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Slide 1: Niche Product Marketing: Embracing Innovation in the Social Era
Slide 2: Foreword Before search engines came in, reaching out to prospective customers was an expensive affair. Fresh products were a relative rarity because few businesses could afford the marketing expenses to fight the incumbents. Small businesses could at best fight the bigger players at the local level. Specialty designer boutiques survived on lower volumes by setting relatively higher margins per sale and catering to exclusive local clientele. Other “I don’t want to be a smaller businesses survived in regions where large players had small fish in the ocean. not yet made their presence felt. I am the ocean!” The coming of Google changed everything. Finally businesses of all sizes could fight alongside each other for consumer attention, based purely on the merit of their products- not capital. Genius overtook corporate bureaucracy almost overnight. All you had to do was build products that consumers needed and they would seek you out. Search engine optimization and adwords became necessary knowledge tools for the online marketer. And the marketing world forgot all about “need arousal”! “I have an 85% bounce rate… my But what about the niche players in unborn SEO says I must write content to categories? How would you optimize your site to match the popular keywords” sell a product through search if nobody even knows the category yet? The newer startups offering niche products in unborn categories are being convinced by the ‘SEO gurus’ to boost hits by broadening their content. The result? A gradual dilution of the niche! Ambitious products are steadily evolving into generics attempting to claim the rabbit’s share of the lion’s market. But now the niche is making a come-back. The era of search is now getting replaced by a more powerful one- an era that brings people and minds together, reshaping marketing thought. The era of niche businesses in niche markets- the era of Social Media!
Slide 3: Table of Contents Foreword ............................................................................................................ 1 Introduction ........................................................................................................ 3 Niche Products and Game Changers ................................................................... 3 The Failure of Search .......................................................................................... 3 The Long Tail of Search .................................................................................... 4 The Relevance Paradox .................................................................................... 4 Reaching Your Customers ................................................................................... 5 Identifying the Key Customers ......................................................................... 5 Empowering with the Right Tools .................................................................... 6 Driving Passion through Personalization .......................................................... 6 Plugging the Holes ........................................................................................... 7 Maximizing the Passion Chain .......................................................................... 7 About the Author ................................................................................................ 8 Copyright © GoJeeno 2010 | Niche Product Marketing | http://www.gojeeno.com
Slide 4: Introduction The greatest advantage of game changing startups often becomes their first hurdle- they are NOT mainstream. The advantages of having a unique product, monopolizing a niche market are many. But that comes at a price- nobody is looking for you! Niche Products and Game Changers An increasing number of startups are providing products and services targeting a highly focused customer niche. To quote Guy Kawasaki, the art of innovation lies in developing unique products that provide a high value to consumers. A decade ago nobody was actively seeking a touch-only mobile phone with just one button. So how do these niche products and services break the initial inertia? The Failure of Search Search engine marketing has been a blessing for small and medium business over the last decade. Content and quality have allowed SMBs to fight and steal market share from larger businesses. The success of search Nobody wakes up in the morning wanting to buy a robot engine marketing is limited made from household appliances. by keyword focus and the number of search queries. By loosening the focus of keywords, you could get displayed on a larger number of queries. However, this would be less meaningful to a consumer, and therefore result in lower conversion rates. A highly focused keyword set implies a lower reach, but higher conversion rates. Search engine marketing is therefore invaluable for low capital mainstream players. With a huge market size, even a negligible share of the total market could make ends meet. Unfortunately, this mindset breaks down with niche product offerings due to two major reasons: Copyright © GoJeeno 2010 | Niche Product Marketing | http://www.gojeeno.com
Slide 5: The Long Tail of Search The long tail effect refers to the property that a disproportionally higher majority of something occur at a large number of low frequency ‘events’. Search volumes are intrinsically characterized by the long tail, resulting in two observations of interest to the niche business owner. First, while the search volume for niche products as a whole is greater than generic brands, the demand for each particular niche is low. Second, since a consumer searching within a particular niche is more focused in that domain, advertising across niches results in poor clicks and conversions. In a final attempt to win more hits and audience, the business owner is forced to follow the advice of SEO gurus- target high frequency keywords and effectively dilute the essence of the product. To make matters worse, the actual customer base that was initially targeted gets alienated and the super unique product idea becomes a ‘me-too’ player in the congested market place. The Relevance Paradox The relevance paradox refers to the fact that people only seek information that they perceive as relevant to them. With access to instant information, thanks to today’s search engines, consumers interested in a particular product- say an IPhone application would go ahead and search for that. Again, search works great for products and services that easily fall into an existing domain or category. Niche products and category breakers are not as lucky. Since such a category did not even exist “Your customers won’t look for you until they before the unique product was born, know you exist… But if they knew it, why consumers who are unaware of the would they look for you in the first place?!” product would not even feel the need to seek it out. What’s even more paradoxical is the fact that if they knew such a product existed they would have probably been interested enough to seek it out! So how does the niche business owner reach the target audience? Copyright © GoJeeno 2010 | Niche Product Marketing | http://www.gojeeno.com
