Differentiating your brand from fierce competition is a challenge, but the answer lies with your audience. Adding a niche-marketing approach to your digital strategy is your solution.

It means you’ll be meeting consumers on a much more personal level and catering specifically to their needs. The content, for example, that Coca-Cola makes for its general consumers is very different to the content that it makes for restaurant owners, because the needs of each niche are completely different.

Once you identify a niche market within your audience, you can target members of your niche market outside of your current customer base more precisely, because you know exactly who you’re looking for.

This is market segmentation, the practice of dividing larger markets into smaller ones based on the common characteristics of the individuals within the larger market. Market segmentation lets brands create customized niche-marketing campaigns personalized to each identified market segment.

Market segmentation also makes it easier to efficiently search for lookalike audiences outside of your identified niche market, carry on with retargeting or geo-targeting strategies, and work on fine-tuning and further personalizing email-marketing segmentation.

Basically, niche marketing differs from general marketing because it focuses on a specific subset of an overall audience.

The niche market definition on the Business Dictionary website says: “Concentrating all marketing efforts on a small but specific and well-defined segment of the population.”

In addition, niche marketing enables brands to reach profitable customers in a more personalized way, which improves conversion rates.

Read how savvy brands in finance, fashion and education make marketing gains, and learn the tips to find and woo your own niche markets.

Niche Market Examples

Canadian shoe company Poppy Barley offers “polished everyday footwear for kick-ass people who don’t have time for sore feet.”

Fashion & Beauty Benchmark Report

The company targets urban professional women, and now men, willing to pay a premium for comfort. Each demographic requires a different marketing approach.

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Image property of Poppy Barley.

In the world of finance, New York City-based Quontic Bank has successfully connected with the increasingly diverse American population needing personal and business banking services, including mortgages.

Recently MarketWatch reported that the bank’s customer base is “75% immigrants.” Quontic Bank focuses separately on niche markets such as New York City, Atlanta and Miami neighborhoods to target immigrants ready to buy a home and get a mortgage.

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Image property of Quontic Bank.

In the field of education, Virginia Wesleyan University markets its business degree to a very specific group of aspiring students — those who want a one year, online bachelor’s degree focussed on skills needed in today’s digital business world, such as digital marketing and entrepreneurship.

Demographically, income and location are important features shared by this niche market looking for an affordable online degree that fits their financial situation and lifestyle.

Characteristics of a Niche Market

A key characteristic of a niche market is that as part of a larger group, niche-market members have different (and specific) needs and wants, in addition to the ones that they share with the rest of the group. Yet, these needs aren’t adequately provided for, and this creates a problem or ‘pain point.’

eCommerce platform giant Shopify’s niche market definition is “a subset of a larger market with its own particular needs or preferences, which may be different from the larger market.”

Poppy Barley‘s niche-market customers want fashionable shoes like the larger customer base, but unlike shoppers in the broader market, they’re unwilling to sacrifice comfort for fashion. The specific pain point here is the actual physical aches and pains that results from squeezing feet into uncomfortable, but fashionable shoes.

Millions of Americans are searching for banking services, but the new audiences of immigrants that Quontic Bank targets need to communicate in their first language, which often isn’t English. The unique pain point for these customers is the frustrating language barrier that prevents them from communicating their mortgage needs and questions.

Aspiring business students attracted to Virginia Wesleyan University differ from the broader student base because of their specific problem regarding accessibility. Their pain point is the limited time and resources to travel to another location to study innovative business topics that will help them to succeed in digital business.

Pros and Cons of Targeting a Niche Market

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Niche marketing has both pros and cons for brands.

Niche Marketing Pros

Price point.

Among the benefits of niche marketing is that niche products or services can command a higher price, because the target customers will pay a premium to get precisely what they want or need.

Conversion rates.

Members of a niche market have much in common with each other. Once you clearly identify their unique ‘pain point’ or ‘passion,’ you can create highly-focused personalized messages and CTAs that resonate and convert well. With today’s gains in big data, artificial intelligence and automation technology make niche marketing more efficient than ever before. Now brands of all sizes have access to powerful tools for prospecting, collecting demographic information, creating detailed customer profiles, testing, and then re-marketing with additional information. Using this data to connect with a niche market can position even smaller companies for success.

Personalized messaging.

Additionally, niche marketing strategies give you the opportunity to reach consumers with personalized content and messaging supported by technology. You can create a seemingly intimate relationship with individuals in your niche market when you gain access to their email inbox and address them by their first names.

