The last time you were at a restaurant, how long did you have to look at the menu to understand your options? How confident were you that the longer the menu, the better the quality of the food? Did the waiter know everything about each menu option?
Restaurants are easy to highlight because you know immediately whether you received a quality experience – but many companies in other industries have long “menus” which usually result in mediocre outcomes. There are the “360-degree” public relations firms, home service contractors who “specialize” in nine unrelated parts of your home, and insurance firms which offer a dizzying array of disconnected coverage options.
Small business success often comes from niche focus – providing a limited number of products or services to reach a limited number of excellent customers. Our founder’s recent Forbes.com article profiled several companies which use this strategy to accelerate growth and brand positioning.
Here are three reasons to consider following in these small business owners’ footsteps:
1. Niche offerings eliminate operational waste, improve staff expertise, and result in better customer outcomes. In a restaurant, this means better food delivered right, which results in better tips and return customers. Here’s an example from Forbes:
Business waste eats into profits. Sometimes, this waste is physical. Other times, waste squanders time and mental energy.
Wealth manager Gordon Bernhardt eliminated waste and narrowed his set of services for the Washington, D.C.-metro business community. Twenty-seven years ago, Bernhardt sold insurance and provided investment planning and wealth-management services. A few years in, he gave up insurance to focus more narrowly on what delivered the best results.
Later, he limited his clients to those with at least $1 million in investable assets. The company grew faster, served clients more effectively, and enjoyed greater overall success. The reason: It focused all energy and resources on providing a specialized niche of services to a narrow target market.
2. It’s easier to figure out what works – and what doesn’t. When you have many offerings for many target markets, it’s hard to track, gather, and assess data in a way which creates forward-looking projections and plans. Companies which have fewer offerings provided to fewer target markets have fewer variables to consider. This makes gathering and assessing data, creating forward-looking plans with that data, and implementing those plans both easier and more likely to be successful.
3. It’s easier to stand out against the competition for three reasons.
- First, what is different always stands out. When everyone else is offering “full-service PR,” saying “we put you in the press” stands out. When everyone else “specializes” in roofing, siding, windows, and decks – focusing just on roofs stands out. And when the competition has a smorgasbord of financial products, focusing just on specific types of insurance or specific investment tools cuts through the noise.
- Second, niche offerings make for better messaging. Your sales team can continue to fine-tune your messaging for business development, marketing, and sales because your team is more focused on fewer offerings and your messaging can be more tailored to your narrower target market.
- Third, marketing and branding campaigns are easier. If you stand out by being different, and you’ve correctly fine-tuned your messaging to effectively reach your target market, then investing in a campaign has a much greater chance of success as part of a growth strategy.
It’s never too late to refocus on a niche, or to expand from one niche to another should opportunities arise. In our next post, we’ll show how niche focus creates excellent opportunities for branding and thought leadership through the press.