First and foremost, niche marketing (also known as micromarketing) is focusing your efforts not on a general audience but instead on a specific and well defined group of the population. In layman’s terms a niche market is created by a marketing team that identifies the needs, wants and requirements of a group of people. These requirements are important to identify because they may be addressed poorly or not addressed at all by your competitors.
Niche marketing is a fundamental strategy every auto shop (both large and small) should keep in mind because it allows you to stay on top of a small audience learning exactly what it is they need and might need in the near future whilst step by step expanding your reach. Here are 5 tips to defining a niche market that every auto repair owner should know.
1.Define the Target Market as Clearly as you can
Niche marketing above all else involves a great deal of targeting a group of people within the automotive industry. Factors such as demographics and specific needs are taken into account when defining a market so it is important (if you don’t have time to do this yourself) to bestow the job of targeting to someone whom you trust and knows the industry as well as you do. One example of niche marketing in the auto repair field would be vehicle performance and vehicle type. For example, a hot rod shop, or a bmw shop. There are plenty of shops specializing in those cars because of the type of cars that exist in certain areas in the country.
2.Research the size of your Market
Determining the size of a niche market is not as hard as it sounds but it does involve a little research. You can begin by finding out the number of potential customers in your city which is done by doing a general demographic search online. The result will give you the number of people that live and work in the general area along with their respective genders and income levels. After you have this you can calculate the number of vehicles in your area.
3.Estimate Potential Market Share
For those unaware, market share is the percentage of total sales volume in a specific market that is captured by a company, product and brand. In this case, estimating potential market share can tell you how much money you may be able to make within that niche market. To calculate market share you must perform the following steps:
Calculate the total revenue of your company (or total sales)
Calculate the total amount of money that the entire market is making.
Divide your company’s total sales by the total sales in the industry.Learn more here
After you have the number of possible vehicles to service in your area the next step would be to determine the service requirements for these vehicles over the course of a year. This is a key step in defining estimated costs as well as profit for that year.
5.Evaluate and Redefine if Necessary
Upon arriving at a figure for the year if the results on paper aren’t what you expected don’t worry, this is all just a rough estimate but just to be sure you can always define a broader target audience and reevaluate the figures. This happens when a target audience is perhaps too narrowed down.
In the auto repair industry, defining a niche market is an important task that every shop owner should do. It is important on many levels but you must always remember that defining the size of the market and potential market share, needs to be defined clearly as well as realistically. If you underestimate the potential market share the results can be better than you thought but overestimating potential market share can lead to serious problems down the road.
If you wish to learn more about market share, niche clients and or marketing for your auto repair shop, contact JMC Automotive Equipment today.
What niche market have you been targeting?