Blog // Affiliate Tips

Proven Techniques for Finding a Profitable Niche: Part 1

Written by:  Moe Muise, Guest Blogger

This is the first post in a two-part series.

If you’re new to Internet marketing, you’ve probably spent some time staring blankly at your monitor and thinking, “what do I promote?”

In this article I’m going to describe an approach to choosing profitable niches that has allowed me to generate a full-time income online – an approach that is the opposite of what most gurus recommend, but in my opinion is the best way to build a long-term online business.

Why You Should NOT Pick Products to Promote

Focusing on products first is a mistake that many newbie marketers make. While it sounds like a logical approach, it’s a bit like picking out your furniture before building your house. Shouldn’t you build the house and paint the walls before settling on that lime green sofa?

Here are the biggest problems with trying to build a business by picking products – any product can easily become uncompetitive (if “new and improved” competitors come onto the market), untrendy (hello, Atkins diet!) or obsolete (CD player, anyone?).

In contrast to products, the vast majority of niches will never become uncompetitive, untrendy or obsolete. And with so many more people getting into Internet marketing in 2010, the competition to make money online is ratcheting up. That’s why choosing the right niche from the start is so important. By choosing the right niche you’ll not only start making money quicker, but you’ll gain a bit of confidence. This confidence will help you weather the ups and downs that come with running any kind of business.

What Exactly is a Niche?

Put simply, a niche is a distinct segment of a market. In other words, it’s one slice of a large pie.

You can slice a niche out of a larger market in many different ways. A niche market can be comprised of:

  • A demographic group (e.g. women between the ages of 45-55 who have a college degree)
  • A psychographic group (“psychographics” consists of people’s activities, interests, and opinions – e.g. golfers, democrats, backpackers, etc.)
  • Particular needs (e.g. people with back problems)

All of the groups mentioned above are examples niche audiences. Unlike customers who are looking for a particular product, niche audiences have multiple needs, desires, challenges, and pain points. Do you see the opportunity here?

The Ultimate Way to Build a Sustainable Online Business: Focus on a Niche Audience

If you focus on serving the needs of a whole niche audience, you won’t get burned when a product you’re promoting disappears or becomes uncompetitive – you can simply find another product to promote!

Just think about it for a minute: niches have multiple needs, but products don’t.

So if you start your Internet marketing business by focusing on the “new mother” niche (for example), you can attack that market by first making a list of all the needs that new moms have:

  • Baby clothes
  • Parenting ebooks
  • Weight loss programs
  • Time management advice
  • Yoga gear
  • Sleep aids (if you’re a parent of young kids, you understand this one!)
  • Kids’ books and videos
  • Marriage help (the arrival of kids often strains marriages)

And when you build a network of sites that serve a niche audience (which is what I’ve done), you can cross-promote your websites, getting an even bigger bang for your promotional buck. This works even when your sites are in different product categories. Why? Because even though your sites are in different product categories, they’re targeting the range of needs of the same niche audience.

When approaching a niche market, look at it this way: Your job is to serve as a guide for your niche, helping them solve their problems. Kind of like a guide who helps climbers reach the top of a mountain (also known as a “sherpa”).

And what will you get in return for your role as “niche sherpa”? Well, if you do it right, you’ll get a thriving online niche business!

Why Clickbank Affiliates (Not Just Vendors) Need to Do Niche Research

If you plan to make IM your full-time income, you need to treat it like a business by reinvesting your profits, leveraging your time through outsourced staff, and, most importantly, developing an intimate understanding of your audience – their pain points, challenges, needs, and aspirations. In sum, you need to develop an intimate understanding of your audience.

At this point you might be thinking, “I’m an affiliate. I don’t have customers. So why do I need to understand my niche audience?”

The answer is simple. While you might not have direct customers, you do need to attract prospects to your merchant’s sales page. Attracting prospects usually involves writing ads for PPC campaigns, crafting copy for your review pages and writing many other pieces of copy that try to get your prospects’ attention and compel them to click.

So where do you get the information that you can use to write good copy? Like a sculptor, you need something to work with – a piece of clay to mold a masterpiece. Your clay will be the tidbits of information that you collect during your niche audience research!

