People often freak out when they are asked to identify a niche. Of course, the reason that most people freak out is because they assume they have to change everything about their business right now. They are terrified that they will have to change their logo, their font choice, they’ll have to dump most of their current clients, reword all of their marketing materials and website, and divorce their spouse etc.

So, as you go through this virtual workshop let’s build on these assumptions . . .

FIRST: You can be explicit without being exclusive.

Just because you’ve picked a niche doesn’t mean that you can’t work with people outside of it. Let’s say you’re a massage therapist who focuses on pregnant women. That doesn’t mean you can’t also massage men or elderly women – it just means that you aren’t targeting them. It means that the bulk of the people you attract will be within your niche, but you will still attract other folks who don’t fit your niche – just because they like you, happened to hear about you first, or were recommended by someone they trust. That’s fine. There’s no need to turn them away.

SECOND: A niche can be phased in.

You don’t need to try to turn everything around overnight. In fact, that’s likely a bad idea. Better is to adopt an attitude of ‘playing’ with some niches. You can identify a few niches that you think might be a fit and attempt different promotions to each. When you find a niche that feels really wonderful (and meets the criteria I’m about to show you), you can try more promotions and those promotions can expand to become the bulk of your business. Of course, the more you focus and commit to a niche – the more it will expand.

THIRD: A niche may take a while to identify (and that’s okay).

Think of clarifying your ideal client as a long-term process rather than an event. You’ll be able to answer some of the questions in this virtual workshop easily. Others you’ll need to sit with; some for a few weeks and some for a few years. That’s the truth. Most people tell me that when they stumble across their niche – and stumble is really a good word – it’s like a light bulb going off and they think, “Why didn’t I see that before?” Because they couldn’t. It’s a process.

Since the niche is so connected to our nature – to who we are as people – it lifts up all of the places we’re not clear on our nature, not clear about our passions and our purpose. It can feel like such a huge decision. The reality is that we humans aren’t so narrowly specialized or defined as we are asking our businesses to be sometimes – we fear giving up on parts of ourselves. But remember, that your business is not who you are. It will, by necessity, be more narrowly focused than you are as an individual. That’s okay.

Before you even begin to look at any of these materials, please take 3 minutes and go read the following article by Robert Middleton . . .

http://radicalbusiness.blogspot.com/2006/09/finding-your-niche-robert-middleton.html

FOURTH: You’re already losing people.

Perhaps the greatest fear that comes up for people when asked to identify a specific niche is that they will lose potential clients. This is true. But consider this. You already are. You will never, ever, ever, ever, EVER be attractive to everyone. Impossible. If you try to be everything to everybody you’ll just become nothing to everybody. You’ll become generic and thus invisible. No matter what strategy you’re using right now, you’re already losing people. Some people love it and others are turned off by it. That’s not a problem. The real question is: who do you want to attract? And are you doing everything you could be attractive to them?

FIFTH: Starting specific is better than starting general.

Imagine a funnel. At the top is the whole marketplace. Everybody. At the bottom is a single person. Now obviously, trying to reach everyone at the top won’t work, but a single person at the bottom can’t sustain you either. What to do. Most people come from the orientation of, “okay, let’s start general and only go as specific as we have to.” I’m suggesting an opposite orientation – starting at the very specific, targeted bottom and only going up as far as you absolutely have to. Start with a very defined target and only widen as much as you need to.

SIXTH: Don’t underestimate the size of your niche.

Most entrepreneurs do. You don’t just have to appeal to the hardcore, ‘true believers’. Sure, that’s who you might be most attractive to, but you can also reach those who are ‘on the road’. Plus, as you grow, you may need to tinker your marketing to reach a slightly broader niche. Now, if there’s enough hardcore folks to meet your needs then that’s fine, but sometimes people make the mistake of thinking, “oh there’s not enough people who are into ______.” Well, maybe not as a full time lifestyle, but there’s probably a bunch who are interested. The weekend warriors of camping for example – they’re not ‘hardcore campers’ – but maybe you don’t need them to be.

SEVENTH: It’s up to you. It’s your damned decision.

Don’t let any marketing or business consultant tell you otherwise. Yes, there are things you can do to pick a winning niche – and, a bit later – I’ll show you some criteria that I think you’ll love that might make your decision making process much easier – but, hey, this is your life right? All sorts of people will have all sorts of ideas about what’s best for you and your business. And, who knows, some of them are probably right (the bastards). But some are wrong. Your life and your business = your decisions. You’ll make some mistakes, but at least let them be your mistakes, not someone else’s.

EIGHTH: You like have more than one niche.

