There is a common theme emerging among my business coaching clients; it is a death knell that most fail to recognize. What are the symptoms of this downward progression?
- A sense of being overwhelmed
- Frustration that sales haven’t significantly increased, despite time and effort
- The inability to clearly and powerfully articulate what they do
These are symptoms of a larger issue: Not having a laser-focused target market.
Most entrepreneurs are resistant to defining their niche usually because of the following things. Do any of them resonate with you?
1 – Fear that if you choose a specific target market, you will lose potential business.
The truth – the more specific you are with your market, the more people will want to do business with you. For example, you have been hit by an 18-wheeler who crossed the median. Both the semi and the driver belong to Wal-Mart. You need an attorney. Would you rather hire an attorney who knows a little about a lot of different types of law, or an attorney that has experience litigating cases against massive corporations and has a track record of winning?
2 – If I choose a target market, I will be stuck with it forever and I like variety.
The truth – Once you’ve established credibility and superiority in a target market, you are positioned to expand into other areas. Here is a true story. One of my clients is an insurance agent. He sells lots of different types of insurance. However, his target market is the dental community. Why the dental community? First, his father was a dentist (now retired), so he grew up in the dental world and understands it. Second, he found that there was only one agency that had the majority of the local market share. The good news? My client’s portfolio of policies was better than the competition. Third, this market has money.
Nine months later, my client has dominated the dental market in his community. He went from zero dental clients to insuring 40% of the dentists in his area; the other 60% are scattered amongst many smaller agents. He is THE expert in dental insurance and is invited regularly to speak at dental association meetings and conferences. The best part is that most of his sales now come from referrals rather than cold-calling. Is he stuck? No. His long-term plan is to firmly root himself as “the resource” for insuring Dentists and then move into other parts of the medical community.
3 – The more products (or services) I sell to more people, the more money I will make.
Think of the sun shining through a crystal. What happens? A glorious display of all the rainbow colors dancing as the crystal moves. Is there power in that crystal? No. It is beautiful, but there is no power.
Now think of the sun shining through a magnifying glass. No dancing rainbow colors there. But is there power? Yes. When the sunlight is
concentrated through a magnifying glass long enough, you create fire. The truth – if you have a wide variety of products for multiple demographcis, you may look good. But you are diluting your message, time, energy and marketing efforts. The more focused you are, the more power and forward momentum you will build which will translate into increased sales.
Are you a crystal or a magnifying glass? Have you defined your target market?
More on target markets coming soon.
Photos courtesy of rx2web,spacepleb
{ 2 comments… read them below or add one }
Hi Alicia, Love this post. Great analogy: Crystals and magnifying glasses connote “light” and “vision”. I also speak about the importance of “target marketing” with my clients to create focus and results. However, being a “crystal” at times, can help to diversify services and capture additional client business. For example, I’ve expanded my Search & Recruiting practice to offer other “Human Capital” services, including; Recruiter Training, Career Coaching, Job Search Consulting and Employment Expert Witness. All related. All profitable. Look forward to reading your future posts!
You make some great points Mike and I agree that at some point in a person’s business, expansion can be good and quite profitable. In your experience, what do you see more of? Business owners with laser-like focus who need to expand their offerings, or business owners who are too diversified. I’m interested in your observations. Thanks for the comment!