What is a niche audience? How to define your niche audience
What is a niche audience, and why is it so valuable to your business? You’ve probably heard of the term “niche” before now, and you likely know that each company has a specific “target audience.” But what exactly does it mean to have a “niche” marketing strategy?
Ultimately, a big part of running a successful business is ensuring you appeal to the correct customers. Although casting a “wide net” and attempting to convert everyone you meet into a paying customer might seem like a good way to accelerate growth, it’s rarely realistic.
No company will automatically appeal to every customer.
With a niche audience, you focus more specifically on the exact people with the pain points you know how to address. This strategy can help you to save money by reducing the time you waste marketing to people who aren’t really interested in your service.
It can also be a great way to differentiate your brand from other similar companies.
Today, we will be examining exactly what it means to target a niche audience, how organizations can find their own “niche,” and what a niche marketing strategy might look like.
What is a niche audience? Niche audience definition
Let’s start with the basics: what is a niche audience?
A niche audience is a specific type of target market. A “niche” is essentially a smaller sub-section of a larger market, defined by unique characteristics, pain points, and traits.
A basic target audience for a company selling graphic design software might be anyone needing to create graphical components, like logos, website content, and website elements.
A “niche” audience would dive a little deeper into the exact nature of that audience. Instead of targeting everyone who might use graphic design software, you might focus on freelance graphic artists, social media managers using graphic tools, or small businesses.
Marketing to a niche audience involves positioning your offering (such as a product or service) as the ideal solution to a specific group’s unique needs. Companies use hyper-personalized messaging, graphical content, and branding elements to reach a specific consumer.
A good example of a brand with a niche audience is Brewdog. Instead of just selling beer to anyone who likes it, Brewdog targets socially and environmentally conscious consumers who want to give something back to the planet, and explore new flavors and brewing styles.
What are the benefits of catering to a niche audience?
So, what is a niche audience good for? Targeting a much smaller, more specific audience with your products and services might seem like a way to reduce your earning potential. However, it has several benefits.
Niche audiences and niche marketing deliver benefits like:
1. Reduced competition
One of the main benefits of targeting a niche audience is that you don’t have to fight against as many existing brands to earn your market share. When you serve a limited audience, there are likely to be fewer competitors providing the exact same offering.
This makes it easier to differentiate yourself and earn the right revenue.
2. Money savings
Niche audiences can significantly reduce your spending on advertising and branding. If you were targeting a mass audience, you’d likely need to invest much money into PPC, search engine marketing, and organic SEO to capture any attention.
At the same time, you can focus your budget on attracting high-value leads who are more likely to convert into customers. This reduces the money you waste on the wrong audience.
3. Brand growth
As mentioned above, a niche audience helps to differentiate your brand by highlighting the key things you can offer a specific group that your competitors can’t.
Because you’re focusing on a smaller group, you also have more time and budget to deliver exceptional customer service and nurture long-lasting relationships. You can work on generating affinity and cultivating loyalty for your brand to earn more repeat purchases.
4. Higher profits
Niche businesses can sometimes generate higher profit margins. This is because they meet the specialized needs of their customers. If you can deliver a solution for a set group of consumers that no one else can offer, you can preserve a highly competitive brand, with significant equity.
You may make a lot more money than you would with a mass audience strategy.
When you manufacture and sell a specific product or service for a niche audience, you become an expert or “thought leader” in your field. This gives you greater authority and appeals in your chosen space.
You’ll also have more freedom as a business leader to focus on the areas or topics you care about rather than selling to a broad group.
What are the risks of catering to a niche audience?
Although there are many benefits to catering to a niche audience, there are also some potential downsides. Perhaps the most significant issue companies face regarding niche marketing is that they must work out which “niche” they should target.
Some niche groups need to be bigger for consistent growth, while others have too much existing competition.
The biggest downsides of catering to a niche audience include the following:
1. Limited growth
Niche marketing focuses on narrowing your audience down to a much smaller subset of people. This means you will naturally receive less traffic on your website, fewer conversions, and potentially fewer sales.
The smaller your niche, the harder it will be to generate ongoing opportunities and growth. This is why it’s so important to find the right niche.
