Unlocking
The Niche Code
(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
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
http://pages.ebay.com/sellercentral/hotitems.pdf.
Now
that I have some
potential sub-niches to work with, I want to see how much of a market
there is
there.
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
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.
One
relative newcomer as a research tool is Google Trends
(http://www.google.com/trends).
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,
In the
upper-right corner of the page, you can switch
regions (e.g. if you wanted to check the
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.
There
are two places I go online for that:
Magazines.com
- http://www.magazines.com
and
Amazon
–
http://www.amazon.com/exec/obidos/tg/browse/-/599858/
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 time is
money.