How to Dominate Your Market and Get Rich in the Niche!

How to Dominate Your Market and Get Rich in the Niche!

If you try to be everything to everyone, you won’t be anything to anyone!

If you want to dominate a niche, you first have to know what your niche is. Do you know that when you try to be “everything” to everyone, you won’t be “anything” to anyone? You want to be a BIG FISH in a small pond, rather than a minnow in a huge ocean. So, who is your perfect target niche client?

My good friend and business consultant Ellen Rohr explains a simple way to find out. Think about your very best customers. You know, the ones who never complain about price, they always pay on time, and they are a pleasure to work with. That picture describes your target niche market.

Domination Is a Result of Positioning

In their classic marketing book Positioning, Jack Trout and Al Ries describe positioning as a slot in your target market’s mind much like a file in a file cabinet. To illustrate this, let me ask you a couple of questions: when I say “laundry detergent,” what brand first comes to mind? For most it’s Tide. When I say “soft drink,” what brand comes to mind first? Most would say Coke.

Whatever brand first came to your mind is the one that occupies the first folder in the file cabinet of your mind. So your job as a phenomenal marketer is to have a system for posi- tioning yourself at the highest place in the mind of your perfect target market.

Let’s look at three companies that have done this well:

1. Whole Foods—they recognized the growing trend of natural food enthusiasts (target market) and de- cided to take up a position in that space.

2. Starbucks—They created a unique experience around coffee—a commodity that has been around for thousands of years.

3. Harley-Davidson—Whether you’re a biker or not, you must agree that there’s a unique experience around owning and riding a hog! That could be good or bad, depending on your view!

Delivering a Unique Experience Means You Can Charge More

Why do you need to charge more? Because working 24/7 just to barely scrape by is not a phenomenal life. Remember, the only reason your business exists is to help you achieve your life goals.

Why doesn’t the average person shop at Whole Foods? Because of cost. I personally love to shop at Whole Foods because they offer the natural foods that I want. I pay more, but I get what I want all at the same place. My wife tells me I can get certain items cheaper at other places, but I’m not interested in going to three different stores to get what I need, and none of the other stores have the natural foods selection that I want.

“How Much Can You Spend on a Cup of Coffee at Starbucks?”

Starbucks has earned the nickname “Fivebucks,” because you can easily spend five dollars on a single cup of coffee. I decided to find how high I could go on a cup of coffee with Starbucks, so I conducted an informal marketing survey. As I traveled around the country, I would go into Starbucks, walk up to the counter, and say, “I want to buy your most expensive cup of coffee.” Strangely, without any hesitation, they would point to the top of their board and offer something like a venti salted caramel macchiato or something like that. “How much is that?” I asked. “Six twenty-five,” they responded.

“Can you make it more expensive?” I ask.

“What do you mean?” they respond curiously.
“I want to buy the most expensive coffee I can.”
Now they are looking at me very strangely.
“For example, could you add some shots?” I pressed.
“Sure.”
“How many can you add?”
“As many as you want.”
“Yeah, but the venti cup only holds a certain amount, right?” “Right.”
So, they figure that up.
Then almost without fail, another employee comes along and says, “You could add some flavors,” and they begin to calculate all of the additions.

Then, they realize that the concoction isn’t drinkable, or it has so many shots that it might be dangerous.

I assure them it’s okay because I don’t want to drink it, I just want to buy the most expensive cup of coffee I can find.

The highest price I have been able to find so far is $43.27!

Don’t worry, I didn’t pay it. In fact, each episode ends the same way, “Never mind, I’ll just have a tall cappuccino.” (They didn’t think that was very funny, but I always give them a nice tip for playing along.)

I recently came across a video of a guy who did the same experiment with Starbucks. He created a great video of the inter- action and the actual sales receipt!

Is Harley-Davidson concerned about being the cheapest bike around, or are they more concerned with creating the right experience around their brand? The company has created such an identity that people are willing to pay a very high price to own one of its products.

The brand is so strong that customers proudly wear its cloth- ing and even get the logo tattooed on their bodies!

A couple of years ago, I held a leadership retreat in Colorado Springs, and a lovely couple in our coaching program rode their Harley all the way from Florida. They built a seventeen-day vaca- tion around the event. I went outside to see their bike, and the husband was beaming as he showed it off.

As he uncovered the shiny motorcycle, with two seats and a trailer, I could immediately tell it was probably quite expensive. So, I asked, “Chris, how much you got in this bike?”

“Sixty-five grand,” he responded.

“Sixty-five thousand dollars?” I exclaimed. “You know you can get a really nice car for that price, right?” I asked.

He immediately began justifying the expense with the model, type, the custom paint job, and so on. The real truth is that own- ing and riding the motorcycle is an experience that he wants. And he is willing to pay for it.

The Experience Economy

To illustrate how this works, let me share a concept from a phenomenal book called The Experience Economy by B. Joseph Pine and James Gilmore. This illustration is about value offer- ings, and it happens to be about coffee.

When coffee first hits the market as a commodity, it costs about $1 per pound. There is not much differentiation at this point other than the type of bean. Once it is packaged and appears on the shelf at the grocery store, it becomes a good.

How much does a pound of coffee cost at the grocery store? Having presented this message thousands of times, I have found that very few people know how much they pay for a can of coffee! We just enter the store like zombies and grab our brand.

Coffee in the grocery store can range from $2.99 per pound (it’s actually twelve ounces of coffee and four ounces of air—kind of like potato chips these days!), on up to more than ten bucks a pound. We have gone from one dollar a pound to three to ten times the price!

For what? Packaging. The brand.

How is your packaging? How is your brand? Most small business owners are at the forefront of their businesses. Did you know that the way you dress, the way you carry yourself, and the way you communicate assigns a value to you and your business?

The next level is the service level. If you go to Denny’s and buy a cup of coffee, what are you really paying for? You’re not really paying for coffee, right? You are paying for the service of someone brewing that coffee and making it available to you.

How much does a cup of coffee cost at Denny’s? About one dollar per cup. How much of that weak coffee can you make from a pound of coffee? About sixty cups! So the price per pound goes up to about $60 a pound at Denny’s.

When you think about your marketing message, are you talking enough about your unique service? When you sell the benefits of a unique service rather than just the work you do or the product features, you begin to set yourself apart and can therefore charge more than the commodity price.

How to Get People to Stand in Line and Pay You the Highest Prices for Your Product or Service

Finally, the next level is the experience. This would be having a cappuccino in Italy outside one of the historical landmarks. My wife is Italian and we went to Italy for our twentieth anniversary. You aren’t paying for coffee at that point; you’re paying for the experience.

Another example of the experience level would be Starbucks. People stand in line to pay the highest prices for a cup of coffee— a commodity that has been around for thousands of years.

I have a picture I took in the Baltimore airport. There were sixty-three people standing in line at Starbucks. And that was just in a few minutes’ time. There were hundreds of people who stood in that line to pay the highest price for a cup of coffee!

Now, here’s a little disclaimer: there were two other coffee places in that wing of the airport that were closed at that time of the morning. Why were they closed? I can only assume that management felt there weren’t enough outbound flights at that time to justify running the lights, and I can just hear them say that their employees don’t like coming in that early anyway!

But Starbucks understands something the other coffee places don’t. They understand that the people who stood in that line are going to walk onto an airplane with hundreds of other people on it. And they are going to have something very important in their hand—not just a cup of coffee, but the logo on the cup. The brand. That green siren will be tattooed on the forehead of each person sitting in the seats.As each person sitting on that airplane sees that logo, it makes them wish they stood in line for it.

The question becomes “Can you do this in your small business?” And the answer is yes, you can.