![[object Object]](/lib_qCrXTStEWrVRBBCT/bqdzxecrrkwaxowq.png?w=50){kind=small}
In this blog post, we’ll walk you through a step-by-step approach to conducting a market research campaign that will help you find the perfect niche for your web development agency. The step by step process is replicable for any business.
1. Defining Your Business’s Core Strengths and Values
The first step in finding the right niche is to look inward. Before you start gathering external data, it’s important to understand your agency’s core strengths and values.
- What does your team do best?
- What kinds of projects have you enjoyed working on the most?
- Which services have provided the greatest value to your clients?
Conducting a Self-Audit:
Start by looking at your past projects. Identify the ones that were the most successful, both in terms of client satisfaction and revenue.
- What kinds of non-profits did you work with on these projects?
- What specific services did you provide that set you apart from other web development agencies?
- Actionable Tip: Use a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to assess your agency’s internal capabilities.
For example, if your team excels at building custom content management systems, but struggles with UX design, that could inform your decision to focus on sectors that prioritize CMS functionality over design aesthetics.
Example of Self-Audit Questions:
- Which projects delivered the greatest client satisfaction?
- What types of non-profits have we worked with most frequently?
- What specific technical solutions have we provided that were especially valuable?
- Where has our agency faced challenges, and how can we improve?
Case Study: Let’s say your agency has worked with non-profits in various sectors, but your most successful projects were with educational organizations that needed robust platforms for student engagement. You provided custom learning management systems that integrated seamlessly with existing school software. This would be a clear indicator that the educational non-profit sector is a strong potential niche for your agency.
Using SWOT Analysis: To help you organize this information, you can use a SWOT analysis tool. For example, in your “Strengths” column, list out the services your team excels at, such as custom CMS development or e-commerce integration for non-profits. In the “Opportunities” column, consider the market demand for those services in different sectors.
Are there emerging trends, like digital transformation in the education sector or a need for more secure online donation platforms?
By the end of this internal analysis, you should have a clearer picture of where your strengths align with the needs of specific non-profit sectors. This will serve as the foundation for your broader market research, allowing you to focus on sectors where your agency can deliver the most value.
2. Conducting Broad-Level Market Research to Understand Non-Profit Sector Trends
Now that you’ve gained clarity on your agency’s strengths, the next step is to gather external data to understand broader trends across various non-profit sectors. This is where quantitative market research comes into play, helping you identify high-growth sectors that have significant demand for the digital services you offer.
Key Areas to Research:
In this phase, your goal is to collect data on the following areas for different non-profit sectors:
- Market Size: Determine the size of each non-profit sector (e.g., healthcare, education, environmental) in terms of total revenue and number of organizations.
- Growth Rates: Identify which sectors are growing the fastest. For example, the environmental conservation sector might be experiencing a surge in funding due to increased attention on climate change.
- Technological Needs: Assess the level of digital maturity in each sector. Sectors with a lower degree of digital adoption may represent opportunities for you to provide more value.
Data Sources to Use:
- Non-Profit Times: This is a great resource for getting insights into non-profit sector growth, funding trends, and the overall health of the industry. You can use their reports to identify which sectors are receiving the most attention and funding from foundations and government grants.
- Statista: Statista provides data on market size, growth rates, and trends across various non-profit categories. It’s a great starting point for high-level data on how different non-profit sectors are performing in terms of revenue, number of organizations, and funding.
- Foundation Center: This platform offers detailed data on grant-making and philanthropic funding. Understanding which sectors are attracting the most funding can help you identify areas with high growth potential. For example, if educational non-profits are receiving the largest share of grants, it could indicate strong demand for web development services in that space.
- Google Trends: This tool helps you understand search trends over time for specific sectors. By looking at search volume for terms like “environmental non-profits” or “educational non-profits,” you can gauge public interest and awareness around different causes. Sectors with growing search interest may signal a rising demand for digital services.
Step-by-Step Guide to Gathering Data:
1. Market Size and Growth: Start by pulling high-level data from platforms like Statista and IBISWorld to assess the size and growth of each non-profit sector. For example, Statista’s report on “U.S. Non-Profits by Sector” will provide a breakdown of market size and projected growth rates for key sectors like healthcare, education, and environmental causes.
