Your Internet Business – Part 4
Choosing a hot target market
OK, now we begin to get into the real stuff.
As I said last time the biggest mistake most people make when starting a business is that they create or find a product first and then try to find people to sell it to. Despite popular belief (and teaching), that is completely opposite to the way that successful people operate.
The only sure way to success in any business is to pick the market first. However, not just any market. For you to be really successful you need to identify what we call a hot target market.
OK, so what is a hot target market?
We describe a hot target market as a group of people who;
- Have a good level of disposable income
- Are passionate or fanatical about something (a hobby, interest etc)
- Are insanely passionate to the point that they will pay higher prices for things to do with their hobby
- Are repeat buyers. They buy stuff to do with their hobby or interest over and over again.
Let’s look at a real-life example of what I’m talking about here. Let’s take one of the most popular hobbies/sports today, Golf.
People who take an interest in golf are usually fairly well off, they have a well paid job or business and are not afraid to spend money on anything they develop an interest in, after all the fees to join a golf club aren’t cheap and neither are the green fees (the fee you have to pay to have a game). Then there is the cost of all the equipment, special clothing etc.
So they qualify on the grounds of disposable income.
They are passionate about their hobby. When someone decides to take up golf they go to their local bookstore/newsagent and buy just about every golf magazine on the rack. They go to the pro shop at their local golf club or a main golf stockist and buy a set of clubs, golf bag, maybe a trolley, golf shoes, golf balls, tees and all of the little bits and pieces that go with playing golf.
Maybe they buy a tuition book or two or tuition DVD/video. They look into the cost of lessons with the golf pro at the club that they are thinking of joining… and so it goes on. They are passionate about it. That takes care of our second criteria.
Do you think that they buy the cheapest, discount, no-name brand clubs or do they go for a leading brand? Of course, they go for the leading brand – they need to be seen with the best. What about the balls? You can buy reclaimed balls in tubs quite cheaply but do you think they start out buying discount balls – no way.
You see what I mean, they are irrational, they are insanely passionate about their hobby. That ticks our third point.
Finally, they buy over and over again. Every time they go to play golf they just have a ‘quick look’ in the pro shop and always buy something whether they need it or not. That takes care of point number four – they buy over and over again, they are repeat buyers.
Now, before you all rush off to start a golf-related online business let me say that the general term golf is way too broad, too high level. If you were to look at a golf related business idea I would recommend that at the very least you should drill down to a much smaller niche within the overall golf market.
You could look at women’s golf, left-handed golfers, junior golfers or any smaller niche within golf where you would have much less competition. Don’t get me wrong, you need competition. If your chosen niche has no competition, it’s almost certainly because there’s no market and no chance to make money in it.
There are many really big players in the general golf market with very big bank balances who could easily price you out – if you even managed to get started. To be successful in any niche you need to study the overall market and find a very small niche within it that has a lot less competition.
Markets versus Niches
Before we go any further I think I should cover the difference between Markets and Niches, why people often get this wrong and what you should be looking for here. When I started niche marketing several years ago it was standard practice to create lots of websites in lots of different niches. We would research for a popular topic, identify a niche around it and build a site. Then we would go off and find another comletely different niche and build a site around that.
There were programs available, like Directory Generator, that could throw up a site for you in minutes so getting your sites created wasn’t a problem. The problem was, and still is, that when you have those type of niche sites you are starting from scratch every time. Each site has a completely different audience, so each time you start with no list to market to. What’s more when you have the site up and running and have created a list, you can’t market anything else you have to them, their are only interested in that one topic.
That’s why you should first think of markets. Find a big market that has potential and identify a niche within it. That way when you’ve built a list of buyers for that niche, you can identify another niche within the same market build a list for that product and then cross sell your product to your first list. In all probabability they will also be interested in your new product because it’s the same market. Do you see what I’m saying? Another key point here is that you would have a hard time competing for the keyword ‘Golf’ when you’re starting out but once you’ve built a list of buyers for a niche within ‘Golf’, you can then market anything about ‘Golf’ to them.
What if I already have a business that I want to develop?
If you run an existing business, the best way to identify a common requirement among your existing customers is to devise a short questionnaire and ask them what they want. What is their most pressing need or problem right now, what would they buy from you if you sold it.
If you run a hotel or guest house ask them why they are visiting the area, what are their interests and hobbies and are they associated with your area. Look for ways that you can supply them with more of what they are passionate about. Consider doing joint ventures with other businesses in your area that offer products or services that would be of interest to your visitors.
In fact, too few offline businesses consider doing joint ventures with fellow businesses that supply the same market. It seems alien to them to work with other companies, maybe because they are afraid the other company will steal their customers.
I have some bad news for you, they are not your customers. They already buy from lots of people. In many cases they buy similar products from lots of suppliers. Don’t you think that if you expanded what you were able to offer them by working with other companies on a commission basis you would build more loyalty?
When we change our thinking from just making money to how we can serve our customers better, we find that the money comes as a by product.
OK, back to where we were.
Having identified your market niche, pick a product or service that those people are searching for. In other words, instead of trying to find customers to sell your product to, find targeted customers and then ask them what they already want to buy.
Don’t even consider starting a business until you know exactly what your target niche market is. You must identify targeted customers first. Then, when you know your niche and what they already want to buy, you can come up with a product or service for them that you know they are already looking for.
Remember, it’s not the number of visitors your site gets in a day that matters it’s the number of targeted visitors that you get that is important. A smaller number of visits from people who are desperate and willing to pay any price to buy your product or service are far more important than thousands of general visitors who are just browsing.
Let’s get started
This is where the work starts. Yes – that’s right I said work.
Did you think that you could start an online business without doing some work? Listen, let’s get one bit of BS out of the way first – you can’t start ANY business online or offline without putting some effort in. You will see lots of ads these days saying that you can buy their business opportunity and sit back, do nothing and the money will roll in.
I know what you’re thinking – you got this email from someone telling you that he is making a fortune online and he doesn’t get off his rear end all day. Well I’m sorry to be blunt but he is almost certainly telling you a pack of lies.
Most of these people aren’t making any money at all. They are trying to sell you on an idea so that they can make some money but in most cases they aren’t doing it themselves.
The biggest reason for failure on the web today is because people don’t focus on one thing until they have it making money on auto-pilot before considering anything else.
There are just so many opportunities being presented to us today that staying focused is very, very difficult. My advice is to not allow yourself to get sidetracked. Follow the steps in this series and stick with it until you have it running like clockwork.
I’m sorry if this is not what you wanted to hear but I believe that what you really want in the long run is someone who will tell you the truth and hold your hand until you gain the necessary experience to go it alone.
There is some good news though, starting and running a business online is MUCH easier than it is offline. So take encouragement from that and let’s get started.
Next time we’ll look at identifying your niche market. How you decide which market to target, which one might be profitable is the area that prevents most people from getting going. That why it’s important to make sure you look out for the next part of this series.
Until then remember,
“Nothing Happens Until You Take ACTION”