Seven Questions To Help You Create A Niche Offering
It may seem safe or appealing to be everything for everyone in an effort to have the broadest appeal and the largest opportunity. By doing this, you very well could end up being nothing for anyone. Competition is fierce regardless of your product or service offering. By creating a unique offering that appeals to a very small segment of the market you create a point of difference for your offering.
This is the concept of the long tail. Without bringing up nightmares of statistics class you can picture a normal distribution. Statistics tell us that 95% of the population will fall within two standard deviations of the mean. If I produce a product that appeals to the average, exactly at mean then 95% of the market will like something close to average.
This is where the mass market production comes in. A car company may pick the shade of blue for their cars knowing that this shade appeals to the “average consumer” and something close to this shade of blue. Further out on the left of the spectrum are the people that prefer a purple shade of blue. Then on the right are people that prefer a green shade of blue. We can make our product this exact shade of blue because of its greatest appeal.
By positioning your business to appeal to the fringe outside on the right or the left of the mass market you can satisfy a market that has less competition. To continue the example above, you can make your cars purple because a small number of people want purple cars that are not getting them in the mass market production. The market is smaller so the mainstream mass market big corps do not want to invest in this small area of demand.
The challenge is about reaching and the internet has broken this dilemma. For most of human history, the fringes of demand outside of the mass market have been too small to warrant the investment and focus of any business to be profitable. There are only a few people that want a purple car. I cannot be the purple car dealership because only six people in my town want purple cars. I’d starve and be broke. Now, with the reach of the internet, I can now attract purple car buyers from the entire country to my showroom. Now I have a market of 6,000 and can build a thriving business. On a national scale, even this 6,000 buyers is too small for the megacorp that wants 6 million buyers.
Finding the niche for your product can provide a way to deeply and intensely satisfy the unique demands of this one key demographic. A few questions to keep in mind:
- How well do you know this niche population?
- What makes them special? What are their unique needs?
- Why is no one else catering to this group?
- Can they afford to pay for your service?
- Will they pay more for a custom solution?
- How much better does the offer have to be for them to pick yours vs. the mass market?
- Is it ten times better?
- What would ten times better look like?
- Can you reach this population? Do you have a way to connect with them?
- Why will they trust you to service their needs?