- Actionable Tip: Create a comparison table that ranks sectors based on size and growth. Prioritize sectors that are growing rapidly, as these are more likely to have a need for digital services as they scale.
2. Funding Trends: Use the Foundation Center’s database to identify which sectors are receiving the largest grants and donations. This is particularly useful for understanding where philanthropic and governmental funding is being directed. Sectors with substantial funding often have more resources to invest in their digital infrastructure.
- Example: If environmental non-profits are securing large grants for climate action programs, this could indicate a growing need for web development services to support donor management, volunteer coordination, and program tracking.
3. Technological Maturity: Many non-profits lag behind in adopting modern digital solutions. Identify sectors where non-profits are struggling with outdated websites, donor management systems, or content management systems. These are the sectors where your web development expertise can have the greatest impact.
- Actionable Tip: Use case studies from competitors or non-profit technology platforms like Classy or Blackbaud to see which sectors are under-served in terms of digital adoption.
Ranking and Prioritizing Sectors:
Once you’ve gathered data on market size, growth rates, funding, and technological needs, it’s time to rank the different sectors. Use the following criteria to prioritize potential niches:
- Market Size: Larger sectors with more organizations generally provide more opportunities for client acquisition.
- Growth Rate: Sectors that are growing quickly may have greater demand for your services in the near future.
- Digital Needs: Sectors with outdated technology or a low degree of digital adoption present opportunities for you to provide significant value.
Case Study Example: Let’s say you’re comparing two sectors: education and environmental non-profits. Your research shows that while both sectors are large, environmental non-profits are experiencing faster growth due to increased awareness of climate change. Additionally, many smaller environmental non-profits are still using outdated websites and manual donation processes, indicating a strong need for digital services. Based on this data, environmental non-profits might rank higher as a potential niche.
Tools to Use for Broader Market Research:
- Google Trends: To track the popularity of various non-profit categories over time.
- Foundation Center: To access data on philanthropic giving trends.
- Statista: To compare the size and growth of different non-profit sectors.
- Tableau: Use this tool to visualize and organize your data in a way that makes it easy to spot trends and opportunities.
Actionable Tip: Use Tableau or Google Data Studio to create data dashboards that display the key metrics for each sector. This will help you compare different non-profit categories visually, making it easier to see where the highest opportunities lie.
3. Narrowing Down to High-Opportunity Niches with Industry Reports
Once you’ve gathered broad-level data, the next step is to narrow down to high-opportunity niches within the non-profit space. This is where industry reports, competitive analysis, and more detailed research into specific sectors come into play.
Leverage Industry Reports:
Industry reports provide in-depth insights into the challenges, opportunities, and trends within specific non-profit sectors. These reports are often published by consulting firms, non-profit technology providers, or sector-specific organizations. By reviewing these reports, you can identify emerging trends, pain points, and gaps in service offerings that your agency can address.
- IBISWorld: Offers data on specific industries, including non-profit sectors like healthcare and education. For example, IBISWorld’s report on “Educational Non-Profits in the U.S.” can provide insights into the key challenges and opportunities in this sector.
- McKinsey & Company: McKinsey’s non-profit sector reports are rich in data about operational challenges and trends. Look for reports on digital transformation and technological adoption in the non-profit space.
- Pew Research Center: Focuses on societal trends, including education and healthcare. Their research can help you understand the evolving needs of non-profits in those sectors.
How to Use Industry Reports:
- Identify Sector-Specific Pain Points: Look for pain points that are common across non-profits in your target sectors. For example, many healthcare non-profits struggle with ensuring HIPAA compliance for their digital platforms. Educational non-profits may face challenges with integrating learning management systems with their websites.
- Uncover Growth Opportunities: Reports often highlight emerging trends or new regulatory requirements that could drive demand for your services. For example, new data privacy regulations could force non-profits to upgrade their digital infrastructure, creating an opportunity for web development agencies to step in and offer compliant solutions.
Example: Let’s say you find a McKinsey report that highlights the growing need for digital transformation in healthcare non-profits. The report notes that many non-profits in this sector are struggling to manage donor data securely while complying with healthcare regulations. This insight could help you decide to focus on building HIPAA-compliant web solutions for healthcare non-profits.
