Niche Marketing: How to Target and Convert Highly Specific Audiences

A niche is an aspect of a market defined by a distinct set of characteristics and needs and is usually a subset of a market. Clothing includes teens, babies, children, womenswear, menswear, formal, casual, beachwear, weddings; further compounded by culture, demographics, geography, price, and fashion – e.g. women’s clothes are very different in the USA and KSA.

Niche marketing is when an organization decides to focus its efforts on a segment of that larger market by meeting its unique needs and wants: i.e. a laser focus. Differentiation is vital: where you find a niche to exploit then you can make money.

Diet Coke and Coke Zero are both zero-calorie sodas, however, Zero is targeting men with its masculine design and name, whereas the clean, bright Diet Coke targets women, hitting two separate niches.

Niche marketing is thus about getting your message about your offering and its benefits to your niche members by ensuring your message is in the format they want to see and using the channels they use to get them to buy from you: not the competition.

Unearth Your Goldmine: Spotting Your Niche

Spotting a niche means understanding customers’ Needs and Wants and then supplying offerings that match.  They are not the same: ‘I want a Ferrari, but I need a car’.  It is needs that drive purchases but if you can get your offering to go some way to meeting wants as well: it will be a winner.

Japanese car makers entered the UK market focussing on cheap cars, but with standard features that were extras on others. They met real needs for transport but included wants for accessories (music, electric windows, etc) at needs prices: taking significant market share!

Identifying a niche can be by two routes:

1. from analysis

• understand the problems/needs
• Research the competition
• Define your niche
• Refine your offering to meet those needs – with a better price/value trade-off than competitors
• Test it with potential customers

Today several tools are available to help you analyze your potential market. For instance, Google Analytics is a comprehensive tool for understanding your website traffic and user behaviors. MixPanel allows you to track user interactions with web and mobile applications and provides tools for targeted communication with them.

Whatagraph is excellent for visually appealing and automated marketing performance reports, whereas AdWords Performance Grader helps assess the strength of your Google AdWords campaigns. Heap Analytics excels at capturing every user interaction on your website or app, eliminating the need to manually tag events.

Lastly, Cyfe is a business dashboard app that allows you to pull data from numerous sources for an at-a-glance overview of your business’s health and performance. Each tool has its strengths, and the choice depends on your specific needs, budget, and the type of insights you are seeking to obtain. Always remember, the goal is to understand your audience better, identify your niche effectively, and refine your offerings to exceed the competition.

Or

2. by happening on a niche and then crafting an offering for it

Sophie Merman was working in clothing retail when she spotted a niche for a broad range of fun socks and stockings: so she set up Sock Shop using small retail outlets, carrying a niche range.  It became an international success, although now it is mainly online.

No matter which route you choose you must focus on customers’ needs.

Niche marketing, by its very nature, zeroes in on a specific segment, making in-depth research of that segment indispensable. This research process involves several steps.

First, you should conduct a competitive analysis to understand what offerings are already available in the market. Next, develop ‘buyer personas,’ which are detailed profiles characterizing your niche customers. This will enable you to better understand their needs and wants.

Then, employ ‘social listening tools’ to monitor public sentiment about your offering – for example, by assessing customer reviews. Finally, seek to understand your customers’ ‘pain points,’ and the issues they have with similar products, and strategize how your product can address these pain points.

Let’s consider Under Armour’s story as an example of successful niche marketing. It was founded by a U.S. sportsman who identified a specific need for sweat-absorbing shirts within the athletic community. Starting from humble beginnings of selling shirts from his car trunk, he built Under Armour into a global brand, boasting $6 billion in revenues and a diverse product line.

However, as consumer needs and wants evolve, it’s crucial to stay updated with market trends. Even if your brand is leading the market today, there is no guarantee it will remain at the top tomorrow. A case in point is Blackberry, once a market leader in the smartphone industry, which was eventually overshadowed by competitors like Apple and Android.

Remember, there are numerous online platforms available, such as Exploding Topics, that can assist in identifying emerging trends and help you stay ahead of the curve. Constant vigilance and adaptability are key in the ever-changing world of niche marketing.

Get into Your Customers’ Shoes: Knowing Your Niche Audience Inside Out

In marketing, the old adage “If you wish to understand someone, walk a mile in their shoes” might feel cliché, but it bears a crucial insight. Getting to know your customers at a profound level — getting under their skin, so to speak — is an integral part of effective marketing.

Customers buy for different reasons:  Need; Ego; Trust; Impulse; and sometimes Price. By comprehending these motivators and tailoring your marketing strategies accordingly, you will not only engage your audience more effectively but also strengthen your niche marketing efforts.

Storytelling, utilizing a cohesive narrative to communicate your brand’s message, is another potent tool in niche marketing. It’s not just about presenting features and benefits; it’s about creating a compelling narrative that resonates with the audience.

