Chapter 1 – Why Finding Your Niche is Important
A niche is a small, specific, target market of potential customers. Smart business owners try to sell their products and services to a niche base of customers by conducting detailed market research with a focus on trying to understand the consumer behavior of the people who are interested in that niche. Specifically, their needs, concerns, and desires.
Once the research shows that consumers that are interested in the niche are willing to pay for products, services, and solutions that are related to the niche, the business will then try to cater to them as much as possible by providing a range of items for sale at various price points.
Some of the products they offer will have a much broader appeal than others. For example, there will be more customers interested in golf products for beginners, than those looking for advanced information on golf because they are or are hoping to become a pro golfer.
Therefore, by focusing on products for beginners, you will be able to increase sales based on volume by offering a lower price point to a more significant amount of customers.
However, while there may be fewer advanced students looking for information and products on golf, the exclusive, high-level information that you can provide could command a much higher price than the eBooks focusing on a beginner's level.
Offering advanced students, a course, multimedia package, coaching program, membership program, or other similar products could command a much higher price point, especially if you are seen as an expert in your niche.
This is because the more credentials you have, the more money you can charge for the products and services you are offering in your niche, within reason.
Your price point has to be within reason because finding the right niche isn't just about finding the right one that pays, but it is also about what people are buying and how much they are willing to pay for them.
If the average price they are willing to pay is $29.95 and you want to enter the market with a $39 product, there will need to be an apparent reason why your product is worth more.
Your expertise, credentials, and the added extras you are offering can help to remove some of the doubt in the customer's mind and convince them that the extra cost is worth it. However, you will only be able to convince them to pay the extra money if you know what other offers are available so that you can make an even better offer.
As you research your niche, you will not only discover if it is a paying one but if there are users who are willing to pay premium prices for the kind of insider information that you can provide.
You also want to think about the life cycle of the customer in a niche. While they might start out as a beginner, by sticking with the niche and continuing to learn, they will eventually need to obtain intermediate or advanced information.
Understanding the life cycle of your customers provides you with the opportunity to continue to sell to them over and over again.
In niche marketing, the general rule is that 80 percent of your profits will come from 20 percent of your customers. There are specific niches where it might actually by 90/10.
When you take care of your existing customers, they will continue to buy from you on a regular basis every time you have a new product or service to offer them that will meet their needs.
You can earn income around the clock by automating a process with a range of offers pre-loaded in an email marketing platform. This can then be delivered to your prospects on a regular basis.
You can create your product, set up your order flow, write your sales letter, point traffic to it, and watch your visitors turn into paying customers on your email marketing list.
With niche markets, you can have a single product that will automatically sell for weeks, months or even years to come. Once you have created a successful product, all you have to do is continue to drive traffic to your sales page.
Creating a good sales letter will help convert visitors into customers at least one to five percent of the time. That means that for every 100 visitors to your site, one to five people will buy your product.
Every niche is different regarding needs, acceptable price points, and consumer behavior. This is why it is so important to do your research long before you enter the market.
This will allow you to know if a niche will be profitable or not before you waste your time, money, and energy. This provides you with the opportunity to set realistic goals and expectations as you launch your business.
As you research your niche business, you will need to determine who your ideal customer is, what their needs are, where you can find them, if they are willing to pay for the items you feel they need, and how much they’ll pay for those products and services.
Through market research, you can determine how much your niche customers will be willing to pay for similar products.