4. Conducting Qualitative Research: Interviews and Surveys
After gathering broad quantitative data, the next step is to collect qualitative insights through interviews and surveys. This is where you’ll dive deeper into the specific needs, pain points, and goals of non-profits in your potential niche. While quantitative data helps you identify trends and opportunities, qualitative research provides a more nuanced understanding of the challenges your clients face.
Structured Interview Plan:
Your first step in qualitative research is conducting interviews with key stakeholders within non-profits. This might include executive directors, program managers, or IT staff, depending on the size of the organization. Your goal is to uncover recurring pain points, unmet needs, and opportunities for digital transformation.
How to Structure the Interviews:
1. Prepare Your Questions: Your questions should focus on uncovering challenges related to digital infrastructure and web development. Avoid yes/no questions and focus on open-ended queries that allow interviewees to elaborate on their experiences.
- What are your biggest challenges with your current digital tools or website?
- How do you manage donor data, and what issues do you encounter?
- What features do you wish your website or digital platform had that it currently lacks?
- How important is security and compliance in your web development needs (e.g., for healthcare non-profits)?
- Have you experienced any recent challenges with online fundraising or volunteer management? If so, what were they?
2. Selecting Interviewees: Choose a mix of existing clients, potential clients, and industry experts. By interviewing both current and potential clients, you’ll get a balanced view of the pain points faced across the sector.
- Actionable Tip: Include a few interviews with organizations that didn’t hire your agency in the past to learn about the reasons they chose a competitor. Understanding why non-profits opt for other agencies will help you refine your niche offering.
3. Conducting the Interviews: Use virtual meeting platforms like Zoom or Google Meet to conduct your interviews. Ensure you record the sessions (with permission) and transcribe the interviews for future reference.
- Tool Recommendation: Use Otter.ai to transcribe the interviews automatically. This will save you time and ensure that you have a written record of all the insights shared during the conversations.
Survey Design Best Practices:
In addition to interviews, you can use surveys to gather broader qualitative insights from a larger sample of non-profits. Surveys allow you to collect feedback on specific topics quickly and can be distributed to a wider audience than interviews alone.
1. Survey Tool Selection: Use tools like SurveyMonkey, Typeform, or Google Forms to create and distribute your surveys. These platforms offer templates and customizable options that make survey creation easy.
- Example: Create a survey aimed at non-profits in the environmental sector to gather information on their biggest challenges with donor management systems. Include questions like, “What features are most important to you in a digital platform for managing donors?” and “How satisfied are you with your current website’s user experience?”
2. Designing the Survey: Focus on a mix of multiple-choice questions and open-ended questions. While multiple-choice questions help you gather structured data, open-ended questions provide richer qualitative insights.
- How would you rate the importance of the following features in your website (e.g., online donation functionality, volunteer sign-up, donor management)?
- What’s one thing you wish your website could do that it currently cannot?
3. Actionable Tip: Use conditional logic in your survey design to tailor questions based on respondents’ previous answers. For instance, if a respondent indicates that their biggest challenge is with donor management, follow up with specific questions about their donor database.
Summarizing the Qualitative Data:
Once you’ve gathered qualitative insights through interviews and surveys, the next step is to analyze the recurring themes and trends. Look for patterns in the challenges that non-profits face and align these insights with the quantitative data you’ve already collected.
- Actionable Tip: Use Thematic Analysis to group your findings into key themes. For example, if multiple non-profits mention issues with outdated donation systems, you can categorize this as a “donation management” theme.
- Theme 1: Outdated Websites: Several non-profits reported issues with outdated content management systems that don’t allow for easy updates.
- Theme 2: Data Security Concerns: Healthcare non-profits expressed concerns about securely managing sensitive data and maintaining HIPAA compliance.
- Theme 3: Difficulty Managing Volunteers: Environmental non-profits noted challenges in organizing volunteers through their existing websites, leading to inefficiencies.
