An important aspect of having a successful business is offering the right product to the right people at the right price. This sweet spot becomes your market niche. Different factors come into play in determining your market niche. By evaluating the following four elements, you can define a market niche that will enable your business to thrive:
- Your industry
- Your company
- Your product/service
- Your customers
In the previous article, we looked at how you can better understand your marketplace or industry. In this article, instead of looking outward across the surrounding landscape, we will turn our sights inward to consider your company. In future articles, we will cover the last two steps to defining your marketing niche: your product/service and your customer base.
Jesus said that a person should count the cost before following Him. Counting the cost includes an evaluation of yourself, whether or not you are ready to make a commitment. Understanding your company is also introspective, as you reflect on your past and think about what makes your company what it is today.
In marketing, we don’t usually focus on ourselves (“Look at us! Buy our product because we are awesome!”). Instead, we try to be customer-centric, focusing on customer needs and perspectives (“Here, try this product. It will improve your life!”). However, having a deep understanding of your company is important. In addition to your history—where you came from—you need to know where you want to go in the future.
You may have taken an assessment such as StrengthsFinder, DISC, or Myers-Briggs. These tests help you understand your personality blend and show the way you typically respond to life. Thinking about your company by creating a company profile is a little like these kinds of personality assessments. It can reveal your company’s strengths and weaknesses, what you are good at and what you don’t do well. Knowing these things will help you stake out a unique position in the marketplace.
Mentally raise yourself 30,000 feet above your company operations. Lay aside your biases and assumptions. Be as objective as possible.
What is your company history?
Why history? You might be thinking that the future, not the past, is what counts. Why should you write down your company history?
History gives us the context to understand the present. History explains why we do and say the things we do. Your company is not like an island, unconnected to anything. Instead, your company today is standing on the shoulders of the past. Like our growing-up experiences influence who we are as adults, your company’s growing-up experiences have made it what it is today.
What to include in your history. When writing your company profile, some details are more important than others. Here are my suggestions on what to include—these four questions will get you started:
- When, how, and why did your company start?
- Is the founder(s) still involved, or did others pick up the vision?
- What are major milestones along the way?
- What happened that changed the course of the company?
One contractor started his business doing small residential and agricultural remodeling jobs. One year a snowstorm damaged many poultry houses in his area, creating huge demand for contractors. His crew jumped in to help fill the shortage after the storm. That experience led the company over the next several years to become a leading builder of poultry houses and other agricultural buildings.
Do’s and don’ts for writing your history.
- Don’t brag. Do write down the facts without being bashful about success. On the other hand, don’t hide your embarrassing failures.
- Don’t elaborate on technical details of the process and procedure. Do point out significant technical developments and explain what they meant for your customers.
- Don’t include persona and family history that doesn’t relate to the business. Do share stories about key people that show their influence on the company’s growth or direction.
- Don’t be too formal. Do write like you are telling it to your friend.
Keep in mind that you are not writing to your customers. You are writing for yourself and your partner or team. While you might have all these facts about your company in your head, getting them down on paper clarifies them and allows you to share them with others. In time, a version of the company history might be used in your marketing materials, but that is not the point of this exercise.
What do you do well?
Moving on from your history, let’s look at your strengths. What is your company good at? Some companies are good at innovation. Others excel in customer service. Others have a reputation for dependability.
There are many ways to “do well.” For example, your product can have superior quality, superior features, superior function and performance, or superior aesthetics.
If you are a service business, you might excel in human relations, timeliness, availability, personalization, or ease of doing business.
A family roadside market decided to launch their own brand of canned goods. Because good food and taste were part of their family heritage, they were able to create new recipes that sold well and led to business growth.
One manufacturer has loyal dealers because he and his staff remember the dealer’s names and relate to them on a personal level. Their relationships have gone beyond business transactions to becoming friends.
In terms of marketing and business development, knowing what you do well gives you direction on what to promote and develop. You want to operate within the areas of your strengths, not launch into something for which you are not well-suited. For example, a manufacturer may not be well-suited for getting into retail sales and would be better off to continue developing their wholesale markets.
Conversely, your strengths can provide a solid foundation for launching into a new product line or venturing into a different market. Honda Motor Company originally specialized in small, reliable engines for their motorcycles. With this experience and history, they were able to successfully diversify into automobile manufacturing. Today, they are more well-known (to the general population) for their cars than for their motorcycles and other small-engine products.
In what ways are you different?
Every business can make itself unique in some way. Starbucks is different from Dunkin Donuts. Chick-Fil-A is different from McDonald’s. One shed builder is different from the next shed builder.
Does your company have specialized knowledge or expertise? What is your secret sauce? In the food and beverage industry, recipes literally are the secret sauce. In other industries, some businesses have a special “ingredient” that makes them different from the rest.
For example, a commercial design/build contractor has extensive knowledge of local and national building codes. Over the years, they have built trusting relationships with inspectors. The combination of knowledge and relationships speeds up the process of design and permitting, which of course gives the contractor a competitive advantage because clients are always eager to break ground on new building projects. It also allows freedom of creativity to design more usable spaces without undue expense.
Does your company have specialized equipment or processes? Your specialized resources could be anything from a new manufacturing process that you invented to a customer relationship process that outshines your competition. Perhaps you have invested in a machine that none of your competitors have purchased yet.
Your specialized equipment or process is not an end in itself, but it allows you to offer customer benefits such as a lower price due to higher efficiency, better quality, or a better experience.
Does your company have special connections with other people or companies? This question helps you think about relationships that you may be taking for granted, but that are actually a competitive advantage.
For example, one company found a vendor in another part of the country who was slow during their own peak season. This turned into a win-win situation: the company got better pricing and the vendor got work to fill in their light production schedule during that time of year.
What are your goals for your company?
Zig Ziglar said, “If you aim at nothing, you will hit it every time.” If you have never given much thought to where you’d like your company to go, now is the time to start thinking about it.
Where do you want to be one year from now? Five years? What about fifteen years from now? Do you want to stay a small family operation, or expand to become a much larger business that provides jobs for more people? Do you envision opening new locations or creating new product lines? How fast do you envision growing?
SWOT analysis tool
At Rosewood Marketing, we use a SWOT analysis tool when we help companies create their company profile. The tool is a matrix that asks four questions:
- Strengths: What strengths does the company possess?
- Weaknesses: What weaknesses does the company possess?
- Opportunities: What open doors for growth are in front of the company?
- Threats: What real or potential threats are facing the company?
Chick-Fil-A, a fast-food restaurant, is closed on Sunday because of who the company is. Patagonia, an outdoor clothing brand, donates 1% of sales to environmental causes because of who the company is. At Rosewood Marketing, we offer marketing education in addition to our services because of who we are as a company.
The essence of the Christian life is not found in what we do, but in who we are. That is true in business as well. The heart of your company is not in what you do, but in who you are as an organization. Who you are influences what you do, how you do it, and why you do it.
Stay tuned for the next two articles on how to find your market niche.