2. Competition levels can vary
Initially, the reduced competition for a niche audience can be highly beneficial to a brand. However, it’s worth remembering other companies could come in and find your niche in the future. Eventually, new companies will emerge and try to steal some of your customers.
This means you need to work rapidly on building loyalty and trust with your community.
3. High ROI isn’t guaranteed
Having a niche market can generate a fantastic return on investment. However, serving a smaller target market can make it tougher to earn good profits for some businesses too. The fewer customers you have, the riskier the process becomes.
You must ensure you’re investing in the right marketing and sales tactics to maintain revenue.
How to find your niche audience
Finding the right people to target is the biggest challenge of achieving success with a niche audience. Figuring out how to find your niche audience relies primarily on one thing: research. You’ll need to understand your marketplace, audience, competition, and brand identity.
Here’s how to get started with your search:
1. Analyze your brand
First, you’ll need a clear understanding of your brand to determine the audience you’ll likely appeal to. Think about the kind of products and services you sell, as well as your tone of voice, your approach to customer service, and your go-to-market strategy.
Specifically, look at your “USP” or Unique Sales Proposition. What makes you different from your competitors, and what kind of customers will be interested in whatever you have to sell? What pain points do you solve, and what value do you deliver?
2. Go deeper with your target audience
Rather than just identifying the base “group” of people your solution is likely to appeal to, such as marketers, or homeowners, try to create highly specific user personas. A persona will help you to visualize who your ideal customer really is.
You can think about things like:
- The age of your intended customer
- Their location or where they live
- How they purchase your product or service
- What their hobbies and interests might be
- What their family life is like
- What profession they work in
- Their income or educational level
When examining your products, services, and potential customers, you may have several different “niche” groups you can target. For instance, a software as a service (SaaS) provider might target freelancers and small companies simultaneously.
3. Conduct market research
An excellent way to better understand any niche audiences you want to target is by conducting in-depth market research. While running your own market research with surveys and polls can be expensive and time-consuming, plenty of insights are already available on the internet.
You can look into industry reports and analytics to find out about different groups’ purchasing habits and priorities. You can learn more about what your audience wants by checking out industry research.
If you already have a few existing customers in your pipeline, consider contacting them to collect more information. Feedback, intake forms, and conversations with sales and marketing teams can all be excellent data sources.
4. Examine the competition
As mentioned above, a good niche audience needs to have the right level of competition. Ideally, there should be only a few other companies already serving the specific group you want to address. However, if a niche has no competition, there’s probably a reason.
Looking at the competing brands in your specific space can give you an insight into what you need to do to differentiate your brand and “stand out.” What do these companies fail to offer the customers you want to target? What can make your solution the better option for a specific customer?
Tools to help define your niche audience
Finding your niche audience can be challenging, but you don’t necessarily have to do it alone. Businesses can use various tools and services to improve their chances of success.
For instance, you can try the following:
Google Analytics is brimming with valuable insights into different market segments and groups from around the internet.
You can use this tool to check out the latest trends in your industry, determine what customers are searching for, and even track the success of your marketing campaigns. Google Analytics can also tell you more about the demographics of the people who visit your website.
You can dive into the location of the people who interact with your brand, learn which pages they spend the most time on, and even what social media platforms they use.
Marketing analytics tools
Various web marketing and lead generation tools can provide valuable insights into your potential target audience. You can use solutions like SEMrush to determine which pages and keywords your competitors rank for.
There are also tools to help you determine which search terms are gaining the most attention in your industry.
Some marketing analytics tools will also help you segment your audience into different groups when attracting customers to your websites and email marketing campaigns.
Social listening tools
Social listening tools are a particularly valuable solution for companies looking to build a niche audience. They allow you to pay attention to what customers say when they mention specific words, brands, or phrases online.
You can even monitor mentions of your brand or competitor’s name or products on different channels.
Monitoring the conversations customers have online can make it easier to see how people perceive both your brand and products and the solutions other companies already have to offer.
How do you target a niche audience? Quick tips
Once you’ve found a niche audience, you must take some extra steps to ensure you’re targeting the right group. This should reduce your chances of wasting time and money on a niche too small for relevant growth. Before you dive into marketing:
Qualify your audience
Make sure your audience is large enough to generate ongoing revenue and opportunities for your brand.
