Yes! YES!

Let’s take a minute to go back over the foundation — two key understandings frame and support a well-defined niche market.
A business that cannot answer those two questions specifically and explicity will define a loose, untargeted niche market. The end result will be an unclear offer — probably too broad — to customers they don’t know.
If you can’t describe what you do and who your customer is in one simple sentence each, keep working on those questions above.
When you know them like you know yourself . . .
A niche market is the group that your prototype ideal customer represents. That’s why it’s critical that we define the prototype customer as well as we possibly can. Because now we’re going to extrapolate up.
You might think it’s a waste of time to prototype the ideal customer in the first place. STOP RIGHT THERE.
What gets lost by skipping that step is the information we acquire by deeply thinking about how one human in our customer group will respond. The loss is detail most folks won’t take time to think through in one step.
Yu can get details without the context of an individual human reference, but skip that step, you are stealing deep knowledge from yourself. If I tell you, if you read it, even when a real customer relates the buying experience, it is not the same as thinking through one customer’s identity yourself.
It’s you, you’re investing in.
It’s survival. If we don’t know our customers as well as ourselves, sooner or later, we will fail. I don’t need a coach to tell me how to do that. Neither do you.
How to Define Your Niche Market
Look at that ideal prototype customer. Find the group that he or she represents. Use the ideal customer to find that group’s needs, wants, and values. You know how to do that as sure as you know what things are everybody things and what things are your best friend’s idiosyncracies.
- What is your ideal customer’s age group? Define an age range narrow enough to keep within a set of tastes and values. Spanning a 10-year age difference might work for undertakers, but probably will not for the needs of college students or new home buyers.
- How is your ideal customer exactly like every member of the group? What needs does the group have in common? What do they all desire? How can you use your previous success — what you’ve already provided — to serve the larger group?
- What is the group’s biggest worry? Is it the same as the ideal customer’s? What other issues does the group have?
- What are the major ways that the group interacts? How do they communicate with each other? What secrets do they keep
- What are the major ways that the group solves problems and finds answers?
- How does this group define a good day? How do they define a bad one? What other groups do they get along with? What groups do they work with that they don’t understand?
- What problem can you take off their desk? How can you save them time, money, or pain?
Picture the group in a meeting room. Have you accounted for everyone there? What part of the group will love your product or service as much as you do?
That’s your niche. That’s the customer you want to serve.
Next: The Four-Part Definition of a Business
–ME “Liz” Strauss
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Related
To follow the entire series: Liz Strauss’ Inside-Out Thinking to Building a Solid Business, see the Successful Series Page.
Don’t leave my computer to go to BlogHer until you post that next installment! This is really great stuff, Liz. These questions open up fascinating vistas of understanding!
Mike
Hey Mike,
Thank you. But you know every one of these ends with another installmant. As it is the next one is not due until Monday. π
We’re going to get there. π
That’s cool. I’m just appreciating your genius so much more with each one of these…
No genius. Just a determination to get the stuff out from behind the curtain. π
Yes Genius!! No callbacks!
I’m telling!!!
Mooooommmmmm!!! Mike said . . . π
Have fun at the conference and remember the picture. π
Hey Liz,
Its been a while since I dropped a comment. π Thanks for the great advice in defining my niche. I need that.
Recently I met up with someone who sells exquisite cakes for almost US$2K, each! He surely has a niche!
Hi Mike!
Thanks for the picture. It lives in my head!!!
Hi Kian Ann!
Great to see you again!
If you liked this one I hope you’ll go back to check out the rest of the series. The underpinning really is strong. π
If you know your customers, like the UK cake seller, you can be quite elite — because you can home in on just what they like. π
Another one of your great analysis! I’d add to your list another point: now that you’ve defined your target group, how are you going to lead it.
I have this belief that knowing your customers implies the responsibility of a leader: you have to listen to their worries and concerns, not only to define them. Then you have to do everything in your power to address them.
To understand your ideal customers you also have to walk a mile in their shoes… And we could go on like this forever.
Hi Mihaela!
Thank you! I hadn’t thought of this analysis, but I sure agree that it is. π
Thanks for the opportunity to explain a little of what’s going on. Maybe I’ll make a quick post about it before I leave for the conference today . . .
While we’re still within the context of defining the business / what we do, ideas weave through in two directions. We need to know the detail of the “who” and the “what” of the business and the “who” and the “what” of the market to be foundationally strong. So it’s define each in the context of the other and gradually increasing levels of understanding by moving from one point of view and back again.
How and where to meet them . . . and as you brilliantly point out gently lead them . . . is coming as we come back around this way on the next pass through. But don’t think I didn’t just note what you said to make sure it’s there. π π π
Hi Liz
π That’s the sentence I was looking for. When I read this post I immediately thought: hedgehog-concept (Jim Collings and Co: Good to Great).
Once you find what you’re good at – i.e. why your ideal customers love you – keep doing it, over and over and over again. Stick with that concept, don’t ever stray away from it – you’ll loose your ideal customers
I love that concept, so ‘simple’ π
Karin H. (Keep It Simple Sweetheart, specially in business)
Hi Karin!
Don’t tell Jeff Brown. He gave me a copy of that book at SOBCon07, and I haven’t yet. It sits on my bedside table, and I’m dying to read it. He keeps telling me that we’re hedgehog that have started moving our flywheels. . . .
Yeah, I love that concept too. I love it because it demonstrates the basic facts.
We all know what business is about. Most of us just haven’t realized that yet. Instead we wander thinking it has to be harder than it is.
Brill! That’s what I thought/felt when I realised it’s about clarity on the hedge-hog concept do read it soon, Liz, it is good to great π and as long as you stick to that, relentlessly, it’s ‘easy’.
Karin H.
Karin,
Because of this series and the kind of thinking I’m doing, I have to consider whether this is the best time to read it . . . there are pros and cons.
Though I’m anxious to know the contents. I’m in the middle of stretching and recording my own process and thinking, I don’t want to get distracted. . . . I can always use their input on the “next pass,” but I only get one chance to do this thinking for the “first time.” When each step builds on the previous and is scaffolded as these are, I’ve got the worry that a great idea from outside the structure will get me to “add on a fabulous airplane hangar to my new house,” so to speak.
I hear you. Thinking ‘out’ is great – know all about that too.
Karin H.
Yeah, Karin,
I haven’t had occasion to do this kind of thinking in a while. I don’t know when I will again. I sure want to take advantage of the chance and challenge to grow and the opportunity to capture it “live.” π
I have been asked that question many times. I look at items for my store based on what I think is tasteful. What I believe my niches would like. Thank you for the article. It helps business people define their niche. Without knowing it, the business will flounder. The next step is connecting with it. Blogging is one way to do it.
Hi Elizabeth!
Knowing the group that you’re buying for really well has to make your buying decisions easier. I agree without a sense of that a business is shooting in the dark and likely to floundeer. Yet sadly, so many don’t take the time to think beyond “small business owners” to describe who they are.
Remedy of my mentor: the term “Small Businesses” is just for economists and statistics, not a label you should wear.
π
Karin H.
Good Morning, Karin!
That’s such a great point. In that framework, no customers in that niche actually exist. π
All these tips are true and awesome. However, having a real passion is also soooo important. If it works, you might spend a few years or more working on this niche. So it must be something you really really enjoy! Nice post! π