Entering a new market becomes a bigger challenge for businesses with each passing day. You have to deal with heavily bankrolled competitors, saturated markets, lack of experience and a sceptical customer base. But all these challenges become manageable once you find the right market fit for your product or service. Find the right niche, and your journey starts getting a whole lot easier.
Here is a three-step guide to get you started with finding the right niche.
Pitching Your Idea
My very first entrepreneurial pursuit was in the form of a chat platform to enable real-time communication in communities and marketplaces. Although live chat platforms were becoming popular and steadily gaining market share, my product did not become the hit I hoped it to be. You might ask why? The market wasn’t saturated, the product worked well, and it wasn’t costly. Why wouldn’t people buy it?
Well, unless your product is solving specific customer pain points, those which couldn’t be overcome by current market offerings, it will not sell. My product was a very nice feature to have, but not something customers would prioritise spending money on over other essentials.
Before you enter the market with your idea, ask yourself these questions:
- Are you solving a problem for your customers?
- Is the problem big enough to make customers pay to fix it?
- Are there enough customers with the problem?
If you answered “no” to at least one of these questions, move on to the next market segment.
It took me a whole year to move on to my next idea. It can be hard to let go of an idea you’ve nurtured so dearly, but the earlier you figure out something is not working, the faster you can move on to something that will work.
This time around, I took it slow. I looked at different markets where my idea for enabling real-time communication had room to grow.
Cloud telephony seemed like a perfect fit. Public cloud services had crossed $100 billion (Gartner, 2013) in market share and cloud telephony held a healthy chunk of that market.
The market segment was huge and varied and I only had to test the waters before jumping in.
Testing The Waters
Once you’ve fixed on an idea and a viable market segment with enough room to grow, it’s time to move ahead to finding the specific niche where you can stand out.
In my case, cloud telephony catered to a myriad of market segments that included telephony, education, healthcare, e-commerce, real-estate, manufacturing and so on. Where did my product fit in? That’s where a market test helps out.
We hope to achieve three things through the test:
- Find the niche where the product fits in
- Get an idea about market size
- Customer opinion and feedback
The market test should involve the most simple version of your product or a newsletter that you can throw out into the market, the bare essentials to help you achieve the above three. Market it and get it into the hands of as many people as possible. There is no fixed timeline for how long to keep the test going. In my case, it took a whole year for CallHub to find the right niche. But a more aggressive marketing strategy would have helped me there to shorten the timeline.
My test involved offering Voice Broadcasting services, one of the simplest forms of cloud telephony, to my customers. I worked to get the product into the hands of as many different market segments as possible that were using a cloud platform or were open to making the move to one. In the course of exploring the market segment, I wrote a CallHub integration with NationBuilder, a Customer Relationship Management (CRM) software that catered mainly to political campaigns. The integration was a hit and I started getting a steady stream of customers from the political campaigning niche. A market segment that I had not even initially considered, opened up to me because of the test.
I asked myself the three questions again and it was a resounding yes across all three. I finally found the niche around which I would mould my product.
Once you’ve found your niche, it’s time to ramp-up your product. This is the space where you can let your creative juices flow and make a product that will stand out from the crowd.
From a Voice Broadcasting service, CallHub evolved into a full-scale platform for campaign outreach that included Phone Banks, SMS marketing, Power Dialers, detailed analytics, integrations and multiple tools to accommodate every need of our target audience.
From this point on there is no looking back and your business is ready to take-off.
As you look to tackle new areas for growth, I’d like to leave you with five principles that were instrumental in aiding our growth:
(1) Customer Pain Points
Your product should be effectively identifying, addressing and solving customer pain points.
(2) Marketing Strategy
No-one buys a product they’ve never heard of. Find and explore every marketing channel.
(3) Competitive Pricing
Always give the best price possible to your customers.
Your product should always be adapting to customer requirements, feedback and new technology.
(5) Customer Relationships
It costs five times as much to attract a new customer than to keep an existing one. Keep your customers happy.
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