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May 15, 2001
Q: This isn’t exactly a question, but more a request for some of your great niche examples. When you give concrete examples of companies that have done it, I get a clearer idea of what you mean. I know that you know even though niche is a short word, it’s not slam-dunk easy to define.
A: Thanks for your non-question. I agree that examples are very important and have three that will illustrate different aspects of my favorite word, niche.
If you’re over 35 (well, maybe 40?), Perry Como was likely a familiar and welcome personality in your life. Known as the “Casual Crooner,” Como died last week. Although he was considered a pioneer of 1950s variety shows, and even though he achieved a greater level of success than many other entertainers, more than a few music experts have speculated that Como could have created an even deeper niche for himself if he’d taken firmer control over his material.
For example, Will Friedwald, an expert of music from Como’s era, once called him “a marvelous singer who seemed to do everything they put in front of him.”
Niche Lesson: You can’t be all things to all people. Perhaps because of the times, perhaps because he was so good, Como got away with it. My advice? Don’t push your luck. Get focused and stay there.
Another example of a company that understands niche is Key Private Banking, a division of Key Bank. At one time private banking was a niche in itself. That has long since been the case, however. Financial institutions of all kinds are on the prowl for the high net worth customer qualifying for private banking. One way Key Private Banking is staying ahead of the pack is by offering a particularly interesting service to its special clients doing extensive remodeling at time of home purchase. Called “future-value financing,” this service guarantees money based on the future value of the property. By itself, this service would not be enough to guarantee a niche, but combined with a suite of other value-added products and services, it is yet another reminder just how preferred and special that target customer really is.
Niche Lesson: Pile on the value-added services and then make sure your customer knows they’re getting something reserved for them, alone.
You’ll instantly know why the next example is one of my favorites. The opening lines of a Portland-based CPA’s Web site says it all. Click on www.RayJordan.com and read:
“After 20 years with some of the largest CPA firms in the world, I opened one of the smallest.”
Niche Lesson: Small can be beautiful and very lucrative. Think narrow and deep.
Q: Some time ago you talked about “consequencing” and “trending.” We have used the strategy very effectively here in our construction company’s office. I’m wondering if you have run across any recent examples that make the case for implementing these strategies in our regular business plans.
A: I am always on the lookout for the kind of examples you are talking about -- the kind where domino effect is so clear, you’d have to put blinders on to miss. Oddly enough, there are a lot of blinders out there in use.
One of the most powerful examples of an recent event with enormous ripple-effect relates to the mystery illness which has been killing off prized foals in Kentucky, the center of this country’s horse-racing industry. Consider, for example, that stallion owners typically do not collect fees until the foal stands and nurses. This means that literally millions in “live stud fees” will not be collected. Consider also, the plight of those whose livelihood comes from arranging the sale of young, unraced horses. The list of those impacted by this one event goes on and includes among others, feed producers, racetracks, trainers, and professionals such as attorneys, CPAs, and others serving the horse-race industry.
Perhaps the biggest loser may ultimately be the state of Kentucky, itself, if people lose confidence in the once prestigous farms known for producing prized and healthy foals. In short, customers will take a hike fast. A niche that Kentucky appeared to virtually own is in serious jeaopardy while neighboring states are doubtless gearing up to fill the void. Alas, niched today, gone tomorrow, almost.
Niche Lesson(s): Every change produces opportunity. Kentucky’s loss may be another state’s gain.
You must be obsessively and relentlessly scanning the horizon for events that may impact your niche, both negatively and positively. Sort of like a pilot, you need to take in all the information you can about your environment, both present and coming up. All the while, you need to be flying the plane straight and level. So it is with those of us running a business, regardless of its size. We can’t get so busy doing that we put blinders on and miss the weather ahead.
Even though a critical feature of a great niche is staying focused—eyes on the prize—its flipside is also vital. That is, staying nimble, ready to consciously and methodically shift in that proverbial heartbeat. Again, like the plane being directed from one destination to another, your niche is in constant motion, even if you don’t see it. And like the plane, the pilot always has a viable alternate route or airport, just in case. . . .
So that you don’t misunderstand, I am not talking about “B”-words or backup plans taking you in an entirely different direction because, as you know, I think they can be the kiss of death for your business. I’m talking only about staying nimble enough to massage your niche in case a very fast train is moving down the track, headed straight for it.
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