The importance of finding your true market ‘niche’
A niche is a focused, targetable part of the market based on positioning yourself as a specialist providing a product or service that focuses on a specific group’s needs, which cannot or are not addressed in such detail by other mainstream providers. Occupying a unique niche usually means you won't be competing with a lot of similar businesses solely on price. And because you will be selling an idea or service that is customised to the specific predispositions of a select group of people, you can often charge more, as you are serving a market that can't easily find alternatives. This is ultimately the wonderful position to aim for as you try and find your business idea that you are passionate about.
The process not surprisingly needs to start with market research: analyse your best potential customers, your competitors, your market's predisposition toward your products and services, and your ability to serve these people so well as to make you their vendor of choice. Market research is like sticking your toe into a lake before jumping in. If you figure out exactly which group of people you want to reach, and what their needs are, you avoid wasting time and money. Once you know, you can alter your product or services to fit the needs of your target market more closely, and you can craft a message that reflects your business and your customer.
Market research does not require expensive consultants, surveys or focus groups-- it can be as simple as asking your best customers the right questions. To determine if a particular niche is right for you, ask yourself these 5 questions:
- Do I have an identifiable target population with similar interests and needs?
- Is the market large enough to support my business?
- Can I tailor my products, services, and business identity to address that market's particular needs?
- Is my target market currently underserved?
- Can I reach my potential customers in a cost-effective manner?
Your unique niche will give your marketing efforts a natural, sharp focus. The more you specialise, the more your market will see the value of your services because you speak directly to their unique situation. Assuming your niche is large enough, you can do quite well by becoming a provider of products and services that can't be found anywhere else.
The power of Pareto’s Principle, the 80/20 Rule at play
The Pareto Principle is very simple, yet very important, to business people everywhere. It is named after Italian economist Vilfredo Pareto, who, in 1906, found that 80% of the land in Italy was owned by 20% of the population. What was most important about Pareto’s finding was that this 80/20 distribution occurs extremely frequently in business, standing remarkably true today across the world’s markets. For example, in general, 20% of your customers represent 80% of your sales. And 20% of your time produces 80% of your results. And so on. The Pareto Principle, or “80/20 Rule” is an incredible tool for applying a rule of focus for managing your business. For instance, if you can figure out which 20% of your time produces 80% of your business’ results, you can spend more time on those activities and less time on others. Likewise, by identifying the characteristics of the top 20% of your customers (who represent 80% of your sales), you can find more customers like them and dramatically grow your sales and profits. In a discussion of the 80/20 Rule, it’s important that we not get too literal over the precise number. In a numerical sense, it could in fact be 85/25, or 90/10 – the essence of the idea is what is important – that daily we focus the biggest part of our day on work that is important. In this way, we don’t simply aim to ‘work smart’ but ‘work smart on the right things’. The value of the Pareto Principle in management is in reminding us to stay focused on the “20 percent that matters”.
In fact, the Pareto Principle, that 80% of your outcomes come from 20% of your inputs, can apply to most aspects of your business or working life. The principle is a powerful one that can also have a wide-ranging application in your management of your personal, family life, as well as a focus on work life balance where you may focus on what is truly important and has the greatest impact.
If you have any thoughts on finding your own niche in areas of greatest potential, if our team of trainers can assist you in any way with your ECA Professional Year studies, contact me on firstname.lastname@example.org
General Manager – ECA Professional Year
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