The first thing that you think of when you create a product is the people who will be using it. You would like to think that everyone will enjoy the benefits of having your product and that this is the key to success. However, it is exactly the opposite way. Determining a specific customer niche represents one of the steps that will help you grow your business.

At the beginning, when you design and bring your product to the market, you might be tempted to choose a large target audience. Consider the following situation. You are running a software development business. Your product is an employee scheduling software application. It creates and distributes schedules of employees. Also, it monitors working hours, absences and overtime. Its description makes it look like a tool suitable for any company that wants to track how their employees spend their time.

However, this brings you to a point where you are targeting a very large audience. It is better to be more Specific and choose something more concrete. For instance, you can start by targeting the software companies from a particular region in your country. Not only will this make the entire process easier for you, but it will also offer you insights on how your product is performing with that particular customer Niche.

How to determine your customer niche

Establishing your customer niche is what determines the features of your product. It is the step that you start with and that has a great impact on your decisions.

1. Be specific

Think of the persons you would want to interact with and try to be specific. In this step, you will deal with segmentation. It consists of dividing the market into different groups of consumers who have similar characteristics and needs. There are 5 great categories of segmentation:

• Geographical
• Demographic
• Psychographic
• Behavioral
• Benefits sought

Segmentation helps you decide exactly who your customer niche will be. Targeting a specific group of people, such as software engineers, is not enough. You need to be even more specific than this. Targeting the West-European software engineers with ages between 25 and 45 years, who work in small software companies and have more than 3 years experience in the field, is a very specific way of segmenting the market.

2. Concentrate on your product

You know who your target audience is. You have studied their behavior and understand what their needs are. This is the moment when you begin to focus on your product. Its mission and all the features have to answer to all the needs of your potential customers. This step also emphasized the importance of a clear customer segmentation. It will offer you a clear idea of what your product needs to contain and how it should function.

3. Evaluate your customer niche

A great customer niche has the following 5 qualities:

• Customers are easily identifiable
• Customers can be accessed easily
• It has not been exploited or it has been neglected
• It is very likely to grow
• It helps you grow your business

After you have determined who your target audience is, you can evaluate it according to these 5 characteristics. If you find that some things do not match with your greater business vision, you need to rethink them. A niche that does not allow your business to grow might not be your best business decision.

4. Test the ground

You have studied your customer niche. You have worked on your product. It is time to see if your strategy works. Create a testing plan in which you release your product on the market and you make it available to your target audience. Remember that this is a test. The main purpose is to verify your hypothesis.

5. Start implementing it

This is the moment that you have been waiting for. You can now start implementing your got to market plan. Although you may wonder how everything will go, if you followed the previous steps, you should start to see results.

The benefits of targeting a customer niche

Here are 4 of the advantages you can benefit of by focusing on a customer niche:

Great targeted advertising

When your product is designed for a specific category of people, it becomes very easy to create ads that target them. You know who you want to reach, how to communicate with them and you are seeking methods with this purpose. This helps you create a costly-efficient advertising strategy that will bring you the right clients.

Efficient distribution

Determining a clear customer niche will help you decide which are the most efficient channels of distributing your product. Having a specific niche, you focus on distribution strategies suitable for achieving the best results in acquiring new customers.

Specific branding

Due to the fact that you know what your customers want, you know on what aspects to focus on your branding strategy. Important elements such as design, prices, product quality, customer service are created in a way to fit the needs of your clients. Therefore, your business manages to build a strong image and position on the market and, ultimately, to become an authority in your niche.

Great customer retention

You have created a product that fulfills the needs of a specific category of people. They have bought your product. You are continuing to promote it to them and offering them special offers. You have created the perfect context of customer retention. People will return to you because you offer a suitable product for them and give them incentives to do so. This translates for you into an increase in sales and business growth.

Focusing on a customer niche is a key element for your business growth. Study your target audience carefully, adapt to the needs of your customers and adapt this strategy to your business.

What is your customer niche and how do you concentrate on it? Share your opinion with us in a comment below.

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