This is so important. Most businesses I know have at least three solid target markets to focus on. The important thing is to know who they are. Each group may require a slightly different approach. So many people get stressed because they can’t identify ‘the one’ niche. Relax. You might have several. I would invite you to get clear on your top three and focus on those.

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So, how do you know if a niche you’re thinking of is a good one?

Well, your niche may be defined by what you do. You make a particular widget that has only one use and there’s only three buyers of it in the market. Your service is helping to turn breach babies naturally – the nature of your service may define the target market.

But that’s a rare thing.

Your product and service likely gives what you’re offering some definition. If you do eco-friendly lawn care there’s likely going to be some folks that are more into that than others.

At the heart of it, you’re only going to be helping folks who have a problem you can help them solve. But what if there’s a lot of people who have that problem? What if a lot of people could technically benefit from the use of your product or service?

In many cases, I will ask people who their niche is and they’ll say, “everybody!”. That is, of course, the wrong answer. When I explain that they can’t reach everyone, they look glum, pout and say, “but my product or service could help anyone!”

And that may or may not be true.

But it’s a tempting line of logic – after all look at the following list and ask yourself, “Who could these products and services be used by?”

- massage
– marketing consulting
– accounting
– recycled paper
– recycled journals and notebooks
– a health food bar
– life coaching
– interior design
– real estate agent

etc.

Couldn’t a lot of people use each of those? Sure, each of them vaguely suggests a target market, but only vaguely. Yes, a marketing consultant will work with businesses – but what kind of businesses? An interior designer will work with people who live somewhere or have an office – but what kinds of people? A real estate agent will work with people looking to buy or sell a home – but what kinds of people?

Do you follow?

The implied niche is, almost always, too wide.

There’s a tonne of food bars – and sure they implied niche is ‘people interested in their health’. But what kind of people? Luna Bar was the first to target active women specifically.

There’s lots of companies that make journals and notebooks – and the implied niche is obviously – people who like to write and need something to take notes in . . . but what kinds of people? Recover Journals out of Halifax, Nova Scotia was one of the first to target to eco, funky, retro crowd.

Most of us could help a lot of people with what we do. But if we try to reach everyone – if we don’t pick a niche – we make our marketing jobs 100 times harder. It’s just easier and more effective to pick a niche. What kinds of people do we want to target?

There’s eight specific qualities that you will want to look at – but I’ll get to that a bit later. For now there’s a ‘meta-distinction’ – a big and overarching idea that is really important to ‘get’.

It’s about the difference between people’s inner and outer realities.

This is a critical question – I’ve asked many people who their niche is and gotten answers that were profoundly off base.

And there’s two kinds “off base”. The first kind sounds like this.

- my niche is that I sell organic produce
– my niche is that I make my products using only fair trade products
– my niche is that I teach this particular style of Karate (and I’m the only one in town who does it)

What’s the problem here?

They’re defining their niche by what they do, instead of who they’re targeting with it. Again, in some cases, what you do will determine your niche – but that’s rare. If you’ve got that situation you don’t need to read another word. You’re set.

If that’s not you.

It’s not that the above list aren’t fine selling features. They are. But they are not a niche. They might be part of what’s called your USP or your Irresistible Offer – but they’re not a niche.

A niche is your target market. They’re not what you do. They’re who you’re trying to reach.

But how are we describing ‘who’ we’re trying to reach?

That’s where we run into the second – and more common – mistake.

People often say things like:

- my niche is women ages 25-35 living in Calgary
– my niche is people who make over $65,000 per year
– my niche is black men ages 20-30
– our niche is the asian community

Those look like good targets, don’t they? They seem to be well thought out and really specific.

But we need to be aware of the difference between demographics and psychographics. Many people think that a niche is defined by the external appearances (e.g. age, ethnic background, gender, income). But this is the worst way to identify your niche.

Why?

Well, just because people share external appearances doesn’t mean that they talk to each other. It doesn’t mean they share the same values or hang out in the same clubs.

Not all women, ages 25-35 living in your community talk with each other. They don’t give each other a ‘knowing wink’ as they pass each other on the street.

And that knowing wink is key. It means that they recognize and know each other when they see each other. It means that they recognize each other as “they’re one of us.” or “they’re just like me!” You can see the burst of recognition, “Ohmygodyou’reintoAniDiFrancometoo!!!!” They’re a part of a similar subculture that shares certain habits, values, passions, obsessions, tastes, aesthetics and hobbies.

Anything that is a priority for them – anything they organize their life and time around could be the basis of a niche – if enough people share it and if . . . I’m getting ahead of myself. Here’s a simple equation:

Niche = target market = subculture = community = lifestyle.

