PART 1: Core Market Concepts
And we start with a definition of the niche:“A niche market is the subset of the market on which a specific product is focused. The market niche defines the product features aimed at satisfying specific market needs, as well as the price range, production, product quality and the demographics that is intended to impact. It’s also a small market segment” - the source of this definition is Wikipedia. Let me explain…
We’re going to be focused on one sample of the market. That is … Parents with Children. The reason I’ve picked it up, we’re not going to run out of children at any time soon, right? For as long as we procreate, we’re going to have children. And typically, when it comes to purchasing something for your children, we don’t have really logical drive to do so. It is more of the emotional buy that’s why I picked this niche as an example, are you with me?
Let’s now talk about the niche, specifically – the narrow niche versus a broad niche. The example of a narrow niche would be: parents of infants 0-3 months old, whilst the broad niche would be - parents with children – quite general, right? Now, the more specific we are with our approach, the more effective could we be with our marketing message and the targeting of our market.
Next concept, again, pertaining to the niche: shallow versus deep.
An example of a shallow niche would be child car seats so it’s not that many products you can add to it. And once you sold one or two products, that’s pretty much it. You’ve exhausted your market; whilst a deep niche would be, let’s say - nursing accessories. There is a countless number of SKU’s or Stock Keeping Units that you can sell in that particular niche.
Here’s the question for you. Would you go with broad and shallow niche or do you think that narrow and deep niche is much better choice?
Of course, it is narrow and deep niche so you can expand it and you can add more complimentary products and even branch into a different niche that compliments your initial choice. Also, narrow and deep niche will allow you to market your products better with a very specific, laser-targeted message.
3 M’s of Marketing
Speaking of which, let’s talk about 3 M’s of Marketing, a very important concept.
Here we go. First and foremost, we target the “Market” or “Who” we’re going to market with our offer.
Then the question is “What” does the market want, which product the market is going to buy and would be interested to buy from you of course. That’s the main question.
Next is going to be the “Message”. What message will resonate with the market? And the typical message would be about the problem that market is facing, the solution that you can offer, and the result the social proof so to speak, right? What is the message will resonate with your market?
Now finally, we have “Medium”. How are we going to deliver the message? What’s the lowest cost, most effective way to reach your market? Above is the very important concept to understand.
Top 70% principle
Now – let’s focus on learning the next important concept and understanding of the “Top 70% principle”.
Above diagram is a courtesy of Business Breakthrough by the late great Chet Holmes. I had the privilege of listening to him in 2010, one of the last events he was speaking at in Melbourne, great professional. This is what he’s suggesting. Out of all the people that visit your website, only 3%(or less) of them always will be in “ready to buy now category” - they’re ready to buy (the targeting is correct, your message resonates well with your target audience and they need your product to solve their issue or to satisfy their need).
About 7% of visitors will be open to this category but not quite buying straight away. Another 30%, not talking about it but somewhat interested, if you give them enough chances to research more and gain confidence in you and your products.
The next 30%think that they are not interested but they could be with a little persuasion.
And finally, the last 30% are definitely not interested.
When online sellers are starting their business, starting their website, they only focus on number one, that 3% at the top of this entire pyramid. And rest of the traffic is more or less wasted because there are no means to engage or contact or capture these people, these visitors as your prospective customers - leads.
What we need to do to be successful in your online setting business, and your offline selling business, is to target the whole 70% of them…
Give your prospects something of value, give them the ability to give you contact details so you can nurture the ones which are not ready to buy right now into the sale.
This giveaway or a loss leader could be a report or checklist with easily to digest info that is both useful, hard to get otherwise and is easy to consume; or a loss leader – small product that you can give away and that has a high perceived value – i.e. LED key-ring torch, a fancy USB drive, etc. – of course your giveaway has to make sense in the context of your website and must be in line with your overall online selling theme.
Perfect Customer Funnel
Now, let’s discuss the perfect customer funnel or your market, how you’re going to go about building your own selling funnel.
In the middle of above picture, there is an avatar of your ideal customer that you’re going to target. The more precise you create the description of this avatar, the better it is for the targeting abilities and for your marketing message. Typically, you would have a funnel – the series of marketing messages that are designed to ascend your lead from ‘just curious’ status to ‘ready to buy’ state.
Next – you’d have some form of the [lead] magnet that will attract your prospective customers into that funnel to your website and then you have conversion mechanisms in place to move your leads through the funnel until they reach the next stage of your funnel.
That stage is either a shopping cart to buy the products straightaway. But remember, only 3% of your visitors will be ready to buy. The rest needs reassurance, needs to be nurtured, receive an add-value from you before they make the buying decision. And then as a result of ‘deliver and satisfy’ systems that you put in place, you have a bunch of happy and engaged customers that are buying from you and will be placing more business and refer their friends to buy more products from your online store.
