Take a Niche, Grow a Mile

Suppose in the past you marketed randomly by generally targeting all women ages 25 to 49. You'd examine your customer base and divide it into groups that manifest important qualifying criteria -- whatever would classify them as being your best or ideal customers -- such as women in that age group who work outside the home, book travel online or dine out six times or more per month.

Next, as you segment your customer base into groups with similar characteristics, you may find that some of the groups that presently account for a small percentage of your sales show potential. These can become separate niche markets that will warrant unique marketing campaigns with different messages or offers.

2. Fill a Need

Sometimes you have no past customer history to go on when choosing a new market niche. In that case, you must make some preliminary assumptions about your prospect base. Focus on the customer you want to reach. Who has an identified need for what you market? Who is buying something similar now? It's easier to fill a need than to create one, so smart marketers look for potential buyers who know what they want and are buying it elsewhere.

Once you've identified prospects that have a need for what you market, evaluate the offers made by your potential competitors. The only way to beat them is to know them well and provide a product or service enhancements that are presently unavailable to their customers in that potential market niche. The key is to enter the new niche with a product or service that is widely accepted, yet add an original value proposition that prospects can't refuse.