When you see punks walking down the street – they notice each other when they pass by. In certain communities in San Francisco you could see the gay community give each other these looks – even if they didn’t know each other (strong gaydar) – to the total cluelessness of the straight people around them. People who are hardcore into Dungeon’s and Dragons might notice a book someone’s reading. Dog owners notice other dog owners when going on walks. Single mothers notice other single mothers. Etc.

More importantly, these folks all tend to hang out in groups – and that will become very important as we progress.

Inner realities not outer realities.

Not all black men ages 40-50 living in the same neighbourhood talk with one another. They don’t all think alike. They don’t have the same problems – we just delude ourselves into thinking that they do.

In the modern world, we live more in communities of affinity than communities of geography. A sad fact, but a true one none the less.

The point is this: when you identify your niche, you must be predominantly aware of people’s inner reality more than their outer reality. This doesn’t mean you ignore demographics. It means that they aren’t primary.

“American marketing has historically been based upon customer demographics – what we look like on the outside. But in the past few years, psychographics – what we look like on the inside – have become a far better means of capturing the hearts and minds of customers. Demographics tend to be more tangible and are primarily focused on age, race, or income. Psychographics focus more on intangible – passions, beliefs, or values. Demographics are often defined by how the world sees us while psychographics are defined by how we see ourselves.” (Marketing That Matters, p,67)

But simply shifting to acknowledge people’s inner realities isn’t enough. It’s easy to do that in a vague – and totally meaningless – way.

- my niche is people who can afford me
– my niche is people who like me
– my niche is people who are fundamentally open to change
– people who are positive and optimistic

When looking at our niche we need to be specific – a vague niche is as much an oxymoron as ‘military intelligence’.

A bit later, we’re going to look at how to boil your niche down into a single, easy to say sentence that people will ‘get’ right away.

But for now, it’s enough to understand that a niche is more than appearances and bank balances.

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So, we know that having a clear niche or target market is essential, but, how do you know if you’ve got a good niche?

It’s one of the biggest fears people have – “what if I pick the wrong niche?”

And the fear is justifiable. After all, if you pick the wrong niche and spend a lot of time, money and energy in trying to reach it . . . and it doesn’t work out. Well, you’d probably rather not go through that.

The truth is, you could pick a perfect niche and still fail. A strong niche isn’t a guarantee of success, it just makes it a lot more likely is all.

So, what constitutes a good niche?

Luckily for you, it’s extremely easy to tell whether your niche is a good choice or not. There’s eight specific pieces of criteria you can use to judge any niche by.

And let me make a few predictions.

First: I predict these will all make a ton of sense to you.

Second: I predict you will agree with and really like these criteria.

Third: I predict that these criteria will give you some ‘aha’ moments of why past marketing efforts of yours have failed.

THE EIGHT QUALITIES OF YOUR PERFECT NICHE

1. they are experiencing a common set of easily identifiable needs you can fulfill or problems that you can help them with (and they are, at least, open to the notion that these problems can be solved and ideally they are passionately committed to solving it now – it’s a ‘must’ for them, not a ‘should’ that they’ll get to someday).

If they don’t have a common problem – it’s not a target market. And if you can’t help them with the problem – there’s simply no basis for any conversation. The problem or need is the basis of all your marketing. Most people make the mistake of thinking that people are buying their products or services – but that’s not true.

People couldn’t care less about your products or services (owch. the truth smarts) they just want a solution to their problems, they want relief from pain, they want to meet a need of theirs. Your products and services are merely a means to an ends.

So many entrepreneurs I know can talk for hours about the features and benefits of their products but if I say, “why do people need this? What are they buying it for?” they totally blank. They don’t know how to answer it. The ‘problem’ is not only the basis of your marketing message – it’s the white hot center of your niche.

2. common lifestyle: desires, passions, values, interests, hobbies, a common bond that you can cater to.

Some problems are so specific that only a narrow niche of people will suffer from them (e.g. a particular problem with a highly specialized computer application).

But some problems (e.g. back pain) are really generic. So, some problems have a sort of implied niche to them. Others don’t. If the problems that you solve are widely held – then you should likely consider selecting a particular community to work with and develop packages for.

A couple examples: a massage therapist who works with the BDSM community in Seattle. Sure, lots of people need massage – but when she caters her business to this community – she can cater to their particular needs, values and vibe. I saw an ad once that just said, “Rad Dyke Plumber” – a lesbian plumber. Now, it’s not like she’s dealing with different piping issues in any technical sense – but she is dealing with a different subculture with its own sense of esthetic.

If the problem is widely held – pick a particular community to serve. For example, if you’re tennis player and a massage therapist, you might consider becoming a massage therapist that caters to tennis players. A good niche shares a certain lifestyle.

