Dixon Jones, managing director of Receptional.com, the internet marketing consultancy points the way ahead for internet niche marketing.
The internet has been one huge learning curve and no-body could have foreseen the enormous impact it would have on all our lives in just such a short time. It's not surprising therefore that we've not been taking full advantage of its unique abilities to address niche markets.
True, some people have seen the potential and exploited it successfully to build an unstoppable empire - take www.friendsreunited.co.uk for instance. For others like boo.com the dream of world domination came to an abrupt stop. With the bursting of the dot com bubble, we have witnessed only too clearly that expensive entrepreneurial innovations are not made without enormous risk of failure.
It has been a numbers game since the web came to the attention of the commercial world. The marketing industry rejoiced in the magnitude of potential customer numbers and carried on doing what it's always done - but on a much grander scale - blindly putting in vast amounts of investment capital but without examining closely the return on investment. Indeed in some business models there was no foreseeable return on investment, merely a vision that somehow, somewhere, by virtue of some nebulous magic formula, all those thousands of web site visitors would be converted into profit.
It should have been a matter of common sense. Unless a business has something tangible to sell - and I don't just mean email addresses - there is no revenue to be had. Conversely, if there is something worth buying, then the internet provides the most wonderful real-time portal to a world full of potential customers. In particular it brings the opportunity to address specific customers in niche markets.
Now that the internet has now come of age, mistakes have been made and lessons learnt, the public and investment capitalists alike have some measure of what is possible and what is not, what is likely and what is unlikely to work. Nevertheless there still exist many new and mainly unexplored opportunities for creative and innovative thinking and most of these revolve around the issues of brands and niche markets.
The internet is an ideal place to plan, launch and manage niche brand marketing. What is more, done well, this can be achieved successfully without recourse to expensive off-line campaigns. It is likely that within the next two or three years we shall see a very fast and successful growth of niche marketing activity using all the opportunities that the internet has to offer.
Let's take the example of a shoe manufacturer and examine these opportunities more closely. He makes shoes of all sizes, all types, all colours and for all occasions. His marketing opportunities before the world wide web depended on costly brochures, advertisements, location and reputation. Where he addressed the requirements of a niche market the investment in the necessary marketing probably didn't bring significant returns, so instead he concentrated the majority of his production on standard shoe sizes and colours that would meet the requirements of the largest possible customer base. If you have enormous feet you are only too aware of this fact.
But now our shoemaker has a web site and the potential to address the world. What is more he can segment his products into an infinite number of niche markets: larger shoe sizes, smaller shoe sizes, metallic shoes, high-heeled shoes, steel toe-capped shoes, bespoke colours, shoes for walking, shoes for running, and so on. Let's not forget also that alongside this consumer-focussed business he will also probably be supplying retailers so he can add to this list high street fashion shops, workwear wholesalers, etc. Without any more investment than the services of a good web site designer - a webmaster - our shoemaker can build a family of niche market pages which speak directly to his customers about their specific requirements. He can appear as the specialist, catering and caring for every demand in the footwear business.
But no orders will come rolling in if no-one ever sees the site. This is something so basic but very often completely overlooked. It simply is not enough just to have a web site. The pages must be marketed on-line, optimised to meet the demands of the search engines, boosted up the popularity rankings by linking strategies and promoted by whatever means appropriate and possible on a week-by-week basis. The shoemaker's web pages will require good on-line marketing by an expert. On-line marketing has now become a science of its own and requires the employment of professionals. Without this there is no point in writing even one page of html code.
If he's followed this advice, our shoemaker should by now have reached the first page of search engine and portal rankings in practically every niche market he can dream up and his order books should be filling. But what if he can't afford the investment for the site and the on-line marketing. In an ideal world his bank would bend over backwards to provide the funds to turn the business into a market leader. In reality, particularly since the dot com bubble burst, the bank manager may be very sceptical. This is where the power of the internet comes into its own. Because of the unique ability of internet technology to track sales, it is possible to form strategic alliances for absolute win-win situations.
So if the bank manager fails to see the tremendous opportunity for business growth, our shoemaker has several options. He can simply negotiate a percentage sales cut for both his webmaster and his web marketer. That way he retains the database of customer enquiries for himself and he designs and controls the branding of each niche market. The operation is tracked by the on-line shopping cart software and the webmaster and marketer both derive revenue dependent upon their success.
Another possibility is that the shoemaker, interested only in the manufacturing production of shoes, prefers not to get into customer relationship management. He wants merely to manufacture the goods and arrange the supply chain for delivery. In this case the webmaster and marketer design and manage the brands, retain the customer database and carry out all customer relationship management activities - effectively using the shoemaker as their supplier. This model has great advantages for everyone - particularly SMEs. They all do what they are best at and everyone in the 'virtual company 'concentrates on their key skills.
When the webmaster and marketer are in control of the customer database the opportunities are endless and some of them can filter back to our shoemaker. Let's imagine that the web marketer does a similar deal with a sock and ladies tights manufacturer. He now has a customer database of those who buy shoes, complete with information on sizes and types enabling him to target permission based email marketing at a most receptive market. The potential customers for socks have already purchased on-line so they are amenable to the technology and delivery system, they know the company they are dealing with and therefore there is already trust in the success of the transaction. The likelihood of a sale is increased. Similarly the customer information from the sock and tights manufacturer will benefit our shoemaker when those who buy full-fashioned seamed stockings are given the chance to buy 4.