Build Your Business: Management

---

August 7, 2015

A high percentage of all small businesses make a big marketing mistake. I don’t want to call it a fatal flaw, but it’s responsible for slowing growth, decreasing profits, making it harder to sell and making these businesses much more likely to lose established customers to new competitors.

The mistake they make is failing to identify specific niches for their target markets. For many years, I’ve asked business owners to tell me to whom they sell. Some of the answers have been:
• “Anyone that wants what I have to sell.”
• “People who want decorated apparel.”
• “Clubs, groups and organizations.”
• “Schools and school clubs.”
• “School and club sports programs.”
• “Businesses and corporations.”
• “Festivals, events and summer camps.”

These are all good answers, but they’re too general. They’re not niches, but rather broad categories. The problem with broad categories is you can never truly stand out. You’re trying to be all things to all people. In the process, you essentially become a commodity, which means the market sees no difference between you and any other decorator. This is particularly difficult to accept for many business owners who sincerely try to do an outstanding job and their customers don’t recognize or appreciate their efforts.

In a commodity market is driven, the lowest price differentiates you from your competitors. How many times have you lost work to the low-ball new guy? Or the committee has a new chairperson who “knows a guy who prints T-shirts.” Just like that, your established relationship is gone, along with the work.

There’s no product loyalty. This is why big companies that sell commodities work so hard to develop their particular brands, the awareness of which is expensive to advertise and promote. Think soft drinks, bottled water, orange juice, bacon, chicken and so on. Brands have more apparent value and generally command a few cents more over the unknown generic.

The real value is in specialization, or niche development. Your goal is to specialize in a particular segment of a broad category. This can more than double or triple your profit and make you the established supplier for your chosen segment. To really dominate a particular niche, you must approach it systematically in multiple ways.

FINDING YOUR NICHES
Focus on niches where you have a personal interest and passion, which enables you to “talk the talk” and “walk the walk” on a peer level. You also can engage on a higher level. The content you post on social media (Facebook, Twitter, forums, your blog) will connect and have greater meaning than someone who knows nothing about the subject.

If you want to see how this works, pick up a copy of Field and Stream or Men’s Health. Look at the titles of the articles. They’re specific and aimed directly at the problems of that market. Use this exact approach as you develop your niche areas.

Beyond your own interests, look for niches where participants’ passions run high. You want people who are hard core and extreme — almost obsessed with the cause. The more they’re into it, the greater the chance you can connect with them.

Believers are totally focused on their causes or interests and couldn’t care less about people who don’t share their beliefs. Start making a list of the areas with which you personally identify. Label them as “high-passion” or “low-passion,” and pick two to four high-passion areas.

The next step is to determine if the interest area is big enough to develop. Will you stay local, or go regional or national in your focus? For example, if you’re targeting high-school band programs, there may be enough local business. If you’re targeting historical railroad enthusiasts, you’ll need to expand your reach. Fortunately, the ability to put up web pages and shopping carts to reach anyone on the Internet is much easier than ever before.

Determining the potential niche size can be easy or complicated. This is where your personal knowledge comes in. Search for “associations about,” “blogs about,” “forums about” and “membership sites about” your subject area. Are there magazines or newsletters being published about this interest? Look for local chapters, like the Sierra Club or Fire Fighters Association. You also can use the Facebook and LinkedIn searches to drill down deeply. Search for “groups about” and “people who like” your niche area. This can be effective if you want to sell directly to the consumer.

If you live in a good-sized town or near a college, you can go to their library reference section and get the Standard Rate and Data Service (SRDS) book, which lists all the magazines published in the United States and all the mailing lists available for rental, by interest. What makes this so powerful is the number of readers or people on the list for that interest area. You often can break it down geographically as well. The library also will have a similar directory for trade associations. The last time I checked, there were more than 25,000 business-based associations.

The real value of niching down is in understanding the various subgroups within the niche. For instance, if your interest is in fire fighting, the sub-niches might be wilderness fire fighting, hazardous materials, smoke jumpers and so on. The more you know about the niche, the more specialized your designs and graphics will be.

CREATING AN INTEREST NICHE
Apparel decorating is only a small part of the sale. You really begin to increase your revenue when you deliver a complete package. Decorators tend to focus only on decorating, but don’t stop there. Add promotional products to your inventory.

I’m not suggesting you become a general distributor. You want access to the virtually unlimited range of products that are complementary to decorated apparel. If you’re selling to a 5K-10K fun run, add water bottles, bib numbers, headbands, tech apparel, reflective vests and so on. You could even add banners, promotional window signage and flyers to the list.

The idea is to be the complete supplier that understands those clients’ interests and passions. What makes you special is giving them what they want. As you research niches, you’ll quickly learn facts and tips that none of your competitors will know. In fact, you’ll become so knowledgeable that you’ll be able to propose items that are so obvious they’ll become an impulse add to the order.

Finally, make doing business easy. Will your clients need the shirts folded and polybagged because it will be dusty and dirty at the event? Do you want to create a “goodie bag” for each participant with all the items in one place? Do the shirts need to be boxed by size and color for easy distribution?

Anything you can do to make it easy to order, pick up and distribute your products adds value that you can charge for. All of these little incremental items add up to big dollars. The beauty of making it easy to work with you is that many of the things that will set you apart from the competition will be of little to no cost. You’re selling a way of doing business.

Using your knowledge of the niche, you can tell your customers what other customers like them are buying. Amazon uses this technique with every sale. I buy a lot on Amazon and I actually appreciate the recommendations.

Another way you can differentiate yourself is by creating three tiers of products: good, better and best. The good is the low end of the market. Most people will pick the middle grade (better). The best grade usually costs twice as much as the better grade.

For example, the middle grade might be a 6.1-ounce, heavyweight cotton shirt priced at $4. The best grade might be a 4.8-ounce, 100% polyester moisture-wicking technical shirt. The client might purchase 80% of the better shirt and only 20% of the best grade. If your gross margin as a percentage of sales is the same for one of each, you’ll have picked up extra revenue with this approach.

DOMINATING YOUR NICHE
All of this is aimed at setting you up as the go-to source in your niche. You easily can dominate because you know the language and behavior of the niche, have researched what they’re buying and have made it easy to do business with you. Even with all of that, there are still several things you need to do to own the market.

The first is to get ahead of the game. This means determining when your customers will be buying. It may be a specific event date or seasonal purchasing. Whatever the timeframe, back up two months from the need date and start making your calls and contacts. Send an initial “heads-up” email a couple of weeks before you call. Get in early and lock out your competition.

Second, find the influencers and get close to them. This may be a frequent poster on social media or in a forum. It could be a legendary old-timer who has been around for 25 years or more. Every group has these recognized authorities or personalities. Reach out and ask for their help and advice to shape your program for the most value to the community.

By doing it this way, they’ll have ownership by contribution. The natural egos of these influencers will serve to promote you because they had a part in making this happen. It is a powerful approach, but you have to be careful not to ever let them down or make them look bad.

Finally, you need to discover where to be seen. You should be everywhere the people in your niche are. It may mean advertising on a blog or forum, or in a local newsletter. Take part in community discussions in forums and Facebook groups. The focus should be on contributing, not selling. You want to establish yourself as part of the community.

Finding and dominating a niche requires work and time, but it’s one