Maybe they’re clubbers, maybe they’re weekend warriors who love to go camping each weekend, Maybe they’re all theatre buffs. Maybe they love to read comic books and play Dungeons and Dragons. They’re dog owners. They’re parents. They’re grandparents.

3. established, high quality hubs, communication networks etc.

Basically, this means that you can find them and reach them easily.

What is a hub? Think of it like the hub of a wheel. It’s the only point on the wheel where all of the spokes come together and meet. A hub is any place where you can find your niche. It might be an association they belong to, an event they tend to go to.

I can’t tell you how many times I hear people get excited about a niche they have little hope of reaching. Before you commit a dime to any niche ask yourself: Do they tend to hang out in the same places? Do they read the same magazines? Do they spend money in the same places? Are they a part of the same groups?

There are seven main categories of hubs (e.g. events, businesses, groups, publications, individuals, support systems, and websearch related). The more hubs that your niche has, the easier they will be to reach. The fewer hubs there are, the harder it will be.

Why do you want to find hubs?

Why do they matter so much?

Well, consider this – you can spend all of your time trying to find your clients individually, or you can just go to where they already are. You can spend all of your days trying to win the trust of the individuals in your niche one at a time . . . or you can secure the endorsement of someone they already trust and win over all of their trust at once.

The latter is far easier in the long term. When I go to a new town I could spend hundreds of dollars postering the city about my workshops, or I could just call up the local progressive, local business network and get their endorsement. Much easier.

4. there’s enough of them to meet your needs.

While most people don’t niche narrowly enough, you can make your niche too narrow. If there’s only three people in town who fit your description you may need to broaden your reach. You need to be really honest with yourself here. And challenge yourself: if you think there’s enough people – what are you basing that on? Hope? Or have you actually done some research?

5. they’re fun to work with and in alignment with your nature (these are likely the kinds of clients you most easily and naturally attract and the ones to whom you feel the most attracted – it’s a niche or community that you want to see thrive).

Who would really excite you to work with? Is there a particular niche or community of folks that you just naturally seem to love working?

I’ll tell you something I’ve noticed: there is a deep connection between your ideal niche and your nature as a person. I can’t tell you how many times I’ve heard people in my workshops say, “well, basically, my niche is people just like me!” And that’s not a crazy response. It makes sense.

6. they are underserved: the niche is often based on what your competitors aren’t doing.

If they have a need but are being ignored by your competition, that can be a goldmine. If they’re already being courted for their business by dozens of other businesses then that niche is less than ideal **unless** you are able to offer something so unique and so clearly more valuable that it will blow the competition out of the water.

If you’re able to do that then you’re in a good place.

If they are overserved – if they are inundated with options then you need to do one of three things: be the only option that focuses just on that niche exclusively (e.g. the only massage therapist in town who works only with mothers).

If there’s already a lot of other businesses focusing exclusively on that niche then you might consider picking a sub-niche – focusing on one particular sub-group of people in that niche (e.g. be the only massage practitioner in town that works exclusively with new mothers). Or third – you will also need to distinguish yourself in some other way.

You can differentiate yourself by: what you do, how you do it. how much you charge, who you offer it to, when you offer it and where you offer it.

7. they can afford to pay you full price for your products and services.

It’s important that they are able to pay you an amount that feels good and meets your needs. That may be a small amount or a large amount. That’s up to you – but if it’s less than you really want and need you will begin to resent them.

It will drain your energy. And you won’t have enough money to sustain yourself. It will start out as a gesture of goodwill, but will end in bitterness.

8. they are in alignment with your long-term business goals.

If you know where your business is headed long term, it’s just smart to pick clients that will fit with that (e.g. if you do eco-lawn care and want to work with “Golf Courses” eventually, but now need to do residential, it might be wise to focus on people who golf for now so that you can bridge into that later).

Says Dominic Canterbury:

“Let me give you an example: In my recent weekend seminar one of the attendees was an in-home physical trainer. His target: affluent middle-aged Eastside women. He was flummoxed. He’d tried all the traditional forms of marketing but nothing was working. So wielding my magic wand of marketing I says to him, “How about targeting affluent new moms. That way you can develop a set of services to meet their specific needs and you can cross promote with OBGYNs, Dulas and baby stores, and you can get them to pay attention to you by holding informative events or writing an article for local parenting magazines. You might even consider a blog.”

He loved the idea and immediately started coming up with excellent ideas on his own.

So, what makes this a good target and what makes the other suck? I’ll tell ya.

The new target market passes my patented tripartite Target Market Test:

1. They have shared needs you can meet through your business

2. They have hubs of communication

3. There’s enough of them to make it worth your time

The original target passed only #3, and I’m sorry folks, but you have to score high on all of them for it to work.”

 

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