How to Find Niche Audiences That Will be Profitable for the Long-Term

As I mentioned above, the key to a sustainable online business is to choose a niche audience. But how do you know if a niche audience will continue to have needs, problems and challenges that you can serve and make money from for years?

In truth, all niche audiences have problems, and will continue to have new problems for years to come. But there are audiences that are better than others in terms of profitability.

Below I’ve listed my core criteria for a profitable niche audience, and I follow that up with a description of the audience I focus on in my business, and why it’s a good one.

Core Criteria for a Profitable Niche Audience:

1) Online in large numbers. You can have a tiny audience (1,000 for example) and still have a solid business. But you’ll have to sell higher-priced items to those people. Internet marketing is a numbers game, so the bigger the audience the better.

2) Actively looking for solutions to their problems. Ideally, you want an audience that is actively searching the Internet for a solution to a problem (or more than one problem).

3) Have a strong emotional need for solutions to their problems. When you’re looking for a niche to serve, it’s best to choose one that not only has problems, but that is desperate for solutions to those problems. Now, that might seem like a tall order. It might seem like only some purchases are driven by emotion. But the reality is that emotion plays a much larger role in our lives than we think – including in most of our purchasing decisions.

4) Are willing to spend money to solve their problems. While all niche audiences have challenges in their lives, not all groups are able (or willing) to lay out the bucks to make their problems go away. Here’s an example: The first website I ever started was a directory of government grants for homeowners. For some reason, that site attracted a lot of senior citizens, many of whom were on pensions. The best I could do with that site was monetize it with Adsense – because my audience for that site just wasn’t willing (or able) to spend money on their problems!

5) Are underserved by the market. Believe it or not, there are some niche audiences online that aren’t well-served by marketers. If you think about your own experience searching online, this makes sense. How many times have you gone online to find something and came up empty-handed?

There’s one key reason why marketers ignore some audiences, and it has to do with one criterion that a lot of Internet marketers use to assess a market: the number of pay-per-click ads. Many IM gurus say that you shouldn’t go into a market that has few PPC advertisers, because few ads means there’s no money to be made in that market. That’s foolish logic, in my opinion, and I currently make auto-pilot profits serving a niche audience where I’m often the only advertiser. The audience? Farmers (more on that audience below).

A great example of a niche audience that fills all of the criteria above is overweight, male baby boomers. This is the main audience that I target in my business.

Why is this such a great niche? Let’s put them through my five niche filters:

  • Online in large numbers. Baby boomers are not only a huge market, but are growing in number every year. They’re a significant force online now (although a lot Internet marketers ignore them), and as the Web becomes more easily accessible through more and more outlets – like the iPhone and iPad – even more will pile on.
  • Actively looking for solutions to their problems. The explosion of niche forums has provided an outlet for any group to get together with like-minded people.
  • Have a strong emotional need for solutions to their problems. Baby boomers are like anyone else – they want to look good, and feel good, in front of their family and friends. And as they age, some of their problems grow. Take health, for example. As boomers age they have more health ailments. And few problems are more emotionally-draining than health problems, particularly when a person gets into their 50′s and 60′s.
  • Are willing to spend money to solve their problems. We all know that financial wealth increases as we get older. While many teenagers don’t have two nickels to rub together, baby boomers have been accumulating wealth for decades. And despite the recent economic downturn, there are still millions of boomers who have a substantial nest egg built up from years in the workforce. Need proof that boomers are willing to spend money on their problems? Sales of Viagra were $466 million in 2009!
  • Are underserved by the market. As I mentioned above, a lot of marketers (with the exception of the makers of Viagra) ignore the above-50 group. I think this is because of the obsession with youth we have in Western countries. Everyone is chasing the “fountain of youth,” and being old is considered bad. Well, that’s great news for those of us who focus on those neglected baby boomers.

So what’s an example of a niche that doesn’t fit my criteria? Here’s another example from my own experience: farmers. In my early days online, I did a lot of research in niches with low cost-per-click (CPC) keywords. My rationale was that if I could find an unmet need in a low CPC market, my advertising costs would be minimal, and when I launched a product my profits would be higher.