Please take a good note of the “perfect sales funnel” components. Initially, you need to attract the leads or traffic.
Then you need to capture leads, capture lead details, that 67% from previous slide.
Next, you need to have a mechanism of building rapport and nurture that relationship.
Then convert your prospects into sales, and of course, deliver and satisfy the client with your goods quality and maybe one more step over and above the call of duty such as a “thank you” note or a thank you card, or sending a letter or email three months later after the purchase saying, “Hi! I hope that you’re using our product and happy with it.”
Next, we have an upsell and a cross-sell process so that when customer is at the checkout, you can ask them to spend some more money and gain even better discounts or other benefits. I’m sure you’re familiar with this process – this serves only as a recap of your knowledge.
Finally, we want you to get referrals, right? So here are a lot of tools that we normally use for each of the seven steps, eight steps in this process. These steps are covered in more advanced training. Please see more details about it HERE
Now, let’s define your target market. The process of defining you target market starts with who is your target market and why. We start with building this customer avatar, the ideal customer avatar or ideal target market.
If you come to me and you ask, “Well, Dmitri, can you teach me? Can you help me to select the market?” I will say, “Okay. Who are you planning to target? Why are you planning to target them? Who are the competitors that are targeting exactly the same market? What are competitor’s current marketing initiatives? Can you borrow some strategies from your competitors marketing efforts?
Defining your Target Market
If they are established business operators, they spend a lot of time, efforts, resources, and money to design their marketing machine, their funnel. Example of which you’ve seen in a previous slide, so you can dissect that funnel and create even better funnel, shortcutting your funnel creation time.
Can we measure the results? Typically, with the Google analytics nowadays, you can measure the number of visitors, the tokens of engagement and of course –the conversions. You can set up the conversion goals. Google analytics is a gift from heaven if you are online product seller or marketer.
What’s the current sales process of your competitor? What’s their funnel? The best way to find out about it is to buy from your identified top competitors and see how they manage their sales funnel, to see how do they nurture the prospects into paying clients.
And of course, what’s the competitor’s market share? What’s the funnel throughput-how many people they attract and how many people they convert? Believe it or not, there are tools that enable you to see that they are covered in the more advanced training.
You can find out more about it here
Now, let’s talk about the Core Product Concepts, our number 2 agenda for today’s training.
We must identify an Opportunity: A Market that is in need of a Product. The first hey to this is an understanding of the customer goods types.
Consumer Goods Types
Let’s do it really quickly here.
There are convenience goods that are typically inexpensive, frequently purchased, readily available; no effort is required to buy these goods. There are shopping goods. Typically, they are moderately expensive, they’re less frequently purchased, longer use time frame, and some research is required.
And finally, there are specialty goods which are typically unique brand, they have unique set of features, they have long research before your consumers are buying this type of product, and your consumers would be prepared to wait and travel.
So let me ask you this. What consumer goods types would you rather be focusing on?
(A) convenience goods;
(B)shopping goods, or
(C) specialty goods?
Most people who start selling goods online will focus on (A) or (B) types and never thought about it. I suggest you look at starting with (B) and then add (C) types to your offering.
By the way, this is all covered in the Rapid Product Research mind map that you should have downloaded prior to reading this book – if you haven’t done so yet – please click here to download your free RPR mindmap.
Market Positioning and Price Formation
Let’s now spend some time on understanding the importance of Market Positioning and Price Formation for your future product niche, ready?
Above is the diagram how our market is typically segmented in terms of price.
At the bottom, we have generalist. The prices have to be low and cheap. The example of such businesses would be K-Mart, Target, Good Guys, Bunnings, Walmart, Warehouse, Reject Shop, and so on, the commoditized sellers.
Next one is the specialist. They make more money in a specific niche. And here’s a good example of the specialist, pumpkinpatch.biz. The specialist can sell at the higher prices.
The last one is an Expert, Authority, or Celebrity. The price becomes irrelevant here. I’m A Famous Person No One Has Ever Heard of, Except Where Its Important. Here’s a good example in our childhood products, petittresor.com.
Have a look once you finish reading this book so it will give you a good idea how does this compare to pumpkin patch and how does it compare to your Walmart types.
A question for you: Where would you rather be?
Would you rather be at the generalist level, at the specialist level, or at the expert level?
Well, I think the good part to start is, at very least, at the Specialist level or aim to be one or and then do anything in your power to migrate into an expert, authority or celebrity status of your online store.
Yours for finding hot products success,
Creator of RPR Method