Look at your competition, and examine the marketplace research available online. Think about the keywords you will target with your content for this audience, and find out their competition levels.
Monitor your audience
Monitoring your niche audience and listening to their feedback about your brand will help you to ensure you’re making the right impression on your customers.
You’ll want your marketing and promotional strategies to position you as your niche group’s ideal partner. You can monitor your website’s social mentions, traffic share, and conversion rates to learn more.
Prepare for change
Keep in mind your audience, and their preferences might evolve.
As your chosen industry evolves, you may need to focus on new ways to preserve your audience. This will be particularly crucial as new competing brands enter the marketplace and interact with your customers.
Niche audience examples
If you’re having a hard time figuring out what a niche audience might look like for your brand, it may be helpful to start looking at some existing examples. There are plenty of great companies out there who have achieved fantastic results by focusing on niche customers.
Some great niche audience examples include:
Zipcar is a company focused on the car hire landscape. Users sign up and book a car by the hour or day, making leveraging the automotive support they need easier without excessive expense.
The company has differentiated itself specifically by targeting urban-based millennial consumers and younger clients who can’t afford a car full-time.
Because millennials spend a lot of time on social media, Zipcar has focused a lot of its marketing and branding efforts on Facebook and Twitter. This has led to a high level of audience engagement.
2. Whole Foods
While not everyone would think of Whole Foods as a niche business, it has a specific target audience. The company focuses exclusively on conscious customers who have more money to spend and champion health and wellness.
Whole Foods focused on organic foods and similar trends before they became a mainstream concept.
Today, consumers trust Whole Foods to deliver quality, organic products which are ethically and environmentally sustainable. One of the reasons Amazon purchased Whole Foods was specifically to access its unique target market.
The leading Patagonia fashion brand doesn’t just focus on customers who need access to high-quality outdoor clothing.
They target active individuals who want to influence the planet positively. The company commits to reducing the planet’s footprint with recycling and resource management strategies. It also has a range of social responsibility programs.
Patagonia ensures consumers can access the durable and reliable products they need in the clothing landscape without compromising sustainability.
Marketing to a niche audience: Top tips
Finding and defining a niche market is only the first step in ensuring you can impact a specific group of customers. Once you’ve identified the people you will be selling to, you also need to ensure you have the right marketing strategy to reach them.
Although the marketing strategies different companies use can vary, most strategies will involve some of the following steps:
1. Creating custom content
Companies targeting a niche audience focus on creating hyper-personalized and relevant content. This could include the development of blog posts, videos, podcasts, and anything else which might entertain and engage the right consumers.
Notably, niche companies concentrate heavily on speaking their target audience’s language. This means generating the right tone of voice and researching the keywords, questions, and phrases customers might be searching for.
2. Promoting on the right channels
Creating the right content isn’t enough. Companies also need to ensure they’re placing that content in front of the right audience, in the correct places. This could mean promoting information on social media channels you know your audience already uses.
Specific hashtags can be particularly valuable for drawing the attention of a niche market.
Niche companies might also focus on different forms of promotion, like interacting with their customers in person through ads in stores or sending emails to a specific group of leads. The key to success is ensuring you’re present on all the right channels.
3. Partnerships and influencers
Many niche audiences already have specific people or groups they trust to help them guide their purchasing decisions. Working with influencers, partners, and affiliates can be an excellent way for a company to reach out to its niche customers and gain credibility.
Influencer marketing can be particularly valuable for niche companies, as it’s generally more emotional, intimate, and engaging than most traditional forms of marketing. An influencer can convince your audience to trust your brand, and start learning more about your solutions.
Leveraging the power of the niche audience
Now that you know the answer to “what is a niche audience, ” and you’re familiar with the pros and cons of approaching a niche market, you can ask yourself what kind of consumers you should be targeting.
Although a niche audience may have limited growth potential compared to a mass market, it can also offer a range of phenomenal benefits.
Focusing on a niche audience helps you to refine your marketing and sales strategies, save money, and develop a stronger brand. The key to success is finding the right niche audience, and figuring out how to connect with your consumers in a way that drives engagement.
Niche marketing can take a lot of work to master, but it’s worth the effort to outshine the competition and unlock new sales.
Fabrik: A branding agency for our times.