In order to make sure your membership business is profitable, you have to select the right market. Here’s how.
Step 1 – Find a Fanatical Market
If you want your membership business to be profitable, you have to find a marketing with fanatics in it. Simply put, a fanatic is someone who’s willing to spend time and more importantly money on a topic they are interested in. Here’s how to find fanatics:
- One simple idea that’s easily forgotten is to scan the magazine racks when you’re out and about. Because it’s becoming harder and harder to keep print periodicals profitable these days, if you see a magazine on the shelves, you know it’s making money. And that means there are lots of people interested in it. That doesn’t mean definitely that it will make a good membership business, but it’s a good starting point.
- Watch and listen for fanatics in your daily life. Pay attention to conversations, social events, TV, restaurants, public places to see what people are talking about. People generally talk about things they are interested in. Which means you can start a membership business providing information on 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. By the same token, if enough people are interested to hold a convention on a certain topic, you can definitely find enough people to build a membership business around that same topic.
- Think about the things that you are interested in. If you’re interested in something, it’s highly likely others are, too. And, as an added bonus, it’s much more fun to build a business around things you’re interested in.
- One simple and easy way to find out what’s hot is Google Trends. This service shows you the current most popular search terms. These are the things people are actively searching for in Google. They’re searching because they want information. These are the niches you want to be in – lots of people actively searching means lots of opportunity.
Step 2 – Determine the financial feasibility
OK, so you’ve got a great idea for your niche membership business with lots of fanatics. But will they actually spend money? An easy way to determine this is to figure out if anyone else is making money in this niche.
OK, how do we figure that out?
- Are there blogs or forums in this niche? Take the name of your niche and search for “niche name blog” & “niche name forum” in Google to see if there is an active group of people talking about and interested in the niche. This lets you know there is a market (a group of people actively interested in the niche.)
- See if other people are creating and selling product in this niche by searching in Google Shopping, ebay and Amazon. If other people are creating and selling products in this niche, it means there is money to be made.
- Monitor Google Adwords to determine if people are running the same ads for weeks in a row. If they are, this means they’re making money on these ads – otherwise, they’d stop running them. Which means there is money to be made in your niche.
Last, but not least… How hard will it be to break into this niche?
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? How do you gauge the ease of entry?
- 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. That’s because it’s much easier to build a membership business around information vs. any other kind of product.
- The last thing you want is a marketing filled with tons of competitors. A few means it’s a profitable niche, but too many means you won’t be able to take a piece of it.
- Unless the market is just so big that it doesn’t matter how many competitors there are, you want to limit the competition. So evaluate the size vs. the competition.
- How ready is the market for marketing messages, and how willing are the fanatics to buy. Depending on the market it can be anywhere from a couple minutes to a many months between when someone starts the investigation process to when they actually make a purchase.
Summing it all up
At this point you’ve figured out what niche you’re going into. You found your fanatics, you know they spend money and you’re confident there’s room in the market for you. If you’ve followed along with these steps you’re success in practically guaranteed. The only thing left to cover is exactly how to run your membership business…
