The 4 Laws For Finding Profitable Niches
Here’s what you’ve always been looking for…
The 4 Immutable Laws For Finding Profitable Niches – Closely Guarded Infopreneur Success Secrets Revealed
Infopreneurs care. You already know this. That’s a core principle of information marketing we’ve already explored in great depth and detail.
Infopreneurs care deeply about the people they set out to serve. They care deeply enough to seek to understand and investigate the problems their audiences face. And they care enough to try and find (or create) solutions to those problems.
Caring infopreneurs take this a step further. They work hard to bring these solutions to the notice and awareness of their prospects, in an attempt to enhance their lives in some way. In the process, they also profit fairly for their initiative and effort.
But to do this well and effectively, infopreneurs need to first correctly identify and define their audience.
Who Is Your Market?
No matter how well-intentioned you may be as an infopreneur, no matter how deep your pockets are, no matter how much of a go-getter and untiring worker you may be, there is a limit to the size and nature of the audience that you can reach and help through your information business.
“Everybody” is NOT your market. Far from it. And unless you enjoy the idea of throwing your energy, excitement and enthusiasm behind a doomed venture, frittering away all that time and money on a futile effort to dominate an undefined and vague “market”, you should first devote your entrepreneurial skills and resources to identify a niche.
What Is a Niche Market?
A niche market is a segment of a broader market, usually small, that you can profitably serve and target in a unique manner and fashion that adds value to its participants.
Let me explain that rather cryptic definition.
In the arena of finance, “Investing” is a broad market. There are endless forms and types of investments that fall under that umbrella term. Within this broad market, “Stock Investing” is a big niche. In turn, this has several sub-niches within it, like “penny stock investing” and “day trading” and “value investing”.
Each of these last three are niche markets. An investment consultant can profitably serve prospects in them, and do so in a unique manner that adds value to their lives and helps them maximize their investment dollars.
The key components that make up a niche market are the following:
- it is a segment of a broader market
- it can be served in a value-adding manner
- it may be profitable to do so
Why Niche Marketing?
Insurance, healthcare and entertainment are broad markets. There are billions of dollars to be earned from each. There are hundreds of millions of prospective customers in them.
Won’t it make more sense to try and enter those markets than niches?
Yes. It’s also incredibly expensive and effort-intensive to do so. Most of the big players in each of these niches are Goliaths, able and willing to invest huge fortunes in dominating their space. Rewards are large; risks larger. Savvy infopreneurs can and do play on this stage – but for most of us, it makes more sense to target smaller niches which are easier to dominate.
Here’s an interesting factoid to mull over. Often it turns out that less competitive small niches that are perfectly targeted to the offers you make can be vastly more profitable than gaining a tiny toe-hold in a bigger marketplace – especially when you can serve that niche with passion and purpose.
How To Select The Perfect Niche?
Is there even such a thing as a “perfect niche”? That’s a question I’ve been asked by dozens of beginners to information marketing. And frankly, the answer is “No”.
There are good niches. There are easy niches. There are profitable niches. But I honestly don’t know how to find (or what to call) the “perfect niche”.
What’s ideal and attractive as a niche market to you may well be a total turn-down for me – and vice versa. It’s more relevant and important to choose a niche that resonates with your unique interests, passions and over-arching purpose than to focus on what may seem a better fit for anyone else.
Which brings us to the big question – How to select your right niche?
The Passion Versus Profit Debate
Broadly, there are two approaches to niche finding…
- follow your heart
- follow the money
In the first approach, you choose a niche market to serve based on your own interest, skills, experience and passion for it. If you’ve been a teacher of primary school students for 10 years, you may find it an attractive proposition to build an information business around helping home-schooling parents teach their little ones effectively. Or if you’ve retired from the stress of being a corporate honcho, you may want to help others looking to make the same move as you did.
You let your heart guide you to the niche you feel most comfortable with.
In the latter approach, you take a more hard-headed view of niche marketing, choosing to study and analyze metrics such as market demand, profit potential, size of prospect pool, nature of products and services that can be offered to them, how they can be priced, what profit margin they can be sold for, and how likely it is that the niche will get you to your desired income targets.
You let your mind (and calculator) steer you to the most profitable niche.
Either of these approaches are ok.
I’ve known people successful with both ways of picking a niche. Personally, I place a higher emphasis on the role of passion in choosing niches to get involved in, but only because I believe it is easier to stick with things you enjoy doing than ones you have no flair or interest in. On the other hand, proponents of that way argue that the profits and success you’ll attain serve as motivation enough to keep going!
The bottom-line is that there are no perfect niches – and no perfect way to pick them. So don’t waste too much time on this, but instead keep in mind a concept taught by one of the marketing geniuses of our times, my mentor Jay Abraham. He says:
“The only risk you ever have to take, in business or in life, is an inexpensive test.”
So rather than get hung up on extensively researching a niche before you enter it, in the fond hope that you won’t make a costly mistake, it’s quicker and easier to follow your hunch and test any niche market you find promising… but do it on a small scale at first.
If things seem to go well, you can scale up your efforts profitably. And if you discover there isn’t much potential in that niche after all, it’s not very expensive to drop it and search for another one.
4 Immutable Laws of Niche Markets
Every time I’ve taught my students the “follow your heart” route of niche research, one of the first ‘objections’ to be raised is this:
“But what if no one else cares about the things I’m interested in?”