‘All Because The Lady Loves Milk Tray’ was a successful story in the UK with an action character engaged in acts of “derring-do” just to deliver a box of chocolates, leaving behind an enigmatic calling card.  The USA cereal Trix has ‘Trix is for kids not rabbits’ using a rabbit that tries to get the cereal but is frustrated by children.

Many of the most successful brands have these stories to reinforce their message and a report by WE Worldwide found that branded storytelling meant that digital consumers who were highly exposed to branded content through social media might spend up to 257% more at the point of purchase and can be up to 90% more likely to recommend a brand to a friend, family member or colleague.

Aspirational selling — where the focus is on promoting a lifestyle or a dream, instead of the physical product itself — has also been proven to be a highly effective storytelling technique in marketing. This concept is encapsulated in the phrase ‘Dreams not perfume,’ which emphasizes the idea of a product being synonymous with a glamorous and aspirational lifestyle.

It’s not just about the perfume, but the lifestyle that comes along with it, the sense of prestige and allure it brings. This strategy creates a narrative that extends beyond the product itself to touch upon the aspirations and dreams of potential buyers.

Such a narrative is not limited to just one aspect of your marketing strategy. It should be woven through every marketing channel and consumer touchpoint, allowing for a consistent reinforcement of your brand story. By doing so, your brand becomes more than just a provider of products or services – it becomes a part of your customers’ aspirations, making it more resonant and impactful.

Mirror Their Mindset: Building Your Buyer Persona

One way is to think deeply about who your customers actually are.  What are their interests? How do they speak? What do they value?  Metaphysically getting into their shoes, enabling communication in their own language to those core values.

This is called developing a Buyer Persona – a generalized, fictional, profile of your ideal customer, based on your research, which embodies the most important characteristics of your target customers.  A 17-year-old has different needs from a 75-year-old and will use different language (argot, jargon).   It is helpful to create a demographic and psychographic profile, understanding the target customers’ behavior trends, values, desires, pain points, and affiliations.

Misunderstanding a persona can, on the contrary, have dire effects:

In 2023 Bud forgot that its persona was a blue-collar working person with traditional values and, as it tried to be ‘woke’, sales plummeted and its share prices tanked.

Thus you must know who are you targeting – the 4Es

Elite                 Highest level: feelings of exclusivity are paramount. Aston Martin, Rolls-Royce, Black Amex, First class airfares, 7-star Burj- Al-Arab Hotel.  Largely indifferent to price

Extra               High level: based on a strong brand, inelastic demand.  Mercedes, Private banks, Gold Amex, Club class fares

Everyday        Ordinary level: no significant advantage.  Most banks, credit cards, many cars, Economy fares, and many large supermarkets

Elementary     Cheap/discount. Weak players, ‘giveaways’ to break into markets, bottom level, loss leaders, poor image in market, sub-prime lending, cheap airlines, $1 stores.

There can be niches at any of these levels as long as you understand your customers.

Magnetic Attraction: Crafting a Marketing Strategy That Resonates

In today’s digital age, consumers are bombarded with countless marketing messages every day. To ensure that your message breaks through the clutter and resonates with your target audience, it’s crucial to develop a strategy that not only catches their attention but also speaks to their unique needs and interests. Make sure:

• it stands out from the clutter of all the other assaults on the customer that take place every day
• it describes the offering in the customer’s terms not yours – put yourself in their place – how would they describe it?
• it focuses on the benefits not the features, but in the customer’s terms – e.g. ‘we offer a larger handset for those who have difficulty with smaller keys’ and link it into the Cost/Value
• it is targeted correctly (advertising meat on a vegan site is not recommended).

Nowadays, having a sleek, user-friendly website is a given—it’s the first thing potential customers check out. Beyond that, however, there’s the possibility of leveraging influencer partnerships. These partnerships, when handled judiciously, can prove extremely beneficial in expanding your reach. The key, of course, lies in choosing the right influencers—those who truly align with your brand’s values and can authentically promote your offerings.

Guerrilla marketing is another strategy in which a company uses surprising and/or unconventional interactions in order to promote a product or service.  It can be very cheap such as spraying graffiti on walls (but make sure it isn’t illegal) and often involves the use of stencils: getting the same message across quickly, cheaply, in many locations.  Reverse graffiti is when dirt or grime is removed to leave the desired message.

But remember, even the most vibrant niches can quickly become crowded. As soon as others identify the potential in what you’re doing, competition will ensue. So, maintaining a unique edge is crucial. Regular innovation, consistent value delivery, and a relentless focus on customer loyalty can go a long way in keeping your brand relevant and your offering a hit with your customers.

Turning Admirers into Loyalists

From Suspects, to Prospects, to Customers, to Loyalists is the journey you want your customers to follow: but you are no longer in charge of the way customers interact: as they use new and diverse platforms across multiple devices with increasing capability: enabling customers to shop more easily wherever, whenever; compare prices and products; provide feedback, criticism, and ratings.

Social media is instrumental in fostering brand loyalty. Loyal customers are a boon for two reasons – they are not only a source of recurring sales but also have the capacity to influence others via their social media activities. Take, for instance, our “gardening example” to understand how each platform molds user interaction.

