Nine Ways to Identify Your Niche
The following is an excerpt from Outsmarting Goliath (Bloomberg Press, 2000). For the full
text, as well as examples of each of the nine points, see the book.
Copyright © 2000 by Debra Koontz Traverso.
All rights reserved in all media.
Fortunately, every business can be best at something. If you're having trouble
determining how you differ from your competition, then read on. Below are nine
ways in which you can zero in on your niche or USP (unique selling proposition)
and differentiate yourself.
As you review these nine, remember that what you're trying to do is locate a niche
that matches customer needs (or wants) with your unique selling features or the
area(s) in which you can excel. Your USP will require that you position that image
in the minds of your prospects.
A visible, purposeful difference in benefits must be so obvious to customers that
it compels them to buy from you rather than from your competition. Your USP will be
the one feature you emphasize that makes you unique. Be sure it's based on truth,
that it actually is a strength, and that it's something you can live with for years to come.
Keep this customer-focused question in mind: "Why should I, your potential customer,
do business with you, above all other options including doing nothing?" If you can
answer this question with one (or more) of the nine areas, then those techniques
should work for you.
1. Product or Service
Determine whether your product is unique. What are its quality, features, and
reliability compared to similar products on the market? Is it better built, more
reliable, or less likely to break? If your price is higher, does your product offer
more features to merit the increased cost?
Or, determine whether your service is unique. What service do you offer that's more
reliable or usable by customers? Do customers have a clear understanding of the
benefits they'll derive from your service?
2. Information and Expertise
Your customers and clients want more than a good product or service. With it they
want solutions, information, insights, awareness. If you are the one who has the
facts they need, your chances of getting their business have just improved.
Ways to capitalize on information include distributing newsletters, offering free
informational seminars, and serving as a convener and a referral point. If you
know something worked for one customer, get permission to pass that information
along to other customers.
3. Distribution and Delivery
Do you offer home delivery of your product? Is your product distributed in more
areas than your competition's? Do you provide unusual gift wrapping with delivery?
Do you know if your distribution costs undercut those of your competitors? Can you
provide updates on where a customer's order stands, or will customers just have to
sweat until the items arrive? If you distribute or deliver your product differently
than anyone else does (for example, against aggressive schedules or for less money
than the competition), then this may be your niche.
If you have unique or redundant systems in place to offer customers peace of mind
in purchasing your product or service, then this is your selling point. Car dealers
offer loaner cars for when a purchase ends up in their shop. Electric companies have
several sources of power to rely on in case a storm damages a coal plant or a nuclear
plant unexpectedly scrams (shuts down). Telecommunication companies offer redundant
hosts, routers and lines in case the primary system is overloaded. My local bank
changed its business hours to better accommodate customers who work the traditional
nine-to-five shifts. One bakery I consulted with near Philadelphia keeps a full day's
supply of baked goods in huge freezers at a location separate from its ovens in case
its primary location is ever rendered unusable. (Why? It provides a backup supply of
goods so that customers' orders are never left unfilled.) These are all examples of
unique, backup, or redundant systems, ways of doing business that can deliver a
little bit more to customers.
Sometimes special customers deserve special treatment. Through personal experience,
I know that the old marketing axiom known as the 80/20 rule is true: 20 percent of
your customers will generate 80 percent of your business. These "twenty-percenters"
should get special recognition or allocation of assets above all others.
Although all customers are important and should be treated accordingly, your
biggest or most long-standing customers should receive a higher level of service..
The airline industry recognizes this. That's why airlines reward their frequent
I have seen incentive programs run from the creative to the mundane, from the
complex to the dead simple. Either way, incentive programs generally work because
customers walk away from the transaction feeling that they got just a little more
For example, I like going into Waldenbooks and receiving a 10 percent discount
each time I purchase a book. My son, on the other hand, likes to go to Borders,
where employees punch out a circle on a customer card for each purchase of a
children's book. He knows that when he receives 10 punches, he will get a $5
gift certificate. The malls are full of eateries that provide you with a customer
card, encouraging you to return because by the time you've purchased your tenth
sub or slice of pizza, you know a free one awaits you. Video rental stores do this, too.
