A big mistake that many small business owners make is to latch on to the next big thing without first understanding the market and what it wants (not what it needs). If you try to sell something that people don’t want, they just won’t buy it. It’s that simple.
A profitable market consists of people who have problems that need to be solved, so much so that they will jump through hoops to buy products and services that take away all, or even some of their pain.
Ask yourself the following five questions to get a thorough understanding of your market:
- Are there segments in your market that are being underserved?
- Are the segments of your target market big enough to make money?
- Is there too much competition for you to be competitive?
- What are the weaknesses with your competitor’s offering that you can capitalise on?
- Does your market want or value your competitive advantage or even recognise it as a unique offering?
To market a business with a limited marketing budget successfully; you need a laser-like focus on a narrow target market, sometimes called a niche.
When we say a niche, we’re referring to a tightly defined portion of a subcategory.
Let’s use an example of the marketing services category. It’s an extensive category. A typical marketing company like ourselves would potentially offer a range of services, including; Sales Outreach, Google Business Profiles, Website Design, Brochure Design, Content Marketing, Google Ads, SEO and so on.
By focusing on just one of these services, such as Google Business Profiles, you would effectively be selecting a niche subcategory. This is narrowed further by defining other specific market segment information. The target market focus would then become; Google Business Profiles for B2B manufacturing companies located in the North West, UK. That’s an example of a tightly defined niche.
At this point, you’re probably thinking, why the heck are you telling me to limit my market so much?
Two reasons why you need to pick a niche:
- You have a limited amount of money. Your marketing message will become diluted and weak if you focus too broadly.
- The other critical factor is relevance. The goal, when it comes to promoting what you do, is for your prospects to say, “Hey, this is for me!”
Being all things to all people leads to marketing failure. This doesn’t mean you can’t offer a broad range of services, but understand that each subcategory must be a separate campaign.
Targeting a tight niche allows you to become a big fish in a small pond. This would allow you to dominate a category in a way that would be impossible if you adopted a generalist approach.
The type of niche that you need to go after is an inch wide and a mile deep. An inch wide means it’s a highly targeted subsection of your target market. A mile deep means there are a lot of people looking for a solution to the problems you solve. Once you dominate one niche, you can jump on the next profitable and highly targeted subcategory, and then dominate that one also.