Eventually my research led me to develop an information product on how to raise a particular kind of farm animal (yes, an info product on raising a farm animal!). To this day, that product brings in a steady $1,000 per month in auto-pilot profits. And because it’s such an obscure niche, I’m able to advertise on the “big three” search engines at a very low CPC.

So if my campaign is making a profit and it’s on auto-pilot, why do I consider it a loser? Because farmers are a relatively small audience and, in my experience, their disposable income is limited. In a nutshell, the “farmer” niche violates two of my core criteria: they are not online in large numbers, and they are not willing (or able) to spend.

If I wanted to scale my per-per-click campaigns for this product, it would be difficult – because there simply aren’t many people searching for a solution each month. A final reason I would not get into this kind of niche again is that there aren’t many affiliate products that I can pitch to farmers after they’ve gotten on my list. What do you sell to men who spend a lot of time with livestock – dating offers?

For Part 2 of this series, click here.

About the Author

Moe Muise, M.A., is a Clickbank vendor and affiliate. He blogs at www.KeywordsBlogger.com. Moe has 10 years experience in niche research, and has been perfecting his online research techniques for the past four years. To download your copy of Moe’s FREE 60-page, step-by-step niche research report, visit his blog at www.KeywordsBlogger.com.

About Molly LaneMolly Lane is ClickBank's Marketing Program Manager. She joined ClickBank in early 2010, and her experience spans multiple industries including consumer products, publishing and IT, with an emphasis on digital marketing. Molly holds an MBA in marketing and entrepreneurship. She is currently on the Marketing team where she leads communication and content development. She loves working with entrepreneurs new to affiliate marketing to share best practices and ClickBank insider tips, while helping up-and-comers stay motivated to become successful in the industry. She currently hosts the ClickBank Insider Radio podcast, writes for and manages the ClickBank Website and Blog, and creates the communications clients receive from ClickBank.

Comments

  1. videostr says:

    Links is indefinitely?
    What is the pr values?

  2. Frederick says:

    Hi Mo,

    I have not read such a detail post in my 1.5 years in IM. NOt only you have outlined step by step to explain the niche , you have also unselfishly explain in detail.

    After reading the entire post, I understand why I could not make money from my blogs

    Thanks a lot

  3. Hung Hong says:

    Great article Moe,
    We are told by many big internet marketer that we need to do a keyword research before other stips but almost us forget about this step.

  4. Choosing a niche is always one of the most difficult things for people starting out. After a while you can quickly recognise them and then the only problem is finding the time to create sites/articles for them all.

  5. trisha says:

    can’t wait to have the problem of finding time to create sites and articles because I recognize niches at a glance!
    thanks for this great post!
    trisha

  6. Terrific post.

    Like Frederick said above, it is very unusual yet highly generous of you to share such a detailed and useful post for those of us just getting into IM or struggling to fit the pieces of the puzzle.

    I look forward to reading more of your articles as you are taking a very rare line of divulging information that Gurus would charge a corpse for.

    Paul.

  7. lorinda says:

    hello moe thanks for the tips on finding a niche your right I value your information and look forward to the other tips you have to offer I have been looking for 8months now and have not done anything yet it is too overwhelming for me but I will stick with it.

  8. This is wonderful information. Straight to the point. Releases the fear. Thanks

  9. Moe,
    Excellent and valuable information. Finding your Niche IS the Hardest part of starting Network Marketing. It about drove me crazy! Took me way longer than I wanted. But in that was a learning curve. A curve we all have to go through. I figure for some, it might be a no brainer, but for someone who is passionate about so many things; pinpointing a passion that you can write and create can be very difficult for some. Your article did give me a new perspective on the subject. Thanks for creating this article and sharing.
    TO OUR MUTUAL SUCCESS!
    Carol Perdue
    http://bit.ly/9tvwb9

  10. Trisno says:

    Hey Moe,

    I like your article.
    Waiting for your next article.

    Warmly,
    Trisno

  11. What an incredibly informative post on choosing niches in which to promote various products. I look forward to your next two posts!

  12. K. Scott Wood says:

    I usually don’t respond to articles like this, but this time I just wanted to say thanks for that information. Very good insight to strategic thinking.
    So… thank ya, thank ya very much!