Niche Marketing Cons

Market size.

Niche markets are smaller than traditional markets. So although your brand may enjoy higher profit margins, you could also have fewer sales.

Another downside to niche marketing is that it’s tricky to identify the point where a niche market is so small it is not profitable.

Smaller companies that are still in the growth stage may struggle to expand brand recognition with niche marketing, because their small target-market size means limited exposure.

Once your company becomes the choice brand for your niche market, growth in that market will hit a cap, so you’ll have to expand to other niche markets or other products and services.

The best niche markets include well-defined, easy-to-spot consumers who grapple with a profitable pain point or passion.

How to Find Your Best Niche Market

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The best niche markets contain consumers that need their problems solved or passions resolved, and they’re willing and able to pay a premium for it.

To identify the optimal niche market for your industry, start by looking for easily-identified mini-markets within your customer base.

  • Consider what they’re buying, and how often, and how your own products or services are meeting or missing the mark.
  • When you find a need that isn’t being met — a segment of your customer base with a pain point or a demand that’s broad enough to make it profitable, you’ve found a potential niche market.
  • Watch out for opportunities to tweak and replicate your product across cultures, professions, and age groups.
  • Also take a close look at your competitors’ customers with an eye to finding gaps that your business could fill.

6 Ways to Beat Your Niche-Market Competition

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To beat your niche market competition, you’ll need to efficiently identify a profitable niche market, and then connect with that market so effectively that your company becomes their ‘go-to’ brand when they’re ready to purchase your goods or services. Use these tips to win their business.

  1. Find the Unidentified and Unserviced Pain Point—what pain or passion is enough of an irritant or desire for your niche market that they’re willing and able to pay a premium to alleviate it? Think of Poppy Barley — career women willing to spend money on luxury, fashionable, yet comfortable shoes. Find the problem, solve it, and present the solution.
  2. Become an Email Segmentation Whiz—if you haven’t yet mastered email segmentation, it’s time to learn. Email segmentation simply refers to dividing up your email list into different groups. This might be based on how you acquire their email address, what they click on in your emails, or other criteria chosen by your marketing department to reflect their particular potential pain point. According to email marketing provider Mailchimp, segmented emails have a 14.31% higher open rate than non-segmented emails. Even more compelling, segmented emails have a 100.95% higher click rate than non-segmented emails!
  3. Master Retargeting—use an automated retargeting tool to present targeted advertisements to users who have already visited your website or clicked on one of your ads. Current figures suggest 75% of consumers notice retargeted ads.
  4. Create Niche Content—niche markets need to see content they’ll immediately identify with, so get very specific with your articles, posts, landing pages and graphics. Quontic Bank, for example, uses many images, including visible minorities on their site — appealing to their niche market of immigrants who need a mortgage to become homeowners.
  5. Use Local Niche Marketing—if your niche market lives, works, or shops in a specific geographic location, include push-app notifications or text messages to smartphones in your re-marketing efforts.
  6. Reach Out to Micro Influencers—micro influencers are non-celebrity bloggers and social media personalities with whom your niche market identifies with. According to an Experticity survey, 82% of consumers are more likely to listen to recommendations from micro influencers. The fashion industry is full of examples of brands using micro influencers to connect with niche markets.

    Examples include the ASOS brand’s partnership with Instagram micro-influencers; and fashion/lifestyle subscription box FabFitFun’s partnership with multiple ‘mommy bloggers’ on Facebook and Instagram. Use a service like Upfluence or Buzzsumo to find the micro-influencers in your niche.

Today’s technological advances and digital culture gives marketers more opportunities to serve niche markets than ever before. Learn how to rule a market niche by focusing your marketing game on a smaller audience, not a bigger one.

Key Niche Marketing Takeaways

Remember these key points to help your brand achieve niche marketing success:

  • Niche marketing involves focusing on a specific subgroup with shared characteristics and at least one unmet pain point.
  • Identifying a niche allows brands to create highly targeted and personalized messages to niche market individuals to increase conversion rates within an existing customer base, as well as efficiently market to the outside niche market
  • Study how successful brands in industries like fashion, finance and education win their niche markets—then apply their techniques to your market.
  • Identify pain points, master email-marketing segmentation and retargeting, create niche content, focus on local niche markets and partner with social media influencers to create a winning niche marketing strategy for your brand


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