A user on Twitter might tweet, “Just planted my first rose bush.” On Facebook, a user could write a status saying, “I love spending afternoons in my garden.” Over on YouTube, you might find a user uploading a video tutorial on “How to plant and care for roses.”

An Instagram enthusiast might share a beautifully crafted image of their blooming rose bush with a caption like “First bloom of the season!” A Pinterest user, on the other hand, might create a board dedicated to “Top Rose Gardening Tips.” On LinkedIn, a user might write an informative article on “The Therapeutic Effects of Gardening.” Lastly, on Reddit, a user could start a discussion thread asking for “Advice on best rose varieties for different climates.”

In each instance, the user is engaging with the platform in a unique way, sharing their gardening experiences, and potentially influencing others within their network. This level of interaction offers brands an excellent opportunity to cultivate a loyal customer base.

When Walkers Crisps (GF) wants to launch new crisp flavors it now advertises them all and asks customers to go online and vote for their favorite.

The main goal of marketing is to convert inquiries—whether they originate from your website or phone app—into customers. This is known as Conversion Rate Optimization (CRO). Yet, it is essential to remember that it is not solely about sales. It involves all the actions you’d like your visitors to take on your site. This could be something that moves them further along the sales funnel towards a purchase, or information collection, and might involve a customer:

• Clicking a banner ad or a text ad
• Clicking through to a webpage
• Downloading a report or whitepaper
• Subscribing to a newsletter
• Completing an online form
• Signing up for a webinar

Whatever the desired action may be, it is valuable to your business and should be measured to tell you how well you are doing.

Part of this is creating a brand story that connects and/or gets customers involved – e.g. Lego saw a niche for plastic bricks and continues to exploit that niche through innovative customer interactions.  It has grown from a small Danish company to a global enterprise.

Lego has specific days where they invite customers to come in and play with Lego to build things and explore what they might want in the future, however, every new product developed must be able to link into all other Lego pieces.

The reduction in in-store sales leaves fewer opportunities to influence customers at the Point of Sale.  The increase in rating engines and feedback forums means customers no longer take products and services at face value.  Shopping around is easier, and loyalty is more difficult to retain.

The principle of upholding your ‘brand promises’ is of paramount importance. Consider, for example, the well-respected UK department store, John Lewis, which operates under the brand promise ‘Never Knowingly Undersold’. This means they are committed to offering their customers the best value on the market. To live up to this promise, John Lewis actively adjusts its pricing, even to the point of ‘underselling’ products, to ensure they match the prices of its competitors. This practice strengthens the trust between the brand and its customers, reinforcing the store’s reputation for value and fairness.

Niche marketing allows you to foster brand loyalty because you are engaging with fewer people you can focus effort on likely prospects and build quality relationships.  Your customers should recognize that you are with them – seeing you as a ‘partner’, rather than a vendor.

The Growth Diary

Marketing requires expenditure so it is vital to measure the success of your marketing initiatives – i.e. what return are we getting in terms of:

• how much have we sold?
• what was the cost of the initiative?
• are we making any money etc?

This involves some sort of data capture and analysis of customer behavior, trends, profitability, successes, failures, etc.

You must also measure the effectiveness of your website – a useful method is A/B testing.  This involves two groups who are asked to judge things – but one group has a slight variation – i.e. one is a control.  A comparison of these enables you to review that difference.  This should be repeated more than once for good results and then take action to improve things.

When Coke introduced ‘New Coke’ a variation on its formula in the ‘80s: it didn’t carry out adequate testing to see if it was a success and the rejection nearly destroyed the company.

There are many tools and techniques for this sort of measurement but the key measures include:

• Actual sales growth
• Conversions from clicks to sales
• Website traffic
• Website traffic to leads
• Social media engagement
• Inbound link building
• Landing page conversions
• Blog post visits
• Net promoter score
• Follower growth
• Search rankings

It is important that the results are analyzed and action taken to improve your marketing.  This might be around the cost to deliver, cost to produce, value to customers, etc. in order to maximize profit and ensure a continuing market for your offering.

Unleash Your Potential

Niche marketing is about understanding the ‘wants and needs’ of a particular set of customers and then crafting an offering that matches and it is about understanding the competitive offering and bettering it: either at a lower price or a better cost/value trade-off.

Identifying niches can deliver better returns as you are focussing directly on a discrete set of homogeneous customers and targetting their needs and ideally their wants directly.

Then it is about getting your message across.  This requires a holistic marketing strategy embracing all the potential mechanisms: advertising, social media, customer surveys, etc in order to keep your customers from the competition and retain them.

Keeping on top of your customers’ changing needs is the key to success: it used to be the case that 1 dissatisfied customer would tell 10, now they will tell every virtual person they know and many they don’t at a single click.

It is important to measure the success of your initiatives and learn the lessons to reinforce your success!   Using these techniques will enable you to find a niche and then craft an offering for it.