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Home Best Practices “The riches are in the niches.”

“The riches are in the niches.”

A common marketing mistake among small business owners is that they go after a market that is too broad.  They want to cast their net as wide as possible in the belief that it’s a numbers game . . . that the bigger the market, the more potential customers there are, and with more potential customers, the odds of snagging a few of those customers improves.  While that may be a reasonable line of thinking, it’s wrong.  The truth is, when you try to appeal to everyone, you end up appealing to no one.  You’re really better off identifying a niche you can serve . . . preferably one that’s “an inch wide and a mile deep.”  Your niche may be defined by an under-served geographic marketplace, or it may be defined by a particular area of expertise.  Either way, in a highly targeted niche, you have a chance to stand out and to have your message heard.  Not so if you try to attack an entire category where prospective customers won’t know who you are, what you’re trying to do, or who you’re trying to serve.  So why do small business owners resist pursuing a niche strategy?  To learn the answer, and to get some tips on how to identify and carve out your niche, please continue reading below.

“The riches are in the niches.”       ~ Unknown

Somebody may know who coined that phrase, but we don’t.  There are so many marketing articles and books written using that phrase, it’s difficult to pick out who started it.  It could be brand strategist Philip VanDusen, but we couldn’t find any confirmation of that.  So for now, it’s origin will remain one of life’s little mysteries.

Anyway, as to the question posed above, small business owners who resist a niche strategy do so simply because they believe that by casting themselves in a narrow niche, they will miss some opportunities.  While that’s an honestly-held fear, it’s an unfounded one.  In fact, if you’re a big fish in a little pond, you’ll be more likely to find those opportunities, or have those opportunities find you.

For many business people, deciding what niche to carve out is a significant problem.  We tell ourselves that we’re good at what we do, but we have to admit, our competitors are good too.  Our quality is top notch, but so is theirs.  We have great customer service, but they’re no slouches either.  Our pricing is very competitive, but they’re right there with us. So how do we make ourselves stand out?  What will cause our customers to select us rather than one of our competitors?  It’s a tough question.

A brand strategist we know tells us that most companies don’t know why their customers have chosen them over their competitors.  They think they know, but they’re really just guessing, and in the vast majority of cases, they’re guessing wrong.  So there’s a disconnect between what the company thinks it’s selling and what the customer thinks it’s buying.  In some cases, the disconnect is significant, in others it’s subtle, but it’s almost always there, and it’s in that disconnect that your niche lies.  There’s something you’re doing (or not doing) that your customers value.  Find out what that is, and you will have defined your niche.

An outdoor lighting company lights up the homes of the rich and famous.  Usually, the lighting company isn’t hired directly by the homeowner, but instead, works as a subcontractor to the homeowner’s landscaping company.  With annoying regularity, just before 5:00 p.m. on a Friday afternoon, the lighting company gets a panicked phone call from one of its landscapers who begs, “You gotta help me.  Mrs. Smith is having a big party and she wants her lighting up by Sunday.”  The lighting company’s owner accepts the challenge, much to the dismay of his employees whose weekend plans are now in tatters.  They complain to him, “Why do we work for these clowns who can’t ever get their act together . . . it’s always a last-minute scramble to bail them out of trouble.”  The company owner answers, “You don’t understand.  These clowns who can’t get their act together are our customers.  The landscapers who are all buttoned up and well-organized can get anybody to do their lighting work.  They don’t need us.  But when a landscaper gets things screwed up and needs someone who can perform at the last-minute, we’re the only game in town.”  So his niche is disorganized landscapers who regularly get themselves in a jam and need someone who can come in on short notice to save the day.

If you’re still struggling to find your niche and if your “unique selling proposition” is elusive, try asking your customers.  That’s right, ask your customers!  Offer to buy them a cup of coffee and ask this question:

“You don’t have to do business with us.  There are others you could have chosen to do business with, but you didn’t.  You chose us.  Why?”

You will probably be surprised by what you hear.  You may even find out that you’re not in the business you thought you were in.  Maybe you’re not in the outdoor lighting business at all.  Maybe your real calling is to save the butts of disorganized landscapers.

Peter Schutz, lecturer, writer, and former CEO of Porsche once said, “If you listen carefully, your customers will explain your business to you.”

He’s right.

 
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