how to start a small business (Chapter-2)
Chapter 2 – Why Finding a Niche is So Important
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 target audience that is interested in that niche. Specifically, this addresses their needs, concerns, and desires.
Once the research that you conduct shows that consumers are interested in the niche product or service that you are planning to sell, then you can start to cater to them as much as possible by providing them with a range of items for sale at various price points. When it comes to niches, you have to remember that some of the products will have a much broader appeal than others. For example, there will be more customers interested in golf products for beginners, than customers looking for advanced information on golf because they are hoping to become a pro golfer.
Focusing on products for beginners will help you increase sales based on volume by offering a lower price point to a more significant number 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 that focus on a beginner’s level. You can offer advanced students a course, a coaching program, a multimedia package, membership program, or other similar products that can 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.
You have to keep your price point within reason because finding the right niche isn’t about finding the most profitable one, but also about what people are buying and how much they are actually willing to pay for their problems to be solved. 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 credentials, expertise, and the added extras that you can offer can undoubtedly help to remove some of the doubt that a customer might have and convince them that the extra cost is worth it. However, you will only be able to persuade 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 discover if it is a paying one, as well as if other users are willing to pay premium prices for the kind of insider information that you can provide.
Another thing that you need to think about when researching your niche is the life cycle of the customer in the niche. While they might start out as a beginner, if they stick with the niche and continue to learn, they will eventually need to gain intermediate or advanced information. Understanding the life cycle of your customers will provide you with the opportunity to continue to sell to them over and over again. With niche marketing, the general rule of thumb is that 80 percent of your profits will come from 20 percent of your customers. When you take care of your customers, the chances are much higher that they will continue to buy from you regularly. They are also much more likely to purchase the new products and services that you offer them that will meet their needs. You can start to earn an income around the clock by automating a process with a range of offers that are preloaded in an email marketing platform that can then be delivered to your customers and prospects regularly.
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 when you focus your efforts on a single niche market. With niche markets, you can have a unique 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.
Every niche is different regarding needs, price points, and consumer behavior. This is why you need to do your research before you choose which niche to market. This will allow you to know if a niche is not only viable, but also profitable before you waste your time, energy, and money. This can help you to set realistic goals and expectations as you launch your business.
