The Internet has opened up great opportunities for niche marketing - provided you base it on strategic alliances. Dixon Jones explains how to make the most of the Web.
The Internet has been one huge learning curve, and nobody 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 halt. With the bursting of the dotcom bubble, we have witnessed only too clearly that expensive entrepreneurial gambles are not made without enormous risk of failure.
It should have been a matter of common sense. Unless a business has something tangible to sell, there is no revenue to be had.
Conversely, however, if there is something worth buying, then the Internet provides the most wonderful doorway to a world full of potential customers. In particular, it brings the opportunity to address specific customers in niche markets.
There still exist many new and 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. Let's suppose he makes shoes of all sizes, all types, all colours and for all occasions. His marketing opportunities before the Web depended on costly brochures, mailshots, advertisements, location and reputation.
Where he did address 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 requirement of the largest possible customer base. If you have enormous feet, you will be only too aware of this fact!
But now our shoemaker has a website, and the potential to address the world. What's 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 focused 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 website 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 noone ever sees the site - something that is often completely overlooked.
It simply isn't enough just to have a website. The pages must be marketed online, 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 online marketing by an expert. This has now become a science of its own, and professional help.
If he's followed this advice, our shoemaker should by now have reached the first page of search engine 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 online 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 dotcom 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.
Firstly, he can simply negotiate a smaller fee with both his Webmaster and his Web marketer in exchange for a share of income from the site. That way, they are incentivised to do a really good job for him, yet he retains the database of customer inquiries for himself, and controls the branding of each niche market.
The operation is tracked by online 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 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.
Concentrating on key skills
This model has great advantages for everyone - particularly small businesses. They all do what they are best at, and everyone 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.
Targeting a receptive market
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 the most receptive market.
The potential customers for socks have already purchased online, so they are amenable to the technology and delivery system. Furthermore, they know the company they are dealing with, and 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-inch stiletto heel shoes!
The permutations for such strategic alliances are endless. It's true that they existed before the Internet, but it is the technology that has made it possible to build supply chains and alliances which greatly outweigh the benefits of similar traditional business models.
What is unique about Internet alliances is that all parties can receive real-time information emailed directly to their desk, enabling them to track and monitor the progress of the campaign as it happens.
For the customers, the benefits are increased. The route to a specialised product is much clearer, the online purchase is made with a familiar supplier, and the likelihood of satisfaction with the purchase greatly enhanced.
With everyone gaining, the Internet once more becomes a level playing field. Large multi-national organisations that are currently perceived to be taking the cream from the top will still reap large rewards, but smaller players still have the same opportunities that they did at the start of the Internet revolution.
For the entrepreneur with innovative ideas, the scope for exploiting new niche markets is growing all the time - provided that the thinking behind the marketing is based on strategy and alliances, and not just the numbers game
Dixon Jones is the managing director of Receptional.com, which caters for companies whose website traffic fails to meet expectations.