Marketing Niche Software

How to Beat the Recession with Market Segmentation

How do you optimize your software marketing in a recession? Marketing niche software can be a great way to do it. Research studies have shown that the most successful companies are those that increase their marketing in a slow economy to grow market share and find profitable niches.

How do you find those profitable niches for your software?

There are two possible ways to identify strong software market niches:

1. Target Growing Market Segments

   Spend a little time doing focused market research, and you find some segments that really are still growing despite the poor economy.

   These are just some that seem strong for software marketing in 2009:

   • Utilities, Healthcare and Government - Gartner predicts these will be the strongest-growing verticals in 2009,
   • Business intelligence - according to Forrester Research this horizontal continues to be strong, perhaps because companies are using BI tools to figure out where they can cut costs, consolidate operations, and boost revenues.
   • SaaS - the Software as a Service technology segment will continue to grow, as customers find the low up-front capital investment attractive when budgets are tight.

   When looking for profitable niches, go as narrow as you need to in order to really over-deliver value to those target customers (so long as the niche is still big enough for you to make a business in it): for example, what about SaaS business intelligence solutions for healthcare?

   Develop specific value propositions and messaging for each niche you identify, and focus your sales and marketing efforts in those niches.

2. Identify your most Profitable Customer Subgroups

   Do a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to pinpoint subgroups of existing or potential customers to whom your Unique Selling Proposition (USP) is so compelling that they can’t say no even in a poor economy. Take a look at this article about finding your most profitable target customers. Then develop specific strategies that will help you target and communicate to those profitable subgroups.

If you really focus in these two areas for marketing niche software, and resist the temptation to chase leads in other segments, you can improve profit margins and gain market share. A creative market segmentation strategy can differentiate between those companies that survive the recession and those that don’t.

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