We know, through our own consumer behaviour, that many of the products and services we use are the same. Whilst one might offer marginally better service than the other, or the one might have a product that lasts marginally longer than the other, at the end of the day there’s very little to choose between what’s out there.
And, that’s why niching is becoming an increasingly interesting prospect. Through focusing your business, or perhaps gearing a part of your business, towards a niche market, you should be able to service that sector better than what is currently on offer in the larger, more mass oriented segments.
There are numerous options that you can consider:
1. Customer-size specialist
Your business can concentrate its efforts on small businesses, for example. The market leaders will normally invest in acquiring the larger customers, and the sheer size of its operation may prevent it from being effective with smaller customers. Offerings and service delivery will likely need to be customised to be relevant to the sector you choose.
2. Geographic specialist
For a short while, I was in a charge of an organisation that targeted high net worth individuals in the greater Johannesburg and Pretoria areas. The business was extremely successful, and well recognised in its segment. We often believe that we must be national, international or even global to have a successful business, but that thinking may not necessarily be true.
3. End-user specialist
Your organisation could target a specific end-user, such as mothers, or dentists, or FMCG retailers, small business owners, Chief Executive Officers, or any other specific user groups. Your organisation would need to know that user group better than any of your competitors, if you are to be and remain successful in this segment.
Your firm may have the ability to distribute products in a way that few other organisations do. Consider the likes of Tupperware and Avon, who are experts at distributing through home-based parties, and a network of predominantly women. Leveraging a clear distinction like this can earn you competitive differentiation, and perhaps even advantage.
5. Production capacity
Perhaps your organisation is in the production game, and can gain more efficiencies than your competitors. Perhaps it is time to seek out products that are similar to what you already produce, and add them to your production line in order to keep capacity up.
Perhaps your business is geared to be able to customise the order for every single one of your end-users. The ability to achieve this, and the premium that you could likely charge for the attached exclusivity may make this niche an attractive one.
7. Single company sales
Perhaps your organisation can build a relationship with one customer, and manufacture and sell your entire ‘crop’ to this single entity. Understanding the attached risks, having one customer to concentrate on comes with a lot of benefits.
These are just some ideas, amongst many, for niching your business. Research indicates that niched businesses can enjoy double the return that they receive in larger markets. This stems from the fact that niche businesses become experts in their niches, and are therefore able to deliver superior customer value, and ask a premium for that differential.
It may be a strategy worth considering.
Need help evaluating whether you should enter niche markets, and considering what your niching options could be? In2Great Consulting can help.
Contact us here, or mail us at info@in2GreatConsulting.com.