  13. Ronald Snipes says:

    Great article with insitefull approach. Now I hope to find my next niches a lot easier. Thanks.

  14. I always read the clickbank articles… at least when they email:) High quality and accurate. Focus, Research, Follow through. analyze, monetize, Rinse and Repeat.

  15. Hi Mo, thank you so much for this advice. I’m new to this and this has helped me immencely to understand what to look for. Well done and keep it coming. Thank you so much, Best regards Nick

  16. very well written and explained properly.. these are few things which we don’t give attention to but are important.. thanks for sharing.

  17. I really enjoyed this piece today Moe. Comes back to basics of help people feel better and there is a market for you.

  18. William says:

    Nicely detailed article. I still say, if you spend 80% of your time on researching a particular niche or niches, it is well wirth the time.

  19. Excellent article Moe,
    Too often marketers define the different segments of their audience after they launch a product rather than identifying a profitable segment before they develop or promote products. The technique you outline is also the quickest path to identifying super-profitable, hyper-responsive customers within a specific niche market.

  20. george says:

    Hi Moe,

    What a thorough explanation about pick niche. I have to say your explanation is MUCH better than alot of ebook which sells at $77 or above. I learnt alot. Thank you!

    George

  21. ETRR says:

    Excellent Article which is very true on all points.

    Niche research done correctly is the key to success!

    I get so many emails off my subscribers asking for help on this very subject.. I’ll refer them back to this article.

    Well Done.

  22. I am fairly new to the online business and found your article helpful. There is so much to learn but so many possibilities!

  23. tinanaia says:

    I really like your post. It’s very interesting and informative! I will need to have more of your great ideas regarding money-making online businesses.

  24. Sy Mahmoud says:

    Great info. I like the analogy of the house and the furniture. It is true that you have to have the house or the modle fully colored first before picking out the furniture. Also, to define the nich as a need was a great tip.
    Thank you…

  25. Nosa says:

    Finding a profitable niche is a difficulty topic in IM. Success or failure in internet marketing venture rest on choosing the right niche.

    Over 95% of internet marketers fall at this hurdle. A lot have been written on this subject but nobody has ever explained it as you did in your post.

    The information provided in your post on finding profitable niche is priceless and thank you for making it available to us.

  26. I really appreciate your insights on choosing niches.I never thought of looking at a demographic group instead of focusing on products.This makes a lot more sense than to blindly pick things to promote based on search volume alone.

  27. Polly says:

    I have to agree with some of the comments here. Choosing a niche is so hard sometimes and then deciding whether or not to walk away from it (if it is not profitable) is sometimes even harder. I really enjoyed this article. I needed to read something like this.

  28. Margo says:

    Awesome article. You broke it down into bite size pieces for me. Thanks!

  29. Ken says:

    I really would like to thank you for posting this info, I am one of those people that you were talking about as far as sitting here just looking at the screen, and thinking what am I doing wrong. You have brought back new and exciting ideas again to me, I can’t thank you enough.

  30. I was really surprised that I was able to find exact products for my niche – But I did. However, I have about $124.00 in sales but I can’t get a check because I need 5 credit card transactions. That should be changed to like 3 because so many people use paypal these days.

    Thanks,

    Brian M Connole
    HCG Diet 411 Blog & Forum

  31. Roy says:

    Thanks very much for such a well written article. You have helped so many newbies, especially this one.

  32. tinanaia says:

    Some useful points mentioned. Thank you.

  33. mark says:

    fantastic information, a complete newbie to internet marketing and how to make money online.

    am already tired of all those guru,s trying to sell me B.S. of how to get rich in 2 hours!

    Once again many thanks

  34. This articles provides insights that I have not thought of before. Moe provides a good ebook on his site as well.

    Cheers
    Bill

  35. One of the best, if not the best article I have read on the subject of finding a niche market. It makes sense, and it is focused on the market. Thanks for bringing things into focus for us.

  36. Kim says:

    Great Information , highly appreciate that ! Thanks for sharing Moe !
    God bless you and yours !

  37. Finding a profitable niche has been a nightmare of trial and many errors and when identified it is a struggle to get traffic if is too narrow or too much competition for buying keywords?