Look, you can’t take any of these suggestions or guidelines out of context – and still expect them to work for you.
Yes, the concept of selecting a niche that you’re passionate about will work… but only if that niche you pick also matches other critical criteria!
What are those criteria? Well, I call them the “4 Immutable Laws” – because they are all equally important to finding profitable niches. Any niche that ‘fails’ even on one of these tests will wildly under-perform your expectations, or require you to invest vastly more effort into entering and dominating it.
So without any further ado, let’s talk about them.
Law #1: Is there a market?
Markets are audiences, true. But all audiences are NOT ‘markets’.
A ‘market’ is a group of people or buying entities that share a common need or desire, one that you and your information business can serve or meet in a unique and differentiated way.
A line of people waiting for food outside a soup kitchen is an ‘audience’. But by way of ‘purchasing power’, they would be a very weak ‘market’ – because they don’t have enough money to even buy themselves food.
A group of hungry people arriving at your steak restaurant is an audience. But if they are all rigid and fastidious vegetarians who wouldn’t touch meat, then they aren’t a ‘market’.
I hope this distinction is now clear in your mind. Too many infopreneurs follow an approach that’s guaranteed to leave them saddled with large crowds of non-prospects – folks who will demand a lot of your scarce and precious assets like time, attention and energy, while being unable to deliver the return you seek from your investment into nurturing them.
So one of the first and earliest questions you need to answer for your information business is whether or not a market exists.
- Are there people with a common problem – one that you can help them solve?
- Are they aware that there’s a problem – or will you have to first educate them?
- Are they seeking a solution for their problem already?
- Are they finding the solutions they are searching for?
All these questions will help you address the issue of whether you have a market for your niche.
Law #2: Does your market want what you’re selling?
Ok, let’s assume you’re convinced that there is a market around your niche. The next step to take is to find out if the prospects in that market want what you plan to sell them.
Too often, infopreneurs fail because they don’t take this step early. Instead they go out and follow their heart – even in creating a product!
When they’ve wasted months trying to sell their fantastic ebook, and run out of money, patience or energy, they come to me complaining that infopreneuring is a sham and that there’s no way it’ll work in their niche.
I ask them one question: “Did you find out if your market wants what you’re selling?”
10 times out of 10, the answer will be “No, but I felt they want/need this!”
Always remember – You are NOT your market.
You are not representative of what they want or need. Even if you’re a ‘typical’ member of that market niche, your opinions, desires and choices may not be the same ones that others in your niche share.
A simple way to find out what your market wants is to look at what is already selling well, or running surveys to ask your target audience what they want.
Law #3: Can they afford to buy from you?
A non-profitable niche will not make you rich.
Keep that firmly in mind. You may still want to pursue a non-profitable niche, because that’s a choice driven by your underlying purpose. Not every infopreneur seeks to maximize profit. Not every dream needs a lot of money to achieve. Not every success is measured in dollars and cents.
With that said, if you’re building an information business hoping to make money from it, or even earn a fortune, then a critical element of your plan should be to evaluate your ideal prospect from the point of view of paying capacity.
If your prospects are all unemployed, facing financial distress, or saddled with other expenses and worries, you’ll face an uphill task trying to convince them to spend scarce resources on your business and products or services.
Also consider the pricing and positioning you will adopt in the marketplace, and match that against the disposable income your audience has. You may not be able to set yourself up as a provider of premium services to an audience made up of hyper-frugal business owners or bargain-hunting cheapskate buyers.
Law #4: Are you able to reach your prospects?
Let’s say you propose to set up an online marketing strategy to sell your digital infoproduct. What if you discover that your audience isn’t even online?
Your strategy is doomed to fail, no matter how brilliantly you execute your plan!
Knowing who your ideal prospect is involves also figuring out the places they hang out online, the sites they visit on a regular basis, and resources they use frequently. That way, you can tailor your marketing process to reach them at these locations.
Heavy users of email may be approached through an email marketing campaign. A younger demographic who uses email far less often may be better contacted through social media channels. And certain audiences may respond better to offline marketing via mobile phone communication or even direct mail or postcards mailed to their home or office.
Knowing where your prospects are, how best to reach them with your marketing message, and assessing whether you can do it in a cost-effective and sustainable manner are all key elements to planning your overall information marketing strategy.
As this short introduction to niche research has hopefully shown, being an infopreneur goes beyond caring deeply for your audience. It extends to clearly defining the segment of your audience that you’ll serve, and then deciding whether or not you will be able to serve them in a way that adds value while generating your business a reasonable profit.
The time to adapt, modify and refine your business plan and model is before you get underway. Rushing to “follow your heart” without carefully and critically analyzing these other factors that influence and impact your niche marketing success will only end up becoming costly mistakes that your information business may never be able to recover from.
Not knowing these things, or not caring to follow them strictly, is the reason why over 95% of information marketing beginners give up and abandon their dream within three years of starting out. You will be able to overcome this reality and be a part of the successful 5% just by carrying out your due diligence and finding a niche that is worth going after – and then dominating it completely.
All success
p.s. If you haven't yet read my free "The Smilenaire Way" report, grab your copy here - and decide if you're ready to start smiling every day in your business. (When you are, click here)
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