I thought I knew what I wanted…
All too often for me, that’s how my story begins.
And this product creation journey is no different.
When I came up with the idea to do an experiment and journal my experience with the ConvertKit Product Creation Masterclass, I thought I had the target market I wanted to pursue all worked out. But I guess not…
Target Market or Niche?
Before we go any further, let me define a couple terms so we’re all working on an even playing field and because their definitions are different based on which textbook or website you look at. Here’s what the terms mean to me:
When starting out, you’ll almost always be better off marketing to the smallest niche you can that has a proven desire for your product and an ability to pay for it. Once you figure out how to reach and service that niche successfully, you can expand by either:
- duplicating your efforts in another similar niche, or
- selling different products or services to that same niche.
Once I choose my target market, I’ll use these same steps to identify a profitable niche. The numbers will just be smaller (and harder to find). The first order of business, though, is choosing my target market.
Choosing My Target Market – Indecision or Opportunity?
I use ThriveThemes to run this site and a couple others. I’ve done a fair amount of customization of the sites. I can answer many routine questions people ask without too much struggle or research. So I thought I would develop a business and my first digital product around that niche.
But the, as I was working on other things, I ran across the idea of imposter syndrome.
Imposter syndrome intrigues me for several reasons.
- It seems to be almost universal. I even saw studies about college professors having it.
- I know from a number of mailing lists I’m on and people I’ve talked to on Facebook and in other forums that many people really struggle with it in relation to teaching online courses and developing online businesses or products.
- There’s a ton of academic and anecdotal research on it.
- There are a number of strategies to combat it that could be turned into products, courses, seminar, etc.
Then, a third shiny object came into my view.
For several weeks, I’ve been running some experiments using press releases to boost the search engine rankings of local businesses. I am beginning to see some real, trackable results in those efforts and continue to experiment.
I thought maybe I could do a combination of selling a service and teaching others how to do it.
If a businesses owner had more money than time (or interest), they could pay me to do it for them. And if they have more time than money, they could learn how to do it themselves.
How Will I Choose My Target Market?
What started out as a simple process has now morphed into a decision that needs to be made before the masterclass starts next week.
And a decision I don’t want to mess up. So how do I choose a market for my business?
Well, I’ve learned a couple things from my past experience and online research.
- I need objective (i.e. numbers-based) measures to compare these markets against one another rather the subjective (i.e. what I or other people think) measures.
- I need to base my selection on business (i.e. likely revenue, ease of business market entry, likely expenses) reasons rather than personal reasons.
When we were running the numbers for our Zippy Shell business before we invested in the franchise, we did spreadsheet after spreadsheet figuring all different scenarios…none of which were ANYWHERE close to what actually happened.
The problem was we didn’t have any hard and fast numbers to determine growth from, so we estimated everything. Zippy Shell had only been franchising for a couple years when we came on board, so there were only a handful of franchisees that could share their numbers.
None of the franchises were over a year or 18 months old, and none of them were in markets similar to ours, so we estimated.
And those estimates were way off.
So how can I make sure that doesn’t happen again? Great question…but I don’t think there’s a great answer.
But I have to start somewhere,, so I’ll do all the research I can and try to make the numbers as accurate as I can. At the end of the day, though, I’ll still have to make an educated guess…just like with Zippy Shell.
How to Evaluate Potential Target Markets
The trick to getting the most accurate and trustworthy information about potential target markets is to go straight to the people in the market. Find where they hang out online and off and go talk to them.
I’ll go into these steps in depth in future posts, but here’s the outline…
I’m going to go to Reddit.com, Quora.com, Facebook groups and LinkedIn groups. I’ll search Amazon book reviews and the comments on popular YouTube videos. The idea is to find out what real people are talking about, complaining about and asking for.
If I can’t find anyone discussing any of these burning pains in relation to ThriveThemes, imposter syndrome or improving search engine rankings for local businesses, I’ll know I need to go back to the drawing board. Based on the preliminary research I’ve done already, though, I’m confident at least one or two of these will be a great target market.
Once I know what’s being talked about online, I’ll start gathering as many market statistics as I can. Items such as number of potential customers, number of competitors and their offerings, and how much does the market spend annually on services I could provide. I’ll also look at competitors to determine common workable revenue models and holes in the market.
Finally, I’ll find a handful of people in the market and talk to them either in person, on the phone or by Skype. My goal will be to get feedback from real people to see what they think about the markets. I hope to get them to identify three things:
- What they think the market should have but doesn’t.
- What solutions they would find interesting and would actually pay for.
- What they’ve tried in the past to address their problems.
Choosing My Target Market: Like Making an Amazing Stew
Once I’ve got all this information, the actual process of choosing my target market will be a process of mixing the empirical data and the interview data.
Kind of like making a good stew, this is where judgment (and risk) come into the picture.
I will be trying to determine:
- Which market has niches that will provide a number of profitable product or service offerings that interest me?
- Which market has the pain points I can serve most profitably?
- Which market has the greatest growth potential and is also stable?
What am I missing? Leave a comment and tell me!
This is the first article in what I plan to be a seven part series on choosing a target market for your online business. The rest of the articles in the series are will show up below as they’re written.
If you’re interested in more articles on this from someone else’s perspective, here are a few I’ve found useful:
- Ultimate Guide to Starting an Online Business by Ramit Sethi on Growth Lab
- How Entrepreneurs Pick a Target Market by Scott Shane on Small Business Trends
- How To Choose A Market For Your Startup Or Small Business by Ross Kimbarovsky on the CrowdSpring Blog