How to Research a Niche Market

The following information on how to research a niche market is an excerpt from the book: Own Your Niche: Hype-Free Internet Marketing Tactics to Establish Authority in Your Field and Promote Your Service-Based Business.

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Before you settle on a niche, it’s important to investigate the demand within that niche, the opportunities and risks, plus the competitive landscape. Following are several ways you can research a potential niche.

Conduct Surveys and Interviews

One of the best ways to understand a market is to go right to the source. You can do this by conducting surveys, interviews, or focus groups with your intended audience. Ask important questions about what influences their buying decisions, how much they spend on related services annually, what they like and dislike about competitor solutions, what issues they need solved, and how you can meet their needs. A tool like http://surveymonkey.com makes it easy to collect information online. You may also want to purchase a mailing list or find other ways to reach your intended audience directly.

Look for Industry Data

Use Google to research your target industry or demographic through trade associations and related firms that conduct surveys on market demand. These organizations can help determine if your niche is growing and how much demand there is for related products and services. In addition, check your local library for a copy of the Encyclopedia of Associations.

If you have trouble finding what you need online, head on down to your local library and ask a librarian for help. There are all kinds of reference books and databases available free of charge.

Investigate Search Demand

Internet search data allows you to understand the demand for a keyword or phrase. You can interpret this information one of two ways. First, a search term that’s extremely popular demonstrates that there is market demand. The downside of this information is that the competitive landscape will likely be greater online because other website owners are also using this data.

A search term with slightly less popularity can still show you there is market demand, but may also be easier to penetrate as the competition will likely be smaller.

Google’s free keyword tool is a great place to start: https://adwords.google.com/select/KeywordToolExternal. Type in a search term to find out about its popularity on Google, along with similar key phrases that are related. For example, a search for “life coach” shows 368,000 global monthly searches. This proves that there is great demand for this term and thus, the life coaching industry. However, Google also indicates that this search phrase is “highly competitive,” meaning that there are many others vying for traffic from this search phrase.

A search for “life coach health” shows 1,000 global monthly searches, which indicates only a medium level of competition. So if you’re a life coach considering the healthy living niche, you can see that market demand exists and the competitive landscape may be easier to penetrate.

Another free tool by Google is http://trends.google.com. Here you can type in a keyword and get a graph of historical data showing how popular that term has been on Google search in recent years. You will also find demographic data showing the cities and countries that most search for the term.

Also check out Google’s Insights for Search: http://google.com/insights/search. Here you can discover search trends by location, category, product, or seasonality.

Evaluate the Competition

Understanding your competition is essential to determining whether your business can find a competitive edge in a new market. When I was in software sales in the Silicon Valley, we were urged to study competitors. This helped us position our strengths against their weaknesses, while also allowing us to prepare answers when asked about potential advantages the competitors had.

You can use the internet to find out all kinds of information. Start with your top five to ten competitors. Find out what products and services they offer, how much they charge, and what advantages they might have against you. You can also sign up for their mailing lists or call to inquire about additional details. Don’t be shy about this kind of research. You can bet they will be watching you, too.

Additional Resources

http://trendwatching.com – Provides monthly reports on a wide variety of consumer trends.

http://wikipedia.org – The user-generated online encyclopedia may provide some details and stats for specific industries or keyword phrases. Beware, since this is user-generated and data isn’t always completely accurate; however, sources are often listed and you may find links to additional research data.

http://pulse.ebay.com – A list of the most popular searches currently conducted on eBay.

http://forrester.com – Provides consumer and business data with technology, IT, and marketing categories.

http://quickfacts.census.gov/qfd/index.html — Find consumer census data by region including state, county, or city.

http://www.census.gov/epcd/www/guide.html — List of census data, including by industry.

http://infoUSA.com – Sells mailing lists, though you can use its search functionality to get insight into the size of your target market.

http://www.marketresearch.com/ — Database of market research reports (fee-based).

http://www.marketingresearch.org/ — Provides market research data and a directory of certified research professionals so that you can find and hire help for conducting market research.

http://www.scip.org/ — Association of Strategic and Competitive Intelligence Professionals, where you can find firms to hire for assistance.

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The above information on how to research a niche market is an excerpt from the book: Own Your Niche: Hype-Free Internet Marketing Tactics to Establish Authority in Your Field and Promote Your Service-Based Business. Get your copy today–and while you’re at it, pick one up for a friend, too!

Stephanie Chandler is the author of LEAP! 101 Ways to Grow Your Business.
She is also CEO of http://AuthorityPublishing.com, a custom publisher of
nonfiction books, and http://BusinessInfoGuide.com, a directory of resources
for entrepreneurs. Also visit http://StephanieChandler.com

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