(How to Research the Moneymaking Capabilities of a Niche)
A Step-by-step Approach to
Finding the Best Niches in which to Market a Product or Service
Unlocking The Niche
Code:
When
selling a product, a lot of people make the mistake of developing their product
first, and then trying to find a market for it. Of course, the process should be
reversed.
Find a market first that spends money, then find out what they want and give it
to them.
It is
certainly easier said than done, but there are a lot of places online where you
can do your market research for free. They've done most of the work for you
already. You just need to know where to go and what to do to connect all the
dots.
Let me show you the process I go through when I'm trying to brainstorm for
ideas.
For
starters, I'm always aware of trends and current events in the real world. I
read several newspapers each day, many magazines, both general and
niche-specific, I watch the news, I listen to the radio. Occasionally something
that I hear or read will stick with me. I may record my thoughts on my portable
voice recorder; jot down some notes, whatever happens to be convenient for me.
Sometimes I'll call my office voice mail and leave myself a message.
But
at some point I'll have several broad ideas to research. I want to look deeper.
And I want to make sure there is a good market for them before I even think
about creating a product.
So
I'll begin completing the following steps:
Google Zeitgeist-
http://www.google.com/press/zeitgeist.html
To
begin with, I check out the hottest search trends at Google Zeitgeist. If I am
targeting the US market, I’ll click on “U.S. Zeitgeist,” otherwise I’ll look at
“Zeitgeist Around the World.” At this point I am just looking for ideas.
If I
see that a particular topic is hot, I’ll make a note of it and look at more
targeted sub-niches later on at more specialized sites (which I’ll show you
shortly).
Lycos
Top 50 - http://50.lycos.com
The
Lycos Top 50 is another site, like Google Zeitgeist, where I will review the
latest trends and look for hot topics to explore further. I will also look at
Yahoo! Buzz for ideas as well (see below).
Yahoo! Buzz - http://buzz.yahoo.com
eBay
Pulse – http://pulse.ebay.com
The
eBay Pulse site is a great place to start looking at sub-niches. What I will do
is select the category first (using the topics I’ve gathered from looking at the
previous sites), then look for profitable sub-niches by then selecting a
sub-category.
The
best chance for success is if I am as specific as possible with my niche
selection. In the example below, I don’t want to sell to the “crafts” niche.
I
want to sell to grandmothers who enjoy giving their latch rug hooking gifts to
their families and friends. Whatever. You get the idea.
Also,
I’ll always check the largest stores as well to see what they’re selling. There
has to be a reason they are the largest stores. They must be doing something
right.
eBay
also puts out a PDF report of their hottest categories each month, available at
Now that I have some potential sub-niches to work with, I want to see how much
of a market there is.
Just
because a sub-niche is popular doesn’t mean people spend money on it.
Amazon - http://www.amazon.com
Amazon is a great place to see what currently exists for any given sub-niche.
Chances are, the more books there are written on that subject, the more that
market spends on those topics.
For
example:
First
I specify “Books” to search. Then I enter my niche, in this case “crafts.”
Uh
oh. There are WAY too many books returned. This niche is not targeted enough. It
is too “mainstream.”
Much
better! There are possibilities here.
We
now suspect the following:
1)This sub-niche may be targeted enough.
2)This sub-niche may spend money.
Time to scope it out a little further.
We
want to be as certain as we possibly can that our niche is focused enough but
big enough, and that the people in that niche spend money.
So
next I head over to the Overture Resource Center
(http://searchmarketing.yahoo.com/rc/srch) and click on the “Keyword Selector
Tool.”
Then
I enter my niche and see how many times that keyword and all related keywords
were searched in the previous month.
I
like to see at least 10,000 searches for all keywords combined, but not more
than, say, 50,000 or so (although I do have profitable niches that have only a
few thousand searches at Overture, but they are the exception rather than the
rule).
For
“latch rug”, you can see that this market is just too small.
Remember that Overture searches are for Yahoo and their partner sites, so to
measure the number of searches on Google, I usually estimate between 5 and 10
times this number to come up with Google’s searches. Also, depending on the
market, I've sometimes found Overture’s figures somewhat inflated, so bear in
mind that the number of actual searches might be lower.
