What does it mean to niche down?
The Six Percent Entrepreneur
What does it mean to niche down?
June 19, 2021
In this episode, we talk about what niching down actually means.
So you probably heard of this whole concept of knitting down and you probably had a lot of suggestions tell you that you should niche down. But what does that even mean when you are touching down? So there's a right way to niche down, and there's a wrong way to niche down. And we're gonna talk about some of the wrong way. So you can avoid these mistakes and make sure that you are doing it the right way. 

So whenever people say niche down, the most common mistake that I see people make is they are focusing on industry verticals instead of market verticals. And now let's talk about what the differences between the two industry verticals. When people are ditching down into an industry vertical, they're thinking about the product, they're thinking about the service or the process, They're not thinking about the people, and this is where they're going to get into trouble. 

So let's say that there is a person that wants to make basketball's like basketballs is his product, he wants to make new physical basketball. But if he just came out with the regular basketball, I mean, there's already so many established companies Spalding for example, like how is he going to compete with Spalding? Spalding within the basketball community has a brand name and this person might think, you know what, okay, I am going to niche down and they're doing it incorrectly and they'll say instead of focusing on just regular sized basketball's, my niche will be small basketballs and they'll focus on the product, the the process or the industry. 

So this is the wrong way to niche down. If you're just focusing on smaller basketballs, this is not a niche. What a niche is a niche is all about the people. So if you're picking a niche, you are picking the people, and it's important that you're going after a market vertical. And when you're going after a marketing vertical, this is really about the people. So if you're identifying some type of people that you can niche down into, it wouldn't be people who just like small basketballs. It could be, for example, a niche could be trick-shot basketball players. Right? 

So you have all these different basketball players, um that are having different customer journeys. But there's one specific customer journey where these basketball players, all they want to do is trick shots. These are like you're aspiring Harlem Globetrotters, and this is your niche. This is the people, right? The people that are trick-shot basketball players. So this is the right way to pick a niche. One of the second mistakes that I see when people are niche ng down let's assume that they actually did it the right way and they went after a market vertical instead of any industry vertical. And they are going after the people will; the mistake that I see is they will start defining their audience using demographic data instead of psychographic data. 

So demographic data are things like age, gender, location, um etcetera, maybe culture. Just these things that humans like to do to put other people in buckets. And this is demographic data, and a lot of times, this is what usually start-up founders go after. And the thing is, I mean it's not their fault accelerated programs, traditional type of accelerated programs, and business school programs. They do kind of start focusing on the demographics, and they forget to apply this cycle graphics. The cycle graphics is where you make your money. The cycle graphics tell you how people think what their attitudes are, what the world view is, what they value. And within the trick shot basketball community, for example, you might have several demographics, but where you're going to make money and where you're going to actually start getting traction with this community is if you focus on the cycle graphics, so the cycle graphics among trick shot basketball players, it could vary right, There could be several different attitudes or beliefs. 

Some people might believe that they're super confident and they're going to get into the Harlem Globetrotters because they are very confident in the skills and this is their attitude, their coming into this game as a champion. But then there are other people that might not feel as confident. They might be a little hesitant, There might be a little scared. They don't know if they can actually do it. So this is a very different type of attitude, a very different world view. And if you are advertising your trick shot basketballs for each of these people, well, how you advertise will determine whether they will respond to your advertisement or not. And your advertisement should be based on these cycle graphics.

So if you're advertising to someone that shy or that doesn't believe that they can be a Harlem globetrotter, but and they just need that extra little push, that extra little nudge, your advertising materials are going to be a little different, right? And you can see how this ball is going to open up all these abilities and make them less scared of what they're going to actually do. That is a market niche. If you are marketing to people who are the champions, like in the first example that we use, well this is a different type of thing. This is like, okay, you're already a champion and maybe you need to use a champion ball if you are a champion, this is a totally different way of advertising to someone that has that champion mindset and they're coming into doing trick shot basketball as a champion. 

So what really matters is the psychographic data, not the demographic data. When you're thinking about promoting your business and people asking a niche down, make sure you are doing it correctly the way too niche down as you focus on the people, you find a market segment that you can cover. Again, market segment is the people. Then after you do that, then you figure out what all the cycle graphics are for the people that you want to reach out to. This is Robin Copernicus. Boom bam, I'm out. 

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