“The customer is always right.” This pulls some weight in our camp when it comes to customer service, but in reality customers shouldn’t dictate our business operations. They know what they want, but unlike many of the entrepreneurs that serve them, they often don’t understand what’s possible. Henry Ford may have said it best: “If I’d asked customers what they wanted, they would have said ‘a faster horse.’”
Listen to your customers, but stay committed to your vision. Otherwise, you risk spreading yourself thin in an effort to please everyone, instead of building something truly spectacular.
TOMS Shoes is a great example of a company who created a unique niche in the business world and profited immensely as a result. While on vacation in Argentina in 2006, founder Blake Mycoskie noticed the overwhelming number of barefoot children – too poor to afford shoes. He returned home with the desire and drive to make a difference. And, from his apartment in Venice, Calif., TOMS Shoes was born under a unique business model: For every pair of TOMS bought, the company will donate a pair to a poverty-stricken child.
Mycoskie sought out a much different niche for his company – philanthropy. But, he knew that by carving out and dominating the unchartered territory within the shoe industry, his company could be successful by achieving its most important thing: helping children in need.
Consumers who buy TOMS understand that it’s one thing is to put shoes on their own feet, but are attracted to the idea of simultaneously buying shoes for kids who need them. They seek TOMS out, not for the variety of colors or styles, but because of the philanthropic mission that the company embraces. And, today, it is safe to say that TOMS is successful because of the socially responsible niche it created.
As a small business owner, we recommend you follow Mycoskie’s lead. “I had an idea and it was a small idea when we started. Anyone can make a difference, so you don’t have to have it be some huge, global campaign … you can start small and that’s just as important,” he says.
Like Jim Collins famously wrote, “Focusing solely on what you can potentially do better than any other organization is the only path to greatness.”
For starters, don’t try to appeal to everyone. Instead, understand your business model and clientele. Then find your unique value proposition, and focus on maintaining this edge by taking these three action steps:
1. Benchmark and trend. Define your playing field and make note of what the best are doing around you. Then research trends that are occurring so you know where the market is going. When Blake Mycoskie established his unique philanthropy-focused business model, he noted that even though TOMS’ model would have lower margins and profits than other shoe companies, “what we do will help us get publicity. Lots of companies give a percentage of their revenue to charity, but we can’t find anyone who matches one for one.”
Evaluating your market shouldn’t be a one-time activity either. Doing it on an ongoing basis keeps your business in the best position to meet the changing needs of your customers and take a leap ahead of the competition.
2. Become an expert. Never underestimate the power of knowledge. Writer Jeff Haden believes authority is best obtained by narrowing your field of expertise. He says, “You simply cannot be an expert in everything. If you try, you create a wide shallow pool instead of a deep well of knowledge.” So instead, do your due diligence when researching your business’ niche. When your “fountain of knowledge” status becomes clear, your clients will seek out what you have to say.
3. Learn to say no. When Steve Jobs returned to Apple, he cut its product line from 350 to 10. What’s that mean? Once you’ve found your niche, stick with it. Resist the urge to expand too soon or into completely foreign territories. Take J.M. Smucker Co. for example. Started from the back of a horse-drawn wagon in 1897, Smucker’s has remained a family business for over a century by sticking to what it’s good at – jelly. After ruling the morning spreads’ segment for decades, the company paid $3 billion to acquire Folgers in 2010. “A freshly brewed coffee is the perfect complement to breakfast or dessert, two areas we know a lot about,” said Timothy Smucker, great-grandson to company founder Jerome.
Smucker has since acquired top brands—Hungry Jack, Pillsbury, Dunkin Donuts and more—that continue to complement its expanding niche, and now owns the number one brand in 10 separate areas. Your niche should never shackle your growth; it just focuses it.
What’s your unique value proposition, and how are you defining your niche?( credit Keller Ink Team)