Profit Building Strategies: Niche It, Niche it Good
The word "niche" may be all the rage these days, but it really isn't a new concept. In fact, savvy marketers have been quietly raking in their fortunes using the niche principle for hundreds of years.
Now, don't panic if you have an established business; you can still carve out a niche market for yourself, if you haven't already done so. With a few basic principles and a bit of ingenuity, you can establish yourself as the premier player, and make a tidy sum doing it, too.
You Can't be All Things to All People
Repeat after me, "you can't be all things to all people." It's extremely important that you understand this, so repeat it again. Put it on a sticky note, and put it up next to your computer, a file cabinet, or the fridge. Keeping this simple phrase in mind will help you to avoid this costly mistake that many new business owners succumb to.
Why is this so important?
First, you automatically eliminate the stress involved with keeping up with so many market segments. Maintaining a pulse on one segment is challenging enough - why make a tough job even tougher? Consumers' buying preferences change rapidly - suppose you purchased a pallet of plastic bottles to receive a quantity price break, only to find out that the latest trend is now to package the product in eco-friendly corrugated cartons? If you were following the market closely, you may have anticipated these changes - but, if you are juggling multiple products and markets, chances are you missed this news completely.
Second, when you spread yourself too thin, you aren't giving any market or customer your best service. It just can't be done. Focus on one market or market segment, and give it 100% of your effort, your creativity, and your attention.
Finally, attempting to be all things to all people can get quite expensive. If you are a manufacturer, the costs involved with bringing in the raw materials for multiple products can be expensive - and, if you don't have a strong inventory system in place, you will continually struggle to keep adequate supplies on hand. What do you do if a particular market becomes sluggish, and the raw materials have a limited shelf life? If you don't have an outlet to move that inventory, that expense is now a complete loss. Did you hear that? That was the sound of profit being flushed down the toilet. Ouch.
Different is Good
If you are offering the exact same product as the guy down the street, why should I buy it from you? It's important that you determine what sets you apart from your competition. If you selling an identical product, (like cellular phone service, for example), you need to be able to offer something to sweeten the deal. Do you offer better service, free phone, car charger, etc? At that point, we're no longer comparing apples to apples - you've tossed an orange into the mix.
Suppose you were to offer your service exclusively to doctors - perhaps coupling that with a larger package that included an after-hours answering service. You've now focused on a specific niche, and have set yourself apart by offering additional services. This is an added bonus for your customers, and it also gives you a competitive edge, and places you in a position to garner additional sales. Now that's just what the doctor ordered!
The Solution: Niche It, Niche It Good
Don't misunderstand what I am suggesting - I'm not saying you have to be a one-widget wonder. Let me use an example to illustrate my point:
Suppose you offer an all-natural, handcrafted incense product. You offer it retail on your website, and wholesale to select accounts.
Why not modify the product to allow for:* Private labeling for spas, gift shops or holistic health centers?* Package a special "Zen" or "Meditation" assortment package, and specifically target yoga and pilates instructors, or massage therapists?
By doing this, you've potentially increased your sales volume, without adding a new product. You are simply adapting an existing item for a new niche. This method of marketing can be done with little or no cost, but can yield big results.
Traci Hayner Vanover, The Promo Diva(R), is the publisher of Create the Dream magazine, http://www.createthedream.com, and the president of Market Outside the Box Trade Association, http://www.marketoutsidethebox.com. She also works with private clients as a publicist, copywriter and consultant.
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