    Reading this article really opened my eyes to finding a niche that is profitable rather than one that could be!
    Thank You Moe!

  38. ChrisB says:

    Moe, as a newbie to IM, I’ve been staring at the screen, wondering where to begin. This niche article rocks. Now I can stop staring at my screen,formulate a strategic plan and find a niche to market to!
    Thanks a bunch!
    Chris

  39. Stephen says:

    This article has opened my eyes to so many techniques. I will put them into practice and I will let you know the result soon.

  40. deese says:

    awesome post! i’m new to IM biz and this article just solved what has been going on in my head lately. what niche to focus on, and how to go about it! this is a must read for all Internet marketers out there! thank you very much.

  41. This is a must read article for those that want to go into internet marketing, choosing a product to promote is very difficult especially when one is new to online marketing. My advice to newbies, of which I am one, is that they should look before they leap. Not all products are marketable, but choosing the right product for the right audience is worth working for. Thank you very much for opening my eyes.

  42. Lamont says:

    Moe, thanks for providing another piece of the”IM” puzzle. I am just starting out and your article clarified many things for me. You gave me a foundation from which to proceed.
    I will be following your future articles.

    Thanks again,

    Lamont

  43. Ok, I read this post backward. Part 2 then 1.

    Job 1 for today is posting a survey on my site and asking everyone (phone calls too) what they want in a YLOD repair guide. Thought about this vaguely last month… don’t know what took me so long to test it. Thanks.

  44. Great info, I haven’t used any survey methods yet and am definitely going to do this. It is amazing how many people I have talked to that have poured their heart and souls into a project to only find out a year later nobody wants to buy it. :)

    Sean Mathes

  45. greg says:

    my site is a variety online shopping site.dont know if it was the right choice. im trying hard but it just dosent seem to be working. i read things like this to try and learn somthing. all information is good cheers

  46. Jo says:

    Thanks for providing another piece of the puzzle. By choosing the right product for the right audience, I highly appreciate that info.

  47. Simon says:

    Thanks for this post, its info like this which is vital for a newbie like me. If wasnt for people sharing information guys like me just couldnt expand in this business.

  48. Tai Williams says:

    Thank you, so much for both of the articles. Like a lot who have commented on your articles, I am relatively new to IM and your articles have come at the right time for me, as I am in the middle of researching for a specific product to promote.
    All in all, you have clarified a lot of questions for me in your articles, which are so valuable to me.

    May you continuously be blessed!

  49. Why most of the so called Gurus are not able to disclose or share such valuable information? I think all the new aspirants in affiliate marketing should thank you by heart. Please accept my hearty thanks.
    Regards,

  50. gary says:

    i have my own site and i really havent concentrated on one niche. i have a veriety of things that i promote. i usally come back here to take advantage of the info here, it is very helpful thanks cb by the way to greg from the comment above i really like your site it is very similar to mine but i think your is laid out better

  51. greg says:

    thanks Gary, I spent a bit of time on it (im not that good with computers) I am a bit frustrated, there alot of B/S out there. the site is a bit slow (sales etc)but what do you do !! ps just signed up to yours, easy to use good one.

  52. Glemoh says:

    I agree with you completely about choosing your target niche before choosing the product. But what is best tool helping me to find the good niche ( low competition with high search volume ) reply me please .

  53. Jim says:

    Excellent article. I found your core criteria for a profitable niche audience, along with the example of applying the criteria, especially useful.

  54. Remote says:

    Great criteria to look at when searching for a niche. I can feel a niche market on the tip of my tongue… ah!

  55. Unlockr says:

    Promote what you know and know what you promote – naturally. I think it’s quite obvious when a blog is hawking things that it knows nothing about. I almost even wish they’d admit it, I don’t mind if a blog in my demographic gets an item to review and they start it off with “i really don’t know much about x, so i did some research and found out y”. I will always take that over someone pretending they know.

  56. I am a newbie on the block. Just started clickbank, but I am still unable to find out how much a certain product would pay, like what is the payout for a click, or sale, etc. Where are these stored. A visit to the vendor did not reveal anything about this, some of them do, but some of them don’t.

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