to horizontal and vertical expansion of your business. Horizontal expansion refers to offering solutions in a like field, while vertical integration refers to offering a range of complementary solutions in a single field. Niche market members are repeat buyers (assuming they are satisfied with the first purchase). They want everything related to the niche field they inhabit.

Preparing your Web Business to operate as a successful niche business requires some forethought and research. We’ll discuss the steps involved here, and then you can practice with your own business model.

To begin with, you should describe the typical customer who inhabits your target market in great detail. Include demographic and psychographic information where possible. Don’t be satisfied with superficial characteristics – dig deep. Interview past customers if you have made sales in the past, or prepare a survey to present to members of a community you are trying to reach.

The purpose of describing your target customer is to start getting a feel for that person, to understand their wants and needs, how they think, where they spend their time, and what their buying habits are.

Most importantly, a clear understanding of what they are looking for when they use the Internet is crucial.

In fact, these tasks are part of your next exercises. Once you’ve written down every descriptive thing you can come up with about your target customers, you’ll start writing down everything you know or suspect about their wants and needs. Specifically, you are looking for problems you can solve – especially problems that can be solved on a website, or with a DIGITAL product, such as an eBook. Where possible, connect the problem / solution pairs in a logical chain, typically from low cost to high cost.

Let’s look at an example:

If your target market is "homebuyers", then we can imagine some typical problems that homebuyers face:

• Locating the right home
• Calculating the amount of home they can afford
• Obtaining a loan
• Performing a title search
• Finding and purchasing homeowners’ insurance
• Finding the right mix of neighborhood characteristics (schools, shopping, freeway access, community support services, etc.).
• Identifying and fulfilling home furnishing needs
• School enrollment and scheduling

Given these typical problems, you can begin to plan revenue-generating products and services:

• Property locator search engine on your website, with tools for customizing the search (3 bedrooms, 2 bath, 2-car garage, etc.)
• Online mortgage loan calculator
• Bid system for various mortgage lenders (this is a MetaMarketing opportunity, where you can act to bring together the members of a market, and profit from each transaction)
• Professional Services referral system (custom home builders, Realtors, lawyers, title search companies, mortgage lenders, home inspection services, home decorators and interior designers, etc.)
• After-the-sale products and services, such as information products for new homeowners advising them how to pay off their mortgage early, home improvement contractor referral services, lawn and pool maintenance services, and home furnishings.

Be alert for ways in which you can chain together solutions. This is a very effective way to build repeat customers.

For instance, you start customers off with a low-cost or even free product or service that allows them to get to know you and trust your business (the property search engine or the mortgage loan calculator are good examples above). A large percentage of people exposed to your offering should take advantage of it. Then you offer a slightly more expensive product or service. Some percentage of your existing customers will move up the chain and buy this offering.

You continue to offer progressively more expensive products and services, and encourage some percentage of existing customers to move through your funnel of solutions. In this way, you extract maximum revenues from each customer according to their willingness and ability to pay. Be aware of this technique, and start outlining your product and service offerings in accordance with this principle.

Once you’ve completed an exhaustive analysis of your niche market members, their wants, needs, and problems, and possible ways you can solve those problems, you’re ready to begin identifying where you will find them on the Internet. 

(Editor's Note : This topic is covered in another place! Keep reading!)