So, learn from the masters. Or learn from your local bookstore, or video store,
or dry cleaners, or pizza shop. Develop an incentive program that not only brings
in customers, but will make you look like a corporate good citizen, and you've got
a winning selling point.
You know that box that motivational speakers and management gurus insist we think
outside of? That's where you're going to find your innovative ideas: outside the
box. When it comes to addressing client needs, the issues that you face are inside
the box, just as they are for the big businesses. In fact, in-the-box issues tend
to be very similar, whatever the size of a company.
When big businesses find they have to solve their problems in a standardized,
procedural, policy-driven, that's-the-way-we've-always done-it way, small
businesses can use creativity to come up with outside-the-box solutions. After
all, you can think and act like a revolutionary when you are not weighted down
like a corporate dinosaur with multiple staff levels and burdensome forms of
checks and balances.
7. Promotional Tactics
Promotion includes just about anything you do, once established, to woo customers
to your door. These tactics can be subtle or they can be blatant, making customers
unmistakably aware that you are trying to woo them.
If you want to start thinking about creative tactics, listen to your local
radio station: cash for the eleventh caller, a day at a salon for the best
office prank of the month, a free trip to Hawaii for finding a key hidden
somewhere in town. Creativity begets creativity, and analyzing even tacky
ideas that worked well for another business may help you to come up with unique
tactics tailored to yours.
Promoting through paradoxoperating your business in a manner different from
or even opposite to what is expectedcan sometimes work.
Tactics don't have to be complicated. Simple tactics draw attention too. For
example, let's say that you hold an annual spring promotion just like all your
competitors do. To distinguish yours from everyone else's, do something original
like distributing your sales flyer folded around a pack of seeds. Or give away
tickets to the first 100 customers for a chance to win a free spring window cleaning.
8. Customer Service
Let's think like customers for a moment. Let's say that every card shop in your
town is the samein other words, everything from selection, to quality, to
good location, to price, to incentive discounts, to advertising techniques is
equal. How would you decide which shop to patronize? More than likely, your
decision would be based on how you feel when you shop at each location, and
you'll select the one that makes you feel more welcome and more valued. But
what does that mean? If you like browsing without being bothered, you will
select the shop that leaves you alone. If you want immediate assistance; you
will select the shop that starts helping you the moment you walk in the door.
Think like your customers think and this just might be your niche.
9. Stability and Leadership
I have not come across many small businesses that can market this feature to advantage,
principally becausefor most small businessesit is not yet a strength. Sadly, this
unique selling proposition is one that your largest competitors have going for them.
What I have come across are many small businesses that thought they should be able
to rely on this selling point because they had been around for 20 years or moreoperations
like office supply shops and hardware stores. Unfortunately, however, their long-standing
status in town was generally not enough to help them compete with large chains like Staples,
Office Max, Lowes and Home Depot. They quickly learned that they needed to tap into
(or develop) another unique selling proposition.
However, this just might be your niche, so take a look at what I mean by stability
and leadership. Customers like to buy from companies that they know will be around
tomorrow. They like constancy and consistency of products and services. Ask yourself:
- How healthy is your organization?
- How well capitalized is it?
- How long have you been in business?
- Are you steadfast in presentation, product and price?
- Is your leadership consistent and strong?
- How much assurance will a customer have that you will be in business one month or
one year from today?
- Do you have a low rate of employee turnover?
- Will you be able to follow through on all claims?
If the answers look positive, you may have identified a unique selling proposition
that you should start promoting.
- If you're still unsure where to concentrate your marketing efforts, then ask
yourself these questions. The answers will help you identify your uniqueness:
- What do friends and family always say about you (positive comments only, please)?
- What are your customers saying to you about your business? (If nothing, then ask
them: what's good, what's missing, what sets you apart from the others, what would
they like to see?)
- Do you have a hobby or previous career that can support some features that could
be folded into your business?
- What are some things you've always wanted to do in business but never had the chance?
- What is your marketplace lacking that you can provide?
- What types of people do you work with the best?
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