Case Study Example:
Let’s consider an example of an environmental non-profit. Through interviews, you learn that their biggest challenge is managing volunteer sign-ups during peak seasons. Their current website doesn’t have an integrated volunteer management system, leading to errors and confusion. This insight can help you propose a solution that addresses this gap—such as integrating a custom-built volunteer management system that streamlines communication and scheduling.
5. Analyzing the Data and Identifying Patterns
Once you’ve gathered both quantitative and qualitative data, it’s time to analyze the results and identify patterns. This step involves synthesizing the data from your market research and client interviews to find common themes, opportunities, and gaps in the market. Your goal is to find the overlap between non-profit needs and your agency’s strengths.
Steps to Analyzing the Data:
1. Combine Qualitative and Quantitative Insights: Review the data you gathered from industry reports, interviews, and surveys. Look for patterns in the challenges and opportunities across different non-profit sectors.
- Example: If multiple environmental non-profits mention challenges with donor management, and your quantitative data shows strong growth in environmental non-profits, this could be a signal that the environmental sector presents a high-opportunity niche.
2. Create a Matrix to Compare Niches: Use a simple matrix to compare the different non-profit sectors based on market size, growth potential, and digital needs. This will help you visualize which sectors offer the best fit for your agency.
Create a matrix with the following columns:
- Sector: List the different non-profit sectors you’re considering (e.g., healthcare, education, environment).
- Market Size: Assign a score based on the size of each sector.
- Growth Rate: Assign a score based on projected growth.
- Digital Needs: Assign a score based on the level of digital infrastructure needed.
- Match with Agency Strengths: Assign a score based on how well the sector’s needs align with your agency’s core competencies.
3. Use Data Visualization Tools: Tools like Tableau or Google Data Studio can help you visualize your findings. Create charts or graphs that display the market size, growth potential, and digital needs of each sector.
- Actionable Tip: Use a bubble chart to compare sectors based on these criteria. Each bubble represents a sector, with the size indicating market size, the position on the X-axis showing growth potential, and the position on the Y-axis representing digital needs.
Example: After analyzing the data, you may find that the environmental non-profit sector ranks highly in terms of market size and digital needs but has a moderate growth rate. In contrast, educational non-profits might rank lower on digital needs but higher on growth potential. These insights will help you decide whether to focus on one niche or explore multiple sectors.
6. Testing Your Hypothesis with a Pilot Campaign
Even after conducting thorough research, you won’t know for sure whether your chosen niche is the right fit until you test it in the real world. A pilot campaign allows you to experiment with messaging, test demand, and gather feedback from potential clients before fully committing to a specific niche. This is a low-risk way to validate your assumptions and make adjustments as needed.
Steps to Running a Pilot Campaign:
1. Create a Landing Page for Each Niche:
The first step in your pilot campaign is to create a dedicated landing page for each of the niches you’re considering. These pages should be tailored to the specific needs of non-profits in that sector and clearly communicate the value of your services.
- Actionable Tip: Use tools like Unbounce, Leadpages, or Webflow to quickly create landing pages for each niche. The goal is to create pages that speak directly to the challenges faced by non-profits in the sector (e.g., environmental non-profits, healthcare non-profits).
- Example: For healthcare non-profits, your landing page might highlight your expertise in building HIPAA-compliant websites and secure donor management systems. For environmental non-profits, you could emphasize features like volunteer management systems and donation tracking tools.
- Headline: Focus on the key pain points of non-profits in that sector (e.g., “Transform Your Donor Experience with a HIPAA-Compliant Website”).
- Sub-headline: Offer a solution that directly addresses the pain points.
- Features: List 3-5 features or benefits of your services tailored to the niche.
- Call to Action: Include a clear call to action (e.g., “Schedule a Free Consultation” or “Download Our Case Study”).
2. Run Targeted Ads:
Once your landing pages are ready, use paid advertising to drive traffic to them. Focus on targeting non-profits within each specific niche to see how they respond to your messaging.
- Facebook Ads Manager: Facebook allows you to target non-profits by industry and interest. You can narrow down your audience to specific sectors like environmental or healthcare non-profits.
- LinkedIn Ads: LinkedIn is ideal for targeting decision-makers within non-profit organizations, such as executive directors and program managers.
- Actionable Tip: Run A/B tests with different ad copy for each niche. For example, test one version of your ad that focuses on donor management and another that focuses on digital fundraising to see which resonates more with your audience.