If
I’m happy with the number of searches for this potential niche, I next want to
see how much pay per clicks (PPC) are going to cost me on Google Adwords.
For
that I use Overture’s “View Bids Tool.”
I
want to make sure I won’t have to pay more than a dollar or two per click on
average, but of course what you can profitably pay for PPC will depend on your
product’s selling price and how many you can sell.
Again, at this point I’m just trying to get a snapshot or pulse of this market.
Plus,
the bid process also tells you a little about the moneymaking opportunities of a
market. As a loose rule, if the max bid results are between 30 cents and $2.00,
it’s a good indicator that people are making money in this market. I call this
my “magic window.”
Over
$2.00 means that the competition is too fierce for my tastes, but depending on
your market and eventual product selling price and demand, it may make sense for
you.
To
check on the companies that are bidding on my keywords in Google Adwords, I use
http://www.googspy.com.
There’s lots of useful information here. You can see that the news volume is
synced with the search volume, and several notable news articles are displayed,
along with where they occurred on the timeline.
In
the lower section, you can see which countries, cities, and languages made the
most searches. Be aware that the indicators are normalized, meaning they are
adjusted for that region’s population. For example, South Africa has about 44
million people, compared with the U.S.’s 295 million. So the U.S. may have
performed more actual searches, but after the adjustment is made, South Africa
comes on top for this search term, which is “fly fishing.”
In
the upper-right corner of the page, you can switch regions (e.g. if you wanted
to check the U.S. only), and you can change the time period.
For
example, notice below how I changed the time period to a single month. See any
cyclic trends there?
You
may have noticed that searches for this topic tend to spike every Friday, going
into the weekend, and then fall again during the week.
This
information may be useful if you are going to advertise with Google Adwords, and
you’re launching a firesale or other limited time campaign, because you’ll want
to schedule your campaign around one or more of those spikes.
Some
markets have different patterns, so it’s useful to be aware of them prior to
launch.
Another great use for Google Trends is if you are trying to decide between two
different niches. If you enter your search terms and separate two or more with a
comma, Google will compare them for you.
Very
useful.
The
work is already done for you. You just need to put it to good use. As you can
see above, piano is too broad a niche. It has a high amount of searches, but the
bids for PPC traffic is too low. As a result, I would suspect that people are
generally not making a lot of money with that search term.
Remember, high
volume + low PPC bids = low click through rates and even lower conversions.
Fly
fishing, on the other hand, does have PPC bids between 30 cents and $2.00, so
money is likely being made there. However, the search term itself is too low.
Unless you have other keywords for that niche to add additional traffic, I would
steer clear from there as well.
There
are several other sites I use as well to get niche ideas, and especially to
narrow the niche and discover potential information the market wants:
Nichebot - http://www.nichebot.com
Shopping.com Top Searches –
http://www2.shopping.com/top_searches
AOL
Hot Searches - http://hot.aol.com/hot/hot
Google Groups - http://groups.google.com
Craig's List - http://www.craigslist.com
Delicious Popular - http://del.icio.us/popular
Dig -
http://www.digg.com
Google Catalogs - http://catalogs.google.com
Google Suggest –
http://www.google.com/webhp?complete=1&hl=en
Technorati - http://www.technorati.com
Also,
I'll do several targeted searches in both Google and Yahoo (for example, on the
subject of "hobbies").
Finally, I’ll see what existing digital products are being sold in my target
niche at the Clickbank Marketplace
(http://marketplace.clickbank.net).
HINT: If you
want to see how your competitor’s sale pages have evolved over time, the Wayback
Machine is a great place to do so (http://www.archive.org).
And
of course I will always Google my keywords and check out the competition in the
Adwords ads. In this case I pay special attention to the ads that sell
information products (or services like mine if I’m selling a service).
Some
of the ads will be irrelevant as far as competition goes.
Ok,
the next thing I'll do is check how many magazines there are on the subject of
my chosen niche.
At
each site, I search by category to find the magazines in my niche.
Obviously the more the better, up to a point.
For
example, golf has a lot of magazines, but it's not a good niche by itself. It
needs to be more targeted. But in that case I can always get more targeted
sub-niche ideas within that topic by looking at the types of magazines for that
topic.
