In order to make sure your membership business is profitable, you have to select the right market. Here’s how.
First – Look for Fanatics
The first step in developing a profitable membership business is to find a market with fanatics in it. What’s a fanatic? It’s someone who is so excited about a certain topic that they will spend their time and money on information about it. OK, so we know what a fanatic is, but how do we find them?
- One simple idea that’s easily forgotten is to scan the magazine racks when you’re out and about. It’s becoming increasingly difficult to run a print magazine. So if you see one on the shelves you know they are making money, which means that there are enough people interested in what they’re saying to make it profitable. If they can make money in a print version, you can probably make money with a membership website.
- Pay attention throughout the day in your regular activities. See what people are talking about on the radio, TV, at parties, in public, etc. If people are talking about it, they are interested in it. And this means there may be a market for information about it.
- Conventions, clubs, and organizations. Once again, if there are enough people interested in a topic to create a club or organization, then there are enough people to build a membership business around it. Conventions are expensive to hold and attend, so if one if going on that’s another strong indication of a good niche to go into with your membership website.
- Think about the things that you are interested in. Chances are that if you like a certain topic or hobby, other people do, too. And, as an added bonus, it’s much more fun to build a business around things you’re interested in.
- Another fantastic way to discover what people are interest in is Google Trends. Google Trends tells you the most popular current search terms. These topics are the hottest topics because lots and lots of people want information about them. Hot topics that people are excited about make great niches for your membership website.
Step 2 – Determine the financial feasibility
Once you found a potential niche or topic to center your membership site around, you need to figure out if you can actually make any money in it. One way to figure this out is to see if other are making money in it.
OK, how do we figure that out?
- First go to Google and type in the name of your niche followed by “blog” and “forum”. If there are blogs and forums related to it, that’s a good sign. This tells you there are people who are actively interested in your niche.
- Search Amazon, Google shopping and eBay to see if people are creating and selling products in the niche. What you’re trying to figure out is if anyone is making money in this niche, and if people are selling products it means they are making money.
- Look at Google Adwords for the same ads are running over time. If people are running the same ad over time it means they are making money in the niche. They would not continue to spend money on the ads if there were not making a return from them.
Step 3 – Determine ease of entry
OK, so you found a hot topic and you know other people are making money on it. Will you be able to get involved and do the same? Here’s how to make this determination:
- Figure out what kinds of products people are interested in. If it’s mostly physical products, coaching and live seminars, then it will be harder to break into this niche. The easiest membership website to create and maintain are information membership sites.
- The next thing to look at is the competition. You don’t want to try to break into a saturated marketing, so figure out how many people are already selling in this niche.
- Compare the size of the market versus the number of competitors. Some competition is a good sign – just make sure the market is big enough for you to join in.
- Market readiness. Are people ready to buy? Are the receptive to marketing messages? Every market is different. Sometimes people are looking for information and are ready to pay for it right now. And sometimes it takes weeks, months or even years for them to make the decision to purchase.
Putting it all together
So far, we’ve talked about exactly what it takes to pick a great niche: One with a hungry crowd of fanatics, who are ready to spend money on information about their topic. And you’ve determined your barrier to entry is small enough to give it a go. If you’ve done your homework, your business will be a success because you already know your market is a profitable one with room for you. Learning how to run a membership website is a topic for another article…