Slide 6: Reaching Your Customers Niche businesses have one major advantage over others- their customers. Imagine the first few customers buying robotic toys made from household junk. They are characterized by their passion towards the product. In fact, these customers are almost as passionate as the business owners themselves. A passionate customer is the greatest asset a business can have. First, as human beings, we all feel the need to ‘educate’ others about the things we are passionate about. Passionate customers actively voice their opinions about you in a related discussion, advising prospects and recommending your product to friends. Traits of the Passionate Customer -lends voice to your problems and concerns -spreads positive word of mouth about you - breaks the paradox by talking to friends -energizes your prospects with the ‘Need’ Second, a passionate person is able to bring people around her into a similar level of excitement and passion. By nurturing a single passionate customer, a business can create a selfpropelling chain of excited prospects that actively spread word about the product. Finally, passion attracts passion. That is the reason why geeks stick with geeks, and most of our social circle likes to discuss the same games and TV shows as us. Niche products, consequently, have or target a set of consumers who not only have the desire to talk and the capacity to make others excited about their product, but also have the ability to do so through strong social connections with similar people. So how can a business capitalize on this passion to drive growth? How can businesses create the “Passion Chain Reaction”? The most logical solution is- by conducting a methodical Passion Audit comprising of three stages. Identifying the Key Customers The first step in creating a passion chain reaction is identifying the key customers. The first trait is passion. Businesses can readily identify this attribute in a customer from her activities within support forums and the tendency to actively seek and provide information about the product in social media. Copyright © GoJeeno 2010 | Niche Product Marketing | http://www.gojeeno.com
Slide 7: “The best customer need not necessarily be the one surrounded by a million friendsthey merely have to be surrounded by a handful of similar people with similar interests.” However, the key customer is not just passionate. She is surrounded by people who engage in discussions surrounding similar product categories. So once the business identifies the right customers, how does it go about initiating the passion chain reaction? Empowering with the Right Tools Social media is truly a heaven for the niche business provider. The right customer is already eager to spread the word about the product. All the business has to do is empower the customer with the capabilities to do so. At the least, businesses can add a Twitter and/or Facebook button at the ecommerce store or website for customers to share product knowledge with friends. Businesses that can afford it may even educate their customers and get them active on social media by aggregating and providing customers with the vast amount of information on the subject available online. How to create a Passion Chain Reaction -Identify Key Customers -Empower them with the tools to talk -Drive Passion through Personalization -Plug Holes and Sinks -Maximize the Flow It would be ingenious for businesses to allow customers to view and add opinions for each product. Businesses could create default Twitter handles (like @robonerdreviews) that automatically aggregate and broadcast these customer opinions. Driving Passion through Personalization Since consumers of niche products have a strong similarity in their preference, it makes sense to foster social media relationships between them. Customers and prospects would love connecting to like-minded people. By creating a social network of people who like the product, the business eventually creates a sense of brand identity among the network members. “Internalize your customers. Engage them. Don’t just One of the ways to enable such inter-customer acquire customersrelationships is by creating a social shopping acquire Patrons!” environment. In such an environment, prospects can see what their friends think about the product. Copyright © GoJeeno 2010 | Niche Product Marketing | http://www.gojeeno.com
Slide 8: Additionally, customers gain visibility into others who they might want to initiate a friendship with. Letting customers ‘in’ on your internal information makes them feel like they are a part of your team. Post pictures of your Halloween night and ask customers to reply. Host a video or a photo contest and display your customer’s pictures on your blogs. By creating such an atmosphere, niche product consumers become one with the business and spread positive word of mouth more actively. Plugging the Holes Every system tends to move towards a system of disorder. Loyal customers sometimes form closed groups between themselves, or word of mouth just does not seem to filter down to the prospective customers. Identifying the ‘information leaks’ and holes in the customer social network is imperative. Once identified and validated, the business manager needs to identify the prospect’s interest areas and craft out strategic content to impress the prospect. Maximizing the Passion Chain The final step in driving the passion chain reaction is maximization. Without periodic watering, even the most passionate customers are bound to eventually lose interest and move elsewhere. However, with the limited resources available, small businesses cannot make sure that all customers remain permanently excited. It is therefore crucial to undertake periodic passion audits and maximize the overall passion levels. Nurtured customers become evangelists. An evangelist stimulates the passion chain reaction. The chain reaction is the tipper your business needs to explode into exponential growth. Copyright © GoJeeno 2010 | Niche Product Marketing | http://www.gojeeno.com
Slide 9: About the Author Vikram Bhaskaran is the co-founder and Director of Products at GoJeeno. He holds an undergraduate degree in engineering and a Masters in Marketing, with a specialization in marketing modeling and social network analytics. Vikram is the winner of numerous awards and honors, including the prestigious Google & WPP Marketing Rewards Award in the year 2010. He is also a Certified Expert in Customer and Brand Management. Before starting GoJeeno, Vikram worked as an engineer, a marketer, analyst, researcher and consultant in various organizations. You can get in touch with Vikram through his Linkedin Profile: http://linkedin.com/in/markalive or through Twitter: @vkrm20 This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/bync-nd/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. Copyright © GoJeeno 2010 | Niche Product Marketing | http://www.gojeeno.com