Why Demographics Aren’t Enough for Your Niche

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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About Tad

  • Mea Rice

    Great article Tad! I completely agree.
    I believe traditional marketing research agencies need to go further than just demographics and focus on targeting smaller sub- niches. This in turn will produce a more detailed segmentation that gives you an accurate insight into your target market. A company I recently read about ‘Clusters’ has been practising this rather well. http://www.clusters.uk.com