NICHE FOCUS STRATEGY:
MAKE MORE PROFIT – FIRE CLIENTS
Let me just qualify what I mean. Well, actually let’s qualify your clients.
Whenever I see a small business that advertises itself as a Full Service… It makes me feel uneasy. The expression “Jack of all trade, master of none” springs to mind immediately. Most of us start our own business because we have a skill that people are willing to pay for. You soon find out that, in order to pay your bills in the first few months, you start taking on work that you can do, but it’s not the area where you have real expertise. What we’re doing here, from a consulting point of view, is spreading into a horizontal market. That’s not where the money is! It’s where the hard graft, long hours and low return can be found.
Ideally, instead of spreading ourselves thinly, we should dig deep and specialise further and further. That is where the money is. Clients will always pay a premium for expertise. After all, would you rather have your GP or a brain surgeon perform brain surgery? Your GP is qualified, knowledgeable, has a great bedside manner and you know them. The brain surgeon charges a premium, you don’t know them, but, they specialise in brain surgery. No-brainer, no pun intended. Next question, which one plays more golf?
The transition from serving a thin horizontal market to developing a deep vertical one, is not a transition to make overnight. There are a number of things to consider:
- will people pay for your specialised product or service;
- the available market in your location;
- how do you market and promote your expertise;
- determining a realistic market price for your “newfound” expertise;
- changing your existing customers for those who value expertise;
- developing valuable expertise whilst paying the bills.
Do you remember your first term at high school? You make friends with anyone that will talk to you. You then spend the second and third semester trying to get rid of most of them. You’d much rather hang out with the cool, beautiful and sporty types.
It’s very similar when you start a new business. Initially you do business with anyone that will do business with you. We hang on to customers and are afraid to rock the boat. “They were loyal to us when we started out”. Let’s be honest, either they were family and friends, people after a deal and you couldn’t afford to say “No”, or, they were so awful to deal with no one else would take them on. Now you have a portfolio of customers and clients who keep you busy but not necessarily profitable.
You can’t just stop hanging out with your customers and hope they’ll get the message. Much like High school you have to approach this in a way that will enhance your reputation not damn it.
- Position yourself and your business as THE expert, THE best in class. This generally means being an expert in your field. In his book the Zulu Principle, author Jim Slater considered that if you read 3 books on the Zulu’s you will be viewed as an “expert” amongst the population as a whole and if you read all the books on the Zulu nation that you can get hold of and visit there too, you could be viewed as a ‘leading authority’;
- Packaging: professional presentation is key. Not just what you offer but also yourself. If you want clients to take you seriously dress the part. You don’t have to have a 3-piece pinstripe suit, in fact that probably wouldn’t help, but you must look and act the part of the expert;
- Promote: no longer are you a ‘full service’ anything, you are now specialists and THE best! Use testimonials to verify it, talk at trade events, write articles for the local newspaper (ghost writers are awesome for this) and mine your existing network for referrals whilst extending your reach in your niche.
- Counsel out the clients that no longer fit your new business model. Introduce them to your former competitors who offer “full-service” mediocrity. Don’t burn bridges, your former customers can still bring in valuable referral business.
Want to find out more about developing a niche focus strategy and mapping out action plans to transition your business?
Drop me a line now.