Now,
as good as these sites are for finding magazines, I'm still going to need to go
to a bookstore that carries lots of magazines and browse through the ones in my
niche?
Why?
Because I want to see what kinds of ads are in them.
I
need to know who else is selling what, and it will also tell me whether the
people in this niche spend money. And the ads will not only tell me that, but
they will also tell me what the people in this niche spend their money ON. And
if I want to know which ads keep appearing (because then I'll know they are
making money), I would want to pick up several issues in a row of the same
magazine, if possible.
Ok.
By now I should have a pretty good niche market to test. And by knowing what
kinds of informational products are selling, I can start to formulate the
content I’m going to use for my test.
This is where I go to niche-specific sites.
So
I’ll set up a mini-course on my autoresponder with my content.
I
like mini-courses better than just a free report to get them to opt in, because
the free report is a one shot deal. I want to “train” them to be on the lookout
for my emails, to anticipate them and open them. That way when (or if) my offer
shows up in their inbox, it may have only been a day or two since they last
heard from me, not weeks or months ago when they got their free report (in that
case they’ll likely forget they signed up for your list and promptly delete your
offer, unsubscribe, or report it as spam).
If I
have a free report I want to use, I’ll simply break it up for my mini-course.
But as this is a new niche, it’s unlikely I’ll have a report yet.
I’ll
then set up some very targeted PPC ads using Adwords.
I
want to match each ad group to the keywords as closely as possible.
Then
I turn it all on and start building my list.
So
where’s the product, you ask?
Well,
at this point, I don’t know for certain how much traffic I’ll get or whether
they’ll opt in or not, never mind whether they will purchase my product. I have
an idea, due to my research.
But
now we want hard numbers to back it all up before I invest any more of my time
and money. Hence, the testing.
There
are two things I primarily watch as the list begins to build:
1)How much traffic I am getting from PPC.
I want to compare what I’m getting with my previous Overture estimates (adjusted
for Google). At this point I want real numbers, not estimates.
2)My opt in
percentage. If
it’s too low, either my squeeze page copy needs to be tweaked, or, if I’ve done
my homework with my copy, perhaps this market is not made up of enough buyers.
Listen, if they’re not going to opt in, they’re certainly not going to buy.
Now
if my traffic and opt ins are both good, now is the time to start thinking about
a product, which ideally should be along the same lines as the content they
signed up for in the first place.
Sometimes I will even email my list at this point and simply ask them what they
want, or try to determine their wants and needs from carefully constructed
survey questions. Just remember that people often say one thing and do another.
It’s only 100% accurate when they vote with their wallets.
An
even better way to test your list’s desire for a particular piece of information
is to announce a free teleseminar to them, then see how many show up. If a large
percentage of your list calls in, it’s a good bet they’re interested in your
call topic.
HINT:
Teleseminars also make GREAT products or bonuses themselves if you record them
and sell them after the fact. In fact, sometimes I’ll announce a paid
teleseminar rather than a free one.
Why?
Because then I know people will pay money for that information, an even better
test indicator. They are voting with their wallets. Plus I can always sell the
call recording after the fact as well.
Another technique to test whether this niche is built up of buyers or
tire-kickers and freebie seekers is to promote an affiliate product within that
niche.
If
the product content is similar in nature to what you want to create as your
product, it’s a good indication that you have the potential to get a similar
percentage to buy yours. Just make sure it’s either a non-competing product or a
front-end sale. If it’s a front-end sale, you’ll develop a mid or back-end
product.
Bear
in mind that in the case of the latter, you’ll get less of a percentage to buy (compared
with the percentage who bought your affiliate front-end product), but you
may make up the difference and then some with a higher ticket item. It’s a risk,
but it should be a calculated one.
The beautiful thing is, once I confirm a niche will be profitable, with this
approach I already have a pre-built list that keeps getting bigger by the time I
launch the product.
So
there you have it.
There
are plenty of sites I use for research in addition to the ones above, but they
are usually niche specific. These sites will help you to research practically
any niche market effectively. Once you have this process down, you’ll be able to
do this very quickly.
After
all timeis money.
You can receive valuable insights, techniques and information if you sign up
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