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Niche Marketing That Works

Posted on 5.31.2013

It’s a data-driven world, and Internet pros are just living in it. Those truly thriving in this new era are using big data to refine audience targets to reach the most responsive segments. This is why marketing smaller and smarter, is so appealing today to brands of all sizes.

How Niche Marketing Works

Niche marketing represents a shift in marketing tactics from the general to the specific. An effective niche-marketing plan will be hyper-focused on satisfying a particular need of the prospective consumer base. A niche market could be a creative new product that fills a market void, or it could just be a fresh spin on a classic product. For example, say a wheat farm has been in a family for generations and sells its bread products to national grocery store chains. A farm employee discovers that its Buckwheat grain can be part of a gluten-free diet. With the current prevalence of Celiac disease (gluten intolerance), the farm begins producing gluten-free, Buckwheat bread and markets it to people with this very specific need. This niche marketing highlights the farm’s innovation and tangible worth. This can not only make the brand more competitive, but its marketing messages should also foster a wordof- mouth environment (as minimal gluten-free breads are available), which can lower marketing costs.

Implementing an Effective “Niche” Strategy

A successful niche marketing strategy will also serve as an authoritative voice in the market. As a company develops a product, it must be aware of the interests and desires of the niche market in order to connect with them.

Utilizing data is the surest way to develop an understanding of a niche market. Let’s go back to the farm. By gathering data on those with Celiac disease (e.g. age group and gender most likely to have it) and who purchases gluten-free products (e.g. moms for their children, Californians, etc.), the farm can market to an even smaller audience. In turn, it can optimize the display ads they deliver, the social media posts they share and/or the terminology they use in email campaigns to address these specifics.

Identifying groups to target is the primary motivation for studying data. Different types of targeting are more effective for various markets, so concentrating on the appropriate targeting style will generate a higher rate of response. For instance, a company might engage in whole human targeting, which means that it takes into consideration occupation, demographic, personality, social affiliations and interests. Alternatively, the marketers might find that literal targeting is more productive for them, meaning that they market their product to obvious clients (e.g. gluten-free bread to those with Celiac disease).

For a traditional marketing specialist, the transition to relying heavily on data can be a challenge. Many are prone to following their instincts. In many cases, this approach is fruitful, but without data to back it up, the marketing strategy developed in this fashion is likely to lose potential clients it never even knew it had. To create the most profitable niche marketing campaigns, it is essential for professionals to increase their use of data analysis. A recent survey by Infogroup Targeting Solutions and Yesmail Interactive shows that only 11 percent of marketers are focusing on data. At this rate, robotic algorithms will overtake marketers in just a few short years.

However, data cannot run word-of-mouth promotions on its own, which is an essential element for niche markets. Marketers must create messages that foster environments where word-of-mouth can occur.

One example of productive word-of-mouth marketing is AHI Travel. The niche travel agency is listed with alumni associations and provides an alternative take on traveling that is highly focused on immersion with people and culture, instead of just tourist attractions. The founder’s innovative idea to target alumni expanded his consumer base and initiated a word-of-mouth marketing strategy that continues to grow.

What marketers should learn from this example is that the most effective niche marketing campaign will include unusual tactics that connect with its consumer base on a personal level (e.g. the school they graduated from), as well as the insight gleaned from data analysis (e.g. the median salary of particular school’s alumni or travel destinations that are popular with certain groups). In order to avoid becoming obsolete, marketers must bring to the table a winning combination of data evaluation and usage, as well as demand-driven products that inspire word-of-mouth sharing. Together, these tools will be able to produce highly profitable niche marketing campaigns that will continue to grow as the niche market expands.

About the Author: Amie Marse is the founder of Content Equals Money

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