Market Research for a Niche Business

1389643_72008877You have a passion for a specific niche, one that is waiting to be tapped (or so you think). You quickly jump into opening your own online business to break into that niche. You spend a ton of money, time and sweat to open an office, have someone develop a professional-looking website for you, pay for web hosting the site, and hire an assistant.

But unfortunately, the customers are not knocking down your door, and your income is marginal, at best. Even after a year or two, it’s more of a hobby than a real business.

Is it worth saving? What could you be doing better?

Passion alone is not enough

Choosing a niche is nice. Enthusiasm is good.

But according to Lorna Li, “Being well informed and enthusiastic about your passion is not enough to build a profitable business out of it. You must make sure your market has enough profit potential to meet your financial goals, especially since you will need to invest some money to get your business off the ground…It all boils down to niche profitability.”

That’s why it pays to do the research and really know your niche inside-out. The good news is that it doesn’t have to cost a fortune…in fact, you can readily do it yourself in a matter of days, maybe even hours. Without ever leaving your desk. (Without hiring an expensive market research firm to do budget-busting, time-consuming focus group research.)

Use online research to clearly define your niche

If you want your business to have more power, you have to make sure that there’s a demand for your product or service and that people have the money to buy what you’re trying to sell to them. The better you can define and understand your market, the better you can target your message to their needs and desires…and turn them into your own peeps, who will be avid fans that buy from you and rave about your business.

Yes, I said spend time on understanding your market first. Not on developing your products or services. Products and services come and go, but a niche audience sticks around. You should take the time to tune into their needs, hit their “hot buttons,” and speak their language.

To best understand your market, BusinessInfoGuide.com recommends that you:

  • Conduct surveys and interviews. Talk to people in your market to find out what influences their buying decisions, how much they spend on related services annually, what they like and dislike about competitors’ solutions, what issues they need solved, and how you can meet their needs. To collect information online, you can use a tool like SurveyMonkey.
  • Uncover industry and niche data. Google is your best friend when it comes to researching your target audience and demographics through trade associations and related firms that conduct surveys on market demand and how a niche is growing. And be sure to check out all the free information available from the U.S. Small Business Administration.
  • Evaluate your competition. This is critical if you want to gain a competitive edge. Use the Internet to delve into your top 5 to 10 top competitors. Find out what products and services they offer, how much they charge, and what advantages they might have over you. You can also sign up for their email lists, subscribe to newsletters, visit their social media sites, or even call to inquire about additional details. (BTW, don’t be timid or nervous about this kind of research. They will be watching you, too!)
  • Uncover consumer trends. Watch trends, stay informed, and keep a finger on what your market wants and needs now. Such sites as trendwatching.com provide monthly reports on a wide variety of consumer trends. Also check out Google Trends, eBay Pulse, and Yahoo’s Buzz Index. A recent Solamar post says that, “… your success depends on you keeping your finger on the pulse and your ear to the ground of what works for your market. You need to recognize what’s hot and what’s not.”

Also tap into keyword research

You want to identify what keywords your audience uses on the Internet when they research topics related to this niche market, especially searches related to their problems, pain points, or deepest desires. This data will tell you what topics your target market cares about the most, so you can use these specific words in your content. Plus, it tells you whether or not there is enough profit potential in your chosen niche and when there’s already too much competition.

Start with Google’s free keyword tool. It’s fun and easy to use. Simply type in a search word to find out its popularity on Google and similar key phrases. The tool provides lots of useful data related to these keywords (especially if you use this tool while logged into your Google Adwords account) such as local and global search volume, level of competition, average cost per click (CPC) and more. This is a good place to find out more about your competition, too.

You also want to take advantage of a free trial on WordTracker, a pay-for-service tool that shows you exactly what keywords people are searching for online.

All that research is at your fingertips…just a click away. But, it’s up to you drill down deep into your niche to identify who is in it, what keywords they’re looking for, and what profitable products and services they want and are willing to buy.

Plus, you need to take that information and translate it into your total brand identity with content and messaging that really speaks to your market niche. That’s where Solamar shines! Discover how we can help.

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