If you are in the right online business then you have the potential to be successful and profitable. But, what are the key criteria for choosing a profitable target market or niche? Here are a few things you should have considered in detail if your online business is to endure....
1. Are you passionate (or could you be) about this niche market?
Successful internet businesses are all about content that is fresh, unique and has some personality. If you are simply a publisher rather than a passionate "expert" you may find it difficult to get credibility or to sustain the quality that is required to make your business grow and prosper. Are you interested in this market? Will you want to continue learning about it and be a thought-leader in this area? Do you want to be part of this market? Do you get fulfilment from this? If so, it is more likely you will drive this business hard, you will be unique and people will want to buy from you because you have quality content. For internet businesses this is called the "expert model" of business success rather than the "publisher model" which can also be profitable but is harder to protect from competition.
2. Does the target market have an "urgent pain" or an "irrational passion"?
Most people buy because they need to solve a problem (or urgent pain) or they want to feel good (as a result of an irrational passion). An example of an irrational passion is a sport like golfing or water polo or other hobbies. Apple is very good at building up the irrational passion of their customers for the latest computing convenience. An example of an urgent pain is a father who has a limited time to entertain his children over the weekend and spend time with them. The local bowling alley leverages this need and very much targets the entertainment and relationship element of playing ten pin bowling. Customers with irrational passions or urgent problems are prepared to pay good money for these needs to be satisfied - for high-quality and immediate solutions.
3. Is the market proactively searching for and are they aware of the solution?
Sometimes people have an "urgent pain" or "irrational passion" but are not actively looking or aware of the solution. If your customers are not actively looking you will have to do a lot more selling and the sales cycles will be longer. You don't want to spend a lot of time teaching your market that they need you. This is an important area to research. The size of your target market who has this need needs to be large enough to make your business profitable and allow for healthy competition.
4. Are you part of your niche market?
Researching your market is a lot easier if you are or have been a member of this market. Do you really know the needs and desires of your target market? Have you been through the pain of looking for a solution to that market's need? You are more credible and will build better rapport with your potential customers if you demonstrate some relevance to their need. This is why great salespeople always start their major presentations with a story about themselves - the before and after tale. If not a member, do you at least have good access and connections with the target market so you can build you credibility quickly? The three most important questions to ask them either directly or via other means:
a) What are your top 2 concerns or problems?
b) How hard has it been to find a solution to these problems?
c) What would it mean to you if you found a solution?
5. Can your niche market afford your solution?
If your customers don't have the money for your solution the likelihood of success is dramatically reduced. Are your customers willing to pay for the information? Be tough on yourself on this one - how do you know they can afford you?