Don’t Miss Part I of this Topic

If you’re wondering what a niche market is, the benefits of defining one, and why you probably don’t have one, refer to Part I of this topic.  The purpose of this post is to discuss a bit more about a 5 step process you can use to define your niche.

Step 1: Identify Niches in Your Market Area

There are tons of niches in the real estate market.  Of course, not all niches are present in all markets.  So, you’ll need to think about the real estate market in your area, and the people who buy and sell there.  Consider the following list of potential market niches:

1. Second home/vacation home
2. Relocation
3. Downsizing
4. Lake/River/Oceanview property
5. Condos
6. Lofts
7. Active Adult/Seniors
8. First time homebuyers
9. Gated communities
10. Golf communities
11. Military
12. Ranch/Farm/Land/Equestrian
13. Green homes
14. Downtown living
15. Shared interests – the list is long, including things like dog lovers, motorcyclists, boaters, horse lovers, and the list goes on
16. Geographic

This is just a partial list of potential niches.  You may have a specific niche based on where you live, your skills and what is around you.

Keep in mind that you can’t just pick one – you must have an affinity for the niche you target.  So, for example, it would be difficult if not impossible to target military families if you’ve never been in the military.  If you live in a condo downtown, you’ll be much less believable as a farm expert.  I think you get the idea.

The geographic niche is one that is often misunderstood.    If you live in a metro area comprised of 10 counties, selling in the metro area is not a geographic niche.  Just because you can drive all over the metro area, that doesn’t mean you’re an expert in all those markets. Unless you live in a sparsely populated area, even picking a county as your geographic niche is often non-productive.

For one thing, prospects probably won’t believe that you can possibly be intimately familiar with all the neighborhoods in a county.  For another thing, they aren’t going to want to work with an agent who is a half hour or more away.  And, you’re dooming yourself to very poor time management, additional expense and brain freezes as you shuttle from one end of the county to another.

A good geographic niche is very specific.  It could be one large development with enough homes and transactions to support your business.  It could be a single suburb of a large city.  However you define it, just make sure it’s a reasonable niche.

Try it.  Brainstorm a list of every niche you can think of, even if it’s not for you.  Brainstorming will help you open your mind to the possibilities.  Now, review those niches and identify the one(s) that you would like to explore.

 Step 2: Determine if Your Selected Niche(s) Can Let Your Business Prosper

There must, of course, be enough activity in a particular area to let you make a living if you got some percentage of the transactions in that niche each year.  For this and Step 3, you need to do a bit of research.  The best source to give you the information you need is your MLS system.

Get a year’s worth of information about your niche(s).  How many transactions were there?  Enough to support you?  Don’t assume you’ll get all the transactions if you start marketing to this niche, assume a reasonable percentage.

At the same  time, gather the information for Step 3.

Step 3:  Determine if Your Proposed Niche(s) are Already “Taken”

While you’re getting information from the MLS, take a look at the agents who were involved in the transactions in your proposed niche.  Does one person dominate?  If so, you’ll need to do some research on that person.  If they are very deeply entrenched in the niche, the odds of your stealing lots of business from them is very low.

Step 4:  Determine if You Can Provide Services for Your Target Niche

You need to put yourself in the shoes of the people in your target market.  Think about the services those people would need.  A previous example applies here, too.  If you live in a condo downtown, and you want to market farms and land, how could you do that?

Do you already know how to evaluate the value of a farm?  Do you know all the ins and outs of wells and septic tanks, if those are prevalent in the farm market?   This example is very obvious, of course, but if providing the services required isn’t playing to your strengths, pick another niche.

Step 5:  Determine If You Can Market to the Niche

This may sound like a silly undertaking, but there are times when you might be perfect for a niche, but you just can’t market to it.  Here are a couple examples:

• If you really think your niche is an entire county, how would you reach that market?  If you plan to use a website to generate leads, you’re going to have a difficult time of it.  As of this writing, the number of real estate searches done by county are very low.  You could be ranked #1 on Google for a county term, but it will be unlikely to generate enough leads to pay the mortgage.
• Let’s say you are a golf lover.  Could that be your niche?  Do you live in a golf community? Have you participated on the association board?  Do you play in local tournaments?  Do you know a lot of golf lovers who could be a potential referral source to kick off your new niche marketing?  If you answered no to all of those questions, you’d have to ask yourself how you’re going to effectively pass yourself off as a golf lover and golf community expert.

The moral of this story?  There are a few things I hope you take away:

• There are benefits to niche marketing.
• Choosing a niche takes some time and effort.
• You don’t have to be afraid of choosing to do niche marketing if you do the homework and can prove to yourself that a niche could be profitable for you.

As always, if you have questions, experiences with niche marketing to share and so forth,  please leave a comment!

I’ve written about real estate marketing niches in the past, but the question of niche marketing came up again recently, and I thought it was time for an update.  Here is some basic information on the topic:

• Definition:  A market niche is a distinct segment of a market.
• Benefits of niche marketing:
• You reduce the number of people with whom you compete.
• Prospects are less likely to focus on commission rates.
• You can focus your marketing budget and services to a specific group of people.
• You can become an expert in a specific niche, further differentiating yourself in the market.
• You can take advantage of your strengths.
• You can work in an area you know and love.

Why People Don’t Identify Real Estate Marketing Niches

Looking at the benefits of niche marketing, and the information on this post on real estate niche marketing, you’d think every real estate professional would immediately define their own niche.

But, that doesn’t happen.  And, the biggest reason that people avoid defining a niche is fear.  People are afraid that if they narrow the focus of their marketing efforts, they will be walking away from lots of good business.  Or, they’re afraid that no one outside of their niche will ever work with them.

Another thing that makes people avoid defining a niche is that they never analyze their market and their strengths to come to the realization that they could easily define a niche and it would help them meet their goals, not hinder them.

Finally, lots of people are proud of their generalist skills and don’t see how narrowing their marketing focus would  help them.  For example, if your people skills and knowledge would allow you to work with anyone on any type of a real estate transaction, you can fall into to the trap of thinking that remaining a generalist is going to be the path to fame and fortune.

The Simple Way to Define a Real Estate Marketing Niche

Let’s say that you are at least curious about how a marketing niche could help you improve your business.   There are far-reaching processes you can use to define a niche, and those undertakings are worthwhile and do get you right where you want to go.

However, if you want to try a quick and dirty methodology, here it is.  Ask yourself:

1. Are there groups of buyers and sellers in your market that share the same interests or needs?
2. Does that group do enough buying and selling activity to let your business prosper?
3. Are most of the transactions for that group handled by a specific real estate agent or agents?
4. What services do I (or could I) provide to meet that group’s specific needs?
5. How can I effectively market to that group?

Any ideas on how to answer those five questions?  Anyone have any insight from their own experience of marketing to a niche?  Any questions?  Leave a comment.

And, stay tuned for Part II – a brief discussion of how to go about answering those questions!