One of the biggest challenges a new business owner faces is finding his/her niche market. Identifying and targeting a niche market is the foundation of all marketing activities. Ideally, a business foundation is built upon meeting the unmet needs of a target market.
Micheal Gray was inspired recently by an announcement made by an airline stewardess. In his post, Untapped Niches and the Mile High Club
“think about the markets other people shun or stay away from, find creative ways to fill a service people want that no one else is offering. When you have niche where the number of people who are willing to compete is minimal you can command higher prices and profits. “
This is an example of creating a business around an unmet need.
While Micheal’s idea is inspired, it’s important to note that higher prices don’t necessarily equate into higher profits. Higher prices are usually the result of the increased cost of customer acquisition or increased costs of serving a specialized market.
When there is a “hidden” niche market, it’s usually for a reason. For example, last year I launched a partnership focusing on targeting a tightly targeted niche market. Our tightly targeted niche market are coaching professionals who are launching their business and need a web site. Several dozen web sites later, it became OBVIOUS why this market was “hidden” and “untapped”. (Truth be told, it wasn’t very hidden… several other web development companies have targeted that niche market. We created our product to fill the gap when one of these companies decided to close up shop.)
See, coaches are highly talented and creative individuals. As a group, they need a LOT of hand holding and instruction. Most are intimidated by the web and as boot strapping entrepreneurs…. they need a lot of instruction, a lot of hand holding but offered at a minimal price.
On our end, we had to put in a LOT of work “up front” creating a structure for providing for this niche market’s support needs. While to the casual observer, it appears we’re making high profits…. we really aren’t. Support is literally eating up most of the “profits” of the business at the moment. If I were to outsource support… the profits from this partnership would literally disappear. As a result, we recently revamped the pricing structure of the product to reflect the cost of providing this support.
The moral to this story: there’s a reason “hidden” niche markets are hidden. However, creating a product or service for that hidden market may indeed be your path to business success… just be prepared for the “hidden” reasons why your undiscovered niche market is up to now, undiscovered!