‘Find a niche and own it’ has been a mantra of mine for years.
SME’s who have done this can do very well.
What it implies is that you have gone out and found those few people who overvalue what you do very well.
Defining what you do better than anyone else is the start.
You do not have to be the best in the world, you just have to be the best available to your ideal customer. For many SME’s that is a geographic market, for others, it may be personal service, or a particular blend of coffee beans the delivers a specific flavour, every time when made by Tony the barista.
When you excel at something that a potential customer overvalues, that is a recipe for success. Price will become a secondary consideration.
My eldest son paid his way through university buying and selling guitars, and valves for amps. He knew guitars and their value, so was able to make a few bucks on the arbitrage. However, he knew valves to an extraordinary level of detail. His market was highly specialised Blues guitarists in Sydney, those few insisted on valve amps rather than the modern electronic units. They came to him explaining the sound they wanted from their amp, and Geoff would assemble a valve set that delivered. It was a very narrow, deep, and specialised market and price was never a determining factor.
As University neared completion, he had to ask himself if there was a market in the niche, rather than just a niche in the market. His conclusion, yes there was a market in the niche, but the infrastructure and investment necessary to make a real commercial go at it, rather than just be a side gig for a uni student was more than he was able to make. As a result, he wound it down, and got a ‘proper job’ after graduation.
Briggs and Stratton is one business that years ago identified, leveraged, and now owns a global niche for mobile, small capacity internal combustion engines designed for outdoor use. Lawn mowers, outboard motors, pumps, and mobile generators all use B&S motors, often supplied and branded with the end product. For example, Victor lawn mowers in Australia is a venerable brand. The motor is branded Victor, the engine is actually supplied by B&S.
As their markets ‘electrify’ power systems (engines and batteries) for mobile machinery, it remains to be seen if they can retain their position.
When you are the only solution to a burning problem, even when only a few have it, price becomes increasingly less relevant as the urgency of the problem increases.
The marketing challenge is to identify and highlight the problem to which your solution is the only one possible.
Header drawing by DALL-E
