Creating Your Niche in the Marketplace
Defining your niche is all about making sure your business has no competition (especially no price competition). Too often in business, I find that companies are competing on price. Why? If you’re competing on price, you’re saying that you’re no different than your competitor. Differentiation is the key to having a great business; a business that is focused on building profitability, not on revenue.
Too many businesses are so focused on price because they haven’t defined what makes them unique. Claiming that you give better customer service doesn’t count. These type of “fluff” ideas and claims are not tangible to the customer. Your differentiator needs to be something that the customer can hold onto that says, “this is what’s different about this company.”
As an example, look at local gas stations. What’s the difference between them and the next one? Not a lot. You could buy gas at any one of them and it wouldn’t really make a difference. What they’re doing is competing on price every single day. It is purely price-focused competition.
Unless competing on price is your strategy (such as bulk retailers or bulk sellers), you’re going to want to compete on something other than price. To do so, you need to create your niche. In order to create your niche, you need to come up with some form of uniqueness (also called a Unique Selling Proposition). This is really just defining in a sentence or in a few words what’s unique about you in your business. This uniqueness could be how you developed the product you developed, or how you provide service in a defined, measured way. Your uniqueness could also be offering a written guarantee that addresses the frustrations your customers are most likely concerned about when doing business with people in your industry.
What is your uniqueness in the marketplace? What do you do to stand out from your competitors? If you do nothing to stand out, then you’re competing on price (and you don’t have any other options but to compete on price). By defining your Unique Selling Proposition, you will start to move away from customers who shop by price and start moving toward customers who shop for value (which is where you will make more profit).