How To Find and Dominate the Perfect Niche Market | by Amid Sedghi
In the previous series of blogs, we discover the technology adoption lifecycle, the gulf between two market segments. Now that we know all about the chasm and the strategies involved in crossing it from the innovators market segment to the early adopters segment, we need to learn more about the details. What do we need to do to identify the niche market we are going to attack? The one we are going to attack in the manner of D-Day.
We are already establishingre that it is easier to dominate a niche market. Everything seems easy. We take a large market segment and categorize it into smaller segments based on size, potential revenue, distribution methods, etc., and we pick one and attack! Well, that’s a lot easier said than done, mainly because there isn’t a lot of information available to make such a big decision, which leads to a high risk situation with little money. data.
So what do we do when there isn’t enough data to make a decision? The goal is to choose a niche market where there is convincing evidence that our product would be successful. But we ignore the market reaction to a brand new product that customers have never seen. What are we doing? Do we collect our own data? It would take years. Even if there is digital data, it could be completely meaningless. The solution will seem silly, but it will rely heavily on educated intuition.
The solution begins with the characterization of the target customer. We need to recreate the character of a typical customer. And in the case of not knowing what the customers would look like, we have to invent them and invent as many as possible. After a while, the models will lead to a common point between the clients where we can identify some basic types. Once the types are identified, we need to aggregate a library of customer scenarios and write down in detail a customer’s experience before buying the product until they use it. Next, we need to assess each customer scenario.
It is very important to know how to do the evaluation. There is a specific set of ground rules that we need to take into account before we evaluate the scenarios. The list below identifies each and provides a small description of what it is:
- Target customer: the customer must be a real buyer
- A compelling reason to buy: the product must be worth buying
- Whole product: customer satisfaction is key
- Competition: there are others that meet these needs
When scoring, the compelling reason to buy takes precedence over all others, and can therefore be used as a deciding criterion when comparing two customer scenarios.
- Partners and allies: Partnerships that allow the supply of the entire product.
- Distribution: There is a sales channel.
- Pricing: The price must be adjusted to the expectations of the customer.
- Positioning: There must be some credibility with the target market.
- Next target customer: adjacent niches must exist
Once all the reviews have been completed, the goal is to eliminate poorly rated customer scenarios. If we have more than one scenario, a tie-break is necessary. The tiebreaker should be the evaluation of the segment that would offer a better positioning in terms of domination of adjacent markets. In other words, which segment can be identified as the bowling head that will lead to a domino effect. No matter what the outcome, we must always move forward.