Find Niche Markets of Living, Breathing, Hungry Clients
To pick a viable niche market. The single most important decision for any business, freelancer or not. For your success, the market you enter matters most. Neither an awesome person (you) nor stellar creativity, design or marketing skills will compensate a bad market. Picking a great niche tends to equal success. Picking a poor market tends to equal failure.
Since 1988, Ilise Benun (Marketing Mentor) has been coaching freelance and small business creatives. I asked Ilise “What are the key questions to ask before entering a niche?” Read her response! In it, Ilise identifies the 7 key questions your niche research must answer! Let’s get right into it!
1. Is the Niche Growing?
Is THEIR market growing? You’ll find out by asking people in the market and by reading the business press. Look for publications specific to the market to gauge the health of the market. Also, use websites that provide statistics for industry growth, e.g. Statista or Sageworks.
If the market is shrinking there is likely not going to be enough business for you to build a stable business.
Good signs for viable niches are:
- The industry press is reporting positive news (the opposite is a red flag.)
- Revenue for the industry is increasing (vs. stagnant or decreasing.)
- New players are entering the market (or not.)
Example: Print designers are becoming the creative industry’s equivalent to the dinosaur. Beginning of 2004 people was still searching more often for “print advertising” than “digital marketing.” Since then the gap has widened for each new year. End of 2012, Google alone made more money from ads than ALL of U.S. print media combined (The Atlantic.)
2. What Size and Type of Projects Are Available?
Will available projects pay the fees you need? If you need to need to charge $5,000 for a website and the market can only afford an average of $1,000, it’s not worth your time pursuing. Also, do the available projects fit with your experiences, skills and interests? Will you be able to handle the project size?
You will find out this by attending events and/or finding LinkedIn groups where you can ask a question. This is usually the best way.
If people respond, that’s a good sign. If the information they respond with corresponds to your needs, that’s even better (and vice versa, of course).
Other online and offline resources through which you can find people to ask:
- Member directories of trade associations
- Participant lists of trade shows/industry conferences
- Your local chamber of commerce, especially if you target small businesses
- MeetUp groups
- People in your own network
3. Do They Know They Need Your Services?
Your marketing time and effort is most effectively used when you can speak to people who are already aware of their need, rather than spending your time trying to convince someone they need your help.
“You have to find out if THEY think they need your help.”
Networking also can get quick answers to this question. Find prospects who look like they need your help. For web designers/web developers, that could be companies with either no or an outdated/bad website.
For SEO consultants, that could be companies showing up on page three or below in Google.
The key here is to find out if THEY think they need your help.
Also, search the trade association for advertisers and associate members who you would consider your competition. If can find your competitors in the trade associations for the market, it’s usually a sign that the market has a need for the services.
4. Do They Value Your Services?
This is an extension of the previous question. If they know they need your help, and they also value those services, then it’s a good sign that it’s a viable market.
You will learn if there is interest through market research and conversations
Good signs are:
- Literally, people respond positively, seem open to hear what you’re offering.
- They are already using design services
- Their design is good
If you review websites of prospects and the web design generally is bad and/or old, it’s a bad sign. They likely don’t value design services.
5. Do You Like the People?
Business is about people and people like to work with people they like. So if you like them, they will be more likely to like you. And you will be able to develop stronger relationships.
You’ll find out through personal experience.
It’s a bad sign if you find yourself judgmental and intolerant of your prospects.
6. Can You Reach Them?
If the resources to access your prospects aren’t available to you (or are cost-prohibitive,) it’s better to know sooner than later.
In your market research, look for events to attend and directories with contact information for your prospects. If you can’t find the resources that allow access to your prospects (i.e. there is no trade association or events or directory), that’s a bad sign. (And vice versa.)
7. Are There Lists?
If you can find a list of your prospects with their contact info, that’s the holy grail.
A Google search using keywords, for example, “list of healthcare technology companies,” should turn up the resources you need, whether free or paid.
If you find a lot of useful information, that’s a good sign (and vice versa).
A Final Note
The trick in niche research is to know what to look for. It takes time to get used to what there is to find and how to find it. For example, on a trade group website look for resources in this order:
- Does it have events I can attend?
- Do the events address the issues I can help with? For example, is there a session about web design? Or branding?
- Does it have a list of members, open to the public?
- Does it have a list of members available to other members only?
- Is my competition already pursuing this market?