Would you rather have a slither of the large pie, or the entire small pie?
Are you likely to hit more targets if you rapidly fire a machine gun randomly, or take precise shots with a sniper gun aimed at a target?
There is a misconception that you will be more successful in business if you service everyone and anyone. The thought process exists that the larger you cast your net, the greater the chance of catching enough fish to meet your needs.
In reality, it has been shown that the reverse is actually the case. Where you target your product or services to a small segment of your market you are more likely to attract the volume of customers you need to generate a profitable business. When you are fishing for a certain type of fish, you get to know the attributes of that fish, where it swims, what depth of water it prefers, what it eats. As a result, you place your net in those waters where you know those fish swim. You choose the time of day most appropriate for catching the most possible fish, and you use a certain type of bait which is attractive to that type of fish.
You become an expert in fishing for this type of fish, hence there is far greater success from deliberately fishing to catch the fish you want, with far less effort expended.
Creating a niche market generally leads to a sense of simplicity within your business which can be achieved by limiting the products or services you sell, targeting a particular customer segment, and/or creating automation and streamlining processes.
The benefits of achieving simplicity is that it gives you the opportunity to replicate or scale the model, thus enabling you to penetrate other markets or locations.
An example of a business which has developed a niche business model is The Posy Post.
The Posy Post is a florist who creates one bouquet, or posy, a day, at the same cost every day. The price includes delivery of the Posy. Order are placed by 11.30am for delivery that day.
What I like about this business model is the simplicity. Customers are not presented with numerous choices, causing confusion and barriers to the purchase. The price point is the same every day, and there is value for money in the quality of the posy.
I believe this model appeals to people who are time poor, who want to give a gift of flowers without spending a great deal of time choosing which arrangement. It also appeals to an audience who do not have a great deal of knowledge of flowers.
How do I choose a specific target?
1. Consider which aspects of your work or business you enjoy doing the most. For example, it may be a particular aspect of the service you deliver, or you may gain great satisfaction from working with certain clients.
2. Where do you add the most value in your business?
3. Which aspect of your business is the most profitable?
If you have been casting your net too wide, now is the time to hone in on which markets will represent a better catch for your business. Consult with a business advisor, accountant or a colleague to step back from the business and analyse it with a Bird’s Eye Approach.