Yesterday we spoke about a specific usage scenario can create a niche for doing DR for ERP users in states where hurricanes are common.
Lets look at how on the consumer side you could use the same concept.
There are a lot of dry cleaners in every city. If you were to segment by just the demographics you may not be able to come up with a uniquely different niche.
But suppose, your demographic data threw up a lot of families with kids and you were to target parents of kids who play sports.
You create your operation in such a way that you can turn around a dry clean in less than 6 hours.
When my son was school going, there were so many times I wished if we had a dry cleaner who could get the blazer cleaned within a few hours.
Now if you can message to these parents about how you can get their sports stains completely removed within 6 hours, then you could remove one of the major hassles.
For doing this service you could be charging a premium. Once you have made the customer you could still offer the normal dry cleaning as well for all types of clothes but you will create the perception of being a specialist.
Where this strategy could fail is if there aren’t enough school going kids in the neighborhood or if someone is already giving 6 hour dry cleaning for all clothes at all times.
Marketing at the end of the day is also knowing about what your direct competitors are doing as well as what are the other methods for the customer to achieve the same outcome.
As I write these things, I also sometimes get a better understanding of how to solve a problem I am facing. As Joe Polish says – and I am paraphrasing it – the best way to learn anything, is when you are able to teach someone about it.
Till next time.
One of the flaws of identifying a niche by doing pure demographics is painting all customers with the same brush.
My suggestion for identifying a niche is to first segment by demographics and then segment by usage.
Lets say you are a company which provides backup and disaster recovery services. There are a whole lot of companies who can put on their brochures that they provide backup and DR services.
All it needs is a company which has some backup software and access to the cloud platforms to say that you could provide a DR solution.
So how can you differentiate your company’s offerings.
How about offering DR to users of ERPs in zones which are prone to hurricane activity. You could talk about how you are geared to move complete IT operations of your customers to another site in case a hurricane strikes.
Your messaging then becomes very specific to those kind of customers. You then look at what all are the possible options that the customer has to achieve the same objectives. Something similar to what Clayton Christensen speaks about the job of the Milkshake
Based on this you further fine tune your niche and accordingly build your messaging and your go-to-market plan.
This was a B2B example from IT. Tomorrow we will take an example from the consumer side.
In part V we spoke about identifying different channels to reach your prospects.
To grow any business you need to identify the one key constraint which could hold you back.
In professional services its your time, in manufactured products its the time of the slowest machine, products which are dependent on natural capacity like farm produce or eggs are dependent on the the capacity of the farm or number of hens respectively.
If you can plan your business based on the constraint – highly recommend reading the Theory of Constraints by Eli Goldiratt and his second book The Goal – then you can take better decisions.
So if you are in professional services, and you can only work 8 hours a day, you need to figure out which is the niche which can help maximize the return on your time. If you’re a property / real estate agent then you need to focus on the segment where you can get a higher value for your listing as in designer homes versus condos.
Or you build partnerships so that your constraint can be a leverage to someone else.
Till next time.