Shrink the Pond

tommcmakin.jpgAsk someone to name a take-and-bake pizza store, they will name Papa Murphy’s.  Ask them to recommend a hardware store, they will tell you, “Ace is the place.”  Each of these concepts is known because they are strongly niched and therefore have a permanent spot in our mind.

Successful business owners know this and do two things consistently.  They niche what they do, and they are able to articulate what they do, who they serve, and how they’re unique in a short, pithy sentence—a so-called elevator pitch.  Do these two things well, and people will not only understand what you do, but they will remember you later when they need what you offer or when someone asks them for a recommendation.

The foundation on which niches are built are a handful of meta-categories we carry around with us all the time like an organizer into which we file the hundreds of businesses we run across every day. These meta-categories are “first,” “best,” and “biggest.”

Who is the biggest cola company? Coca-Cola.

Who is the fifth-biggest cola company? Don’t know.

Who was the first president? George Washington.

Who was the twenty-first president? Don’t know.

We know Coca-Cola’s name because it lives in a room, a room called, “the largest.” Recall the room and Coca-Cola’s name floats to the surface of our mind’s vast pond.

To successfully niche our businesses, we need to decide what we are good at and then define it—by geography, company size, or another quantifier—and then practice a succinct pitch in which we can truthfully say:

We were the first firm to protect North Carolina law firms from cyber-attack.

We are the largest cybersecurity firm in Charlotte.

Gartner rates us as the most effective cybersecurity firm in the Southeast.

Want to be remembered? Find a category where you can be number one in some way.

Jackie Kruger runs marketing for the Minneapolis-based accounting and financial services consulting firm, CliftonLarsonAllen.  She says, “I always tell my practice leads to shrink the pond.”

Better to be a big fish in a small pond than a small fish in an endless ocean of near competitors. When it comes to business, being undifferentiated is death. “Our company is the largest cloud-based HR software integrator for midsized accounting and law firms in the Southwest” is far better than, “We are a one-stop IT shop that helps clients design and build technology solutions.”  You can try and be all things to all people, but you will pay a cost:  No will remember what you do, a lone voice lost in the hubbub of commerce.

I recently spoke with a top-25 accounting firm about business development.

“Where are you looking to grow?”

“We are focused on $500 million revenue companies.”

“What are some projects you have done recently where you did a really good job for the clients?”

“We have worked with two mining companies to help them install state-of-the art enterprise risk-management systems.”

“That is a niche you could own. You could be the largest accounting firm focused on serving the mining industry. Try that as a focus for your business development—calling on mining company CFOs, sharing with them case studies on how you have helped similar firms. You have a right to dominate that niche which will be more effective than just saying you work with big companies.”

The firm narrowed its focus, and their reputation for expertise in that niche grew. Soon, they were being invited to speak at mining industry panels, had convened a best practices roundtable for mining CFOs that meets quarterly, had hired a retired mining executive as an advisor, and in general had positioned themselves as the go-to accounting firm for global mining companies.

The rule is that if you can’t say you are the largest or best in a category, make your market definition smaller. Shrink the pond.

Good: We are the third-largest oil and gas lease consultant in North America.

Better: We are the largest oil and gas lease consultant in Texas.

Good: We specialize in business law.

Better: Voted the best franchise attorneys by the International Franchise Association for the last five years.

This is because specificity attracts. If you say you are San Diego’s best taco, you will develop a name for yourself in that market. More importantly, when your potential customers get a craving for asada, they will punch your name into their phone and beat a path to your door.

Tom McMakin is CEO of Profitable Ideas Exchange (PIE), a leading provider of business development services for consulting and professional services firms.  Previously, he held leadership positions in private equity and served as the chief operating officer of Great Harvest Bread Co, a multi-unit operator of bread stores.  Tom is the author of How Clients Buy: A Practical Guide to Business Development for Consulting and Professional Services (Wiley, 2018). 

www.profitableideas.com