Defining your niche target customer can be a real challenge for a small business owner. Still, once you have a clear idea of who your target customer is, it will enable you to develop content and marketing messages that will resonate with them. This is important because every small business has two challenges: limited time and limited resources. Therefore, it’s best to select a marketing target you can actually hit, and niche marketing is the way to go.

Finding Your Niche Target Customer

For your product or service to sell, you need to answer the question: who is your target customer? And the answer is never, “everyone.” If everyone can use your product or service, no one will. A target customer refers to the group of people with shared demographics who have been identified as the most likely to be interested in your product or service. Identifying your niche target customer will help you solidify your brand voice and allow you to focus your advertising dollars. And after that, you can identify your niche market, which is important for any company in the development and implementation of a successful marketing plan.

Defining and refining your niche target customer can be an ongoing process, especially as you gather more and more data to inform your process. To find your niche, look at the customers you already have. Is there a common customer? What services fill up most of your time? What product line is the most profitable?  Figure that out, and then define your niche target customer around that so you can develop a killer sales message that speaks to the specific interests and needs of that niche market. You’ll see an immediate increase in your sales and repeat business. Keep in mind that loyal customers spend more on their future purchases.

The best way to get specific about your niche target customer is to develop a customer persona with as much detail as possible. Answer the following questions:

• • Who is your target customer?
  • What is their income? How much disposable income do they have?
  • Are they a manager or rank-in-file employee?
  • Where are they located? Urban, suburban or rural community?
  • Are they male or female?
  • What is their age range?
  • Are they married or a parent?
  • What is their level of education?
  • What is their career?
  • What are their goals?
  • What inspires them?
  • What are their biggest challenges or pain points?
  • Where do they consume media and news?
  • What social media do they use?

You need to know enough that you can see your customer’s face. Remember, the better you know your customer, the better your chance of making the sale. 

Once you’ve identified the niche target customer, it’s time to articulate what makes them buy. According to Jennifer Sander, co-author of Niche and Grow Rich, “Niche businesses have a 25 percent better chance of surviving over ten years than more general types of companies.” 

What are the three things that make a good niche?

1. Your niche target customers strongly desire what you offer.
2. The customer pool is big enough to produce the volume of business you need.
3. The customer pool is small enough that your competition is likely to overlook it.

Developing Your Customer Persona

Now you need to drill down and develop your customer persona.

Once you nail down your niche target customer, you need to spend the time and use various resources to develop a better understanding of your customers’ thinking. Again, the idea is to put yourself in your customers’ shoes. Creating an accurate customer persona can help you accomplish this.

It will help you learn about their habits, behaviors, and interests. That way, you’ll be able to market to them accordingly. Customer personas can help you get more money from your existing customers and even attract new customers and engage your existing customers. And ultimately, this will improve your conversion rate. If you’ve never created a customer persona before, follow these steps:

Start with the basics and be specific.

The first step to developing a persona should be the person’s name and age.

Refer to your niche target market for this. For example, let’s say your brand appeals to women in their early 40s. If she’s 42 years old in 2022, that would mean she was born in 1980. Based on this information, we can refer to this customer persona as Michelle.

Next, determine where she lives.

While geographic location such as state, city, or region from your target market is a good start, you want to break this down even further.

• Does Michelle own property, or does she pay rent?
• If she’s a homeowner, is she in a condo complex or own a single-family home?
• Does she rent an apartment or own a house?
• What is her monthly mortgage or rent payment?

Finally, fill in specific details.

From here, you can begin to come up with more information about Michelle’s personality based on her living situation.

For example, you could say she owns her house with her husband, has two school-age children, and doesn’t plan to go anywhere. Alternatively, you could write that Michelle pays rent because she’s single and career-focused and doesn’t want to commit to one area for long periods of time because she’s looking to get promoted and is willing to go where the opportunities are. 

Make sure you’re relating this customer persona to your brand.

Let’s say your brand sells luxury custom closets. You wouldn’t be marketing to a renter who moves every year or so. Instead, you’d focus on a professional woman who owns her home and plans to live there for the next 30 years.

Assuming your customer has a full-time job, their career is an important part of who they are. They’re spending at least 40 hours a week at this job, so it’s a huge part of their life.

I’m willing to bet that their work habits factor into many of your decisions about reaching this person with marketing messages.

A person’s job may impact their happiness, schedule, and mindset. It also is directly related to their spending habits. The more money someone makes, the more money they can spend. You need to get this specific about your niche target customer so that you can deliver compelling marketing messages to them, especially where they spend time online.

Use the (X)(Y)(Z) Method

Using the (X)(Y)(Z) Method as you think about your business will keep things straight in terms of your target market vs. niche.

X = Your Solution

What is the result you are trying to generate for your client? It could be that you help them save time (like pet care and grooming) or make money (like helping them develop a new business venture).

Y= Your Target Market

Who is your niche target customer? For example, professional women 35+, stay-at-home moms, under 30 entrepreneurs, single dads, baby boomers, C-level executives, etc.

Z= Your Niche Focus

The narrowed-down piece of the market you want to capture. What do you do that helps you stand out in the marketplace?  People want to hire specialists.

Here are some examples: If you have a graphic design company, how about focusing on doing graphic design work for educational institutions? If you are a virtual assistant, why not focus on professional speakers who are often overwhelmed with the constant need to develop content and handle travel logistics? If you are an accountant, how about focusing on providing services exclusively to restaurants?

Identifying your niche target customer is an important first step in building a sustainable small business. Successful businesses generate repeat business. If you stay focused on your niche target customer and find new ways to serve them, it will lead you down a path to marketing success.