Shortly after I first started working online I became a member of Wealthy Affiliate. One of the main players in the forums there was Travis Sago (of BumMarketing) who had a simple rule people should follow if they wanted to succeed online:
- Find a starving crowd
- Find out what they want to eat
- Feed it to them
I would add an extra step between 2 and 3:
2.a) Validate it
Easy to say, but what exactly does it mean..?
Before we get into breaking that down, let’s assume that you’ve already worked out what industry you’re going to be marketing to. Most likely it’s an industry that you’re either interested in or know a lot about.
Within that industry you then need to find a niche that you can dominate. Again – you may already have a clear idea of this just from your knowledge and past involvement.
But let’s say that, although you know your industry, you haven’t yet identified your niche. In this case here are some steps you can follow:
Find a starving crowd.
This refers to finding a market niche, and here are some ways to do that.
There are thousands of forums online, covering pretty much any subject you can think of. Go to Google and do a search for forums relating to your area of interest – the industry you’re marketing to.
You’ll need to spend some time assessing forums that are worthwhile. While there are thousands of forums online, only a minority of them will be worth your time and effort. Find them!
They’ll be the ones with a large, active membership, where a reasonable proportion of the posts have a lot of replies, where rules relating to forum behaviour are politely but firmly enforced and where activity is current – meaning lots of activity in the past 24 hours and at least some activity in the past hour (but take the time of day and membership numbers into account!).
When you’ve identified and joined the right forum(s) take time to get to know the key forum members, and make valuable contributions wherever you can to establish a level of credibility and trust.
Find out what they want to eat:
As you come to know the forum you will begin to see a thread of frequently asked questions emerging. For example, Im a member of the Warrior Forum and one of the questions that frequently comes up is about members’ views on the best free autoresponder service.
This was so obviously an area that people new to marketing online were interested in that it prompted me to write a recent post on it. If you had particular skills or knowledge in this area it could provide you with a market niche to consider.
Once you find a niche that looks interesting you need to validate it.
So back to the Big G and type in a search for your niche term (‘free autoresponder services’, for example). See how many results come back. This is the number of pages that contain your search term or parts of your search term – potentially your competition.
To get a more accurate result you should place your search term in quotes: “free autoresponder services”.
Next you should check out the number of searches per month that are made for your term or similar terms.
There are several applications available that will give you both these answers and give you ratios of searches to results, competitive information and so on.
But you can save yourself the money by checking out the search results in Google and Yahoo, and using the Google Adwords Keyword Tool (free) to get an indication of the number of searches per month.
Yahoo also had a publicly available keyword tool, called the Overture Keyword Selector Tool. This was better than the Adwords Keyword tool but it appears to have been taken offline.
I understand that Yahoo is upgrading it, so it would be worth checking for it periodically, because the old version had more functionality and enabled you to get more granular results than Adwords – it was more helpful as a result.
You’re looking for a high number of searches and a low number of results. This would indicate that there’s a lot of interest in the niche (high number of searches) and it’s not particularly competitive (low number of results).
But beware: a low number of results could also indicate that the niche is not profitable!
So how to get an indication as to whether the niche is profitable?
Check the sponsored results on the right hand side of the search results pages.
You don’t want too few – that would imply that the niche is not profitable – and you don’t want too many – indicating too much competition.
I generally feel that if there’s between 1 – 3 pages (11 – 30 ads) of unique sponsored results this would indicate a niche that’s potentially profitable and not too competitive.
You then need to monitor these ads for a week to 10 days.
If the majority of the ads are consistently being displaid over a reasonable period of time this, again, would indicate that the niche is profitable, because these ads would soon disappear if the niche was not profitable!
Feed it to them:
Once you’ve found out what your starving crowd wants to eat, and validated that it’s a potentially profitable niche, you need to feed it to them – which is the easiest step of all.
You can either develop your own product or find an affiliate product that meets the needs you’ve identified, and then set up your marketing campaign.
Setting up a marketing campaign and promoting your product is the subject of another article – today we’re identifying your niche!
Check out eBay:
Another way to identify what people are searching for is to check out the most searched-for items on eBay.
eBay is the biggest online marketplace and people who make searches on eBay are people who are actively looking for something – they’re ready to buy.
Here’s a great starting point for finding out what people are searching for on eBay – it’s an index page of eBay searches.
Once you identify something that’s being searched for regularly on eBay, and within the market industry you’re targeting, you can then go back and do the validation process I described earlier.
Off-line niche hunting:
As with so many aspects of running an online business, don’t limit yourself to online activities and resources. Go off line. And that applies to market research too.
Here’s a great article on how to use bookstores to identify profitable market niches. It’s a guest post by Jason on Copyblogger and very well worth a read. (Off topic, I know, but Copyblogger is the best source of copywriting tips I’ve come across – and it’s free, so I don’t get any commission for saying that!).
So, to summarise:
Find a starving crowd: know what industry you’re targeting and join relevant forums, research eBay or research bookstores.
Find out what they want to eat: become active in the forums and look out for questions that are asked frequently, look for very targeted searches on eBay or magazines focused on a tiny niche within your market.
Validate your niche: check out the number of searches and results in a month, check out the sponsored ads and see whether there’s a regularly published off line magazine focused on your niche.
Feed it to them: Develop your product or find an affiliate product and develop your marketing campaign.
So how do you identify profitable niches? Leave a comment letting us know about useful techniques you’ve used to identify profitable niches!