3. Offer an Incentive to Drive Engagement:
To encourage non-profits to engage with your landing pages, consider offering a free consultation, a downloadable resource (e.g., an eBook or white paper), or a discounted service. This will help you attract potential clients and start building relationships within the niche.
- Example: Offer a free 30-minute consultation for non-profits that are looking to upgrade their digital platforms. Alternatively, create a downloadable guide on “5 Must-Have Features for a Successful Non-Profit Website” that provides value while positioning your agency as an expert.
4. Track Engagement Metrics:
As your ads run, monitor key metrics to evaluate the effectiveness of your campaign. These metrics will help you determine which niche shows the most interest in your services and where to focus your efforts moving forward.
- Click-Through Rate (CTR): The percentage of people who click on your ad and visit your landing page.
- Conversion Rate: The percentage of landing page visitors who take the desired action, such as scheduling a consultation or downloading a resource.
- Cost Per Lead: The total cost of acquiring a lead through your ads.
- Tool Recommendation: Use Google Analytics or Hotjar to track user behavior on your landing pages. These tools can show you how long visitors stay on the page, where they click, and whether they take the desired action.
Example of Pilot Campaign Results:
Let’s say you run two pilot campaigns—one targeting healthcare non-profits and the other targeting environmental non-profits. After running the campaigns for two weeks, you find that your healthcare landing page has a higher conversion rate, with more organizations scheduling consultations. In contrast, the environmental non-profits landing page generates a lower click-through rate, suggesting that the messaging or offer may not resonate as well with that audience.
Based on these results, you might decide to focus more heavily on the healthcare sector and refine your messaging for environmental non-profits, or pivot away from that niche altogether.
Actionable Tip: Document the results of your pilot campaign, including the performance of each landing page and ad. This will help you make data-driven decisions about which niche to pursue and what adjustments to make to your messaging and offerings.
7. Refining and Finalizing Your Niche
Once you’ve gathered feedback and data from your pilot campaigns, it’s time to refine your approach and finalize your niche. The goal is to identify the sector where your services are most in demand and where you can provide the most value.
Reviewing Pilot Campaign Results:
Start by analyzing the results of your pilot campaigns. Which landing page received the most traffic? Which niche had the highest conversion rate? Did one sector show more interest in scheduling consultations or requesting more information? Use these insights to determine which niche is the best fit for your agency.
- Actionable Tip: Create a comparison chart that summarizes the results of your pilot campaigns. Include metrics like click-through rates, conversion rates, and the number of consultations booked for each niche. This will give you a clear visual representation of which sector performed best.
Making the Final Decision:
To finalize your niche, consider the following factors:
1. Market Demand: Which niche demonstrated the highest demand for your services based on the pilot campaign results?
2. Alignment with Strengths: Does the niche align with your agency’s core strengths? For example, if your team excels at building secure, HIPAA-compliant websites, then healthcare non-profits might be the ideal niche.
3. Long-Term Growth Potential: Consider the long-term growth potential of the niche. Is the sector expected to grow in the coming years? Are there emerging trends or regulatory changes that could increase demand for digital services in that space?
Case Study: Let’s say your pilot campaigns revealed that healthcare non-profits had the highest demand for your services, particularly around compliance with HIPAA regulations. Additionally, your internal audit showed that your team excels at building secure web platforms. Based on this data, you decide to focus on healthcare non-profits as your niche, confident that you can deliver significant value to organizations in this sector.
Actionable Tip: Use a decision matrix to weigh each niche based on factors like market demand, alignment with strengths, and growth potential. This will help you make an objective, data-driven decision about which niche to pursue.
Conclusion
Niching down isn’t just a strategy for growing your web development business—it’s a long-term approach to establishing your agency as a trusted, expert partner in the non-profit sector. By following the steps outlined in this guide—defining your core strengths, conducting broad and qualitative research, and testing your niche with a pilot campaign — you can create a sustainable growth plan that positions your agency for long-term success.
You can join our 1:1 training program if you or someone in your team wants to learn market research and do it in-house. In 8 weeks, we’ll take you from a newbie to an absolute master of research.