If you’re starting your own business or trying to ignite new growth, you’ve got to make sure that you’re a big fish in a small pond.
Starting your own business is a big endeavor. It takes so much hard work to get your company off the ground. Even if you’ve been at it for a few years, this question may still leave you shaking in your boots:
“So, what’s your niche?”
Has that question ever left you tongue-tied? How specific of an answer should you give?
If you’ve been in business for awhile, maybe you can give a decent answer. But when looking at your recent sales growth, you probably know that your business is not be showing its true potential. And that may very well be because you haven’t found the right niche that’s actually profitable, or your unique value proposition needs some refinement.
So you probably know that having a niche market helps you to better stand out amongst your competitors.
It also means that you’re not trying to chase after all potential customers–just a certain, specific group of them. And, it’s easier to do this when you’re not fighting a large group of competitors for the same group of customers.
Whatever business you’re creating and running, you’re going to want to ask and answer the four following questions. These questions will help you dial in your products or services AND make your business more profitable.
Question #1 – What is the problem to be solved?
So this is the first and most important question that you need to ask because your product or service is the solution to this problem. Your product or service could be a process–something that isn’t getting done that needs to get done.
There are other questions that come with this question, such as:
- Is this a problem that can be solved? There are a lot of problems out there that need solutions, but it doesn’t mean that the solution is actually feasible.
For example, there are a lot of inventions that never make the light of day because they are too expensive to scale for mass production.
Even the prototype can be too expensive. It helps to do some research on your problem to see if you can actually solve it.
- Is this a unique problem that can be solved? Let’s say you want to create a food delivery app. There are plenty of those out there.
So what will make your delivery app delivery different from all the others? Having a niche market means that, ideally, you’re the only one providing this product or service, or providing it in a unique way.
Question #2 – Who has the problem?
Your ideal customer is searching for your unique solution, but do you know who this person is?
Who is this ideal customer? Are they younger or older? Male or female? What’s their educational background? Where do they live? How much money would they be willing to spend to make this problem go away? How much are they making annually?
All these questions can be answered by creating a buyer persona (also known as a marketing persona).
You already have a ton of data on your niche market. You can extract this information via Google Analytics or by simply asking your audience a few key questions through a survey. By creating a buyer persona, you start to create a more tangible idea of who you’re addressing–whether it’s in your blog posts, your website content, or with sales materials.
Question#3 – How badly do they want to solve the problem?
So you’ve found your unique problem, you’ve found your ideal customer who has this unique problem that they want to be solved.
Now you have to answer how badly do they want to solve this problem. And many times, the price of your product or service is the barrier that will prevent your client from buying from you.
So this may sound fantastical and way out there, but we’re almost living in the time of the Jetsons–there are flying cars out there. And how many of us have dreamed to soaring over traffic and getting home in record time?
So let’s say you want to go into the flying car business. You find you that just to prototype this vehicle, it will cost $700,000. To get this car out to market, it’ll need to cost at least $900,000 per car.
So at that price point, how many people are willing to pay almost a million dollars to do that? Besides the very important fact that the FAA hasn’t approved flying cars yet, your market just got very small–uncomfortably small.
You don’t want to have to be in a position to convince your ideal client that they need this product at this price point, which isn’t even that competitive.
Ideally, your audience already knows they have this problem and are looking for solutions–specifically, your unique solution. If you’ve done your homework, then you’ll know how to meet your audience where they are, instead of trying to sell them on something they don’t want or need.
Question #4 – Why would they want you to solve it?
Now that you’ve answered the first three questions, you may still have other competitors offering similar services or products like you do. So now you have to think about why your ideal customer should choose you over everyone else.
So not only should your product be unique, but so should your business. Both of these concepts need to be in your unique value proposition.
Here are some ideas of how you can differentiate yourself from the competition:
- Speed of service
- Excellent customer service
- Unique industry expertise or experience
- Higher quality products or services
- Geographically exclusive
Whatever helpful spin you can put on your business, that will help you stand out in the marketplace for all the right reasons.
Although these four questions are not the easiest to answer, they will prevent you from pulling your hair out as you search for the right niche for you and your business.
It will take a lot of market research and patience. But once you have it all figured out, you’ll be a big fish in a little pond, connecting with your ideal customers and uniquely solving their problems.