Marketing Niche Software

How to Use Market Segmentation To Find Your Niche

What is the best way to grow a small software business? 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?

These are the best two ways to identify strong software market niches:

  1. Go For Growth - identify and target growing market sub-segments.
  2. Profitable Prospects - focus on your most profitable customer sub-groups.

Keep reading below for tips and suggestions for each of these approaches.


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Targeting Growing Market Segments

Instead of trying to cover your entire market segment, spend a little time doing some focused market research, and you will probably find some niches that are growing more strongly than others.

These are just some that seem strong for software marketing: Utilities, Healthcare and Government (Gartner predicts these will be the strongest-growing verticals), Business intelligence (according to Forrester Research this horizontal continues to be strong, with the growth of big data, analytics, machine learning and data science). Also 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.


Identify your most Profitable Customer Subgroups

The other way to focus on marketing niche software is to target only your most profitable customer prospects.

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. 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.


Focus by Marketing Niche Software

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 continue to grow and build market share and those that don’t.