How many times do you need to hit yourself in the head with a hammer before you get the lesson? Over the years, it took me several times (with different types of hammers) to learn to identify my niche market (“sweet spot”) and stick with it. I remember a landlord/tenant matter that my then-law partner and I took on. The client owned a building, and was trying to rid it of non-paying tenants. So if owning a building was his business, that made him a small business owner, right? Not exactly .
Or rather, not exactly the kind of small business owner who was in our sweet spot. We didn’t know the court rules. We didn’t know the building regulations. So we had to spend extra time (which we couldn’t charge for) trying to get up to speed. Every step we took felt like we were getting deeper and deeper into quicksand. Ultimately, we got the result the client wanted, but that didn’t make it a success. The client was upset with the lengthy delays; we were upset with the eroding profit margin. Lesson learned.
By limiting your business to opportunities within your sweet spot, you complete jobs faster; quality is higher, costs are lower, customers are more satisfied, risks go down, and profits go up. I understand that the economy is tough. The siren call of dollar signs can make you lose sight of the long-term costs of taking on clients you don’t serve optimally. Rather than see it as restricting your opportunities, think of it as providing “exclusive” service to a particular market.
- Create your perfect client profile: There are the obvious, marketing-related demographics, like age, income, gender and others, to consider. But also include subjective assessments, such as personality type, communication style and quality, and organizational skills, to identify customers you can work with well.
- Fine tune your message – Reassess the way you communicate and the words you use. Re-position as necessary to target your perfect client profile. By focusing on the right prospects with a message that doesn’t overpromise what you can deliver, customers in your sweet spot respond.
- Stay disciplined – There will always be temptations to expand your niche area. Ignore them. Paradoxically, the wider you cast your net, the more diluted your message will be … and the fewer “fish” you’ll attract. Instead, remain in your sweet spot doing what you do best.
When you become known as the “go-to” company for __________________ [fill in your niche], you’ll find ever-greater success. And that leads to the Holy Grail of repeat customers.
Tip: If 80% of your revenue comes from 20% of your clients, you don’t need to increase sales to the other 80% of your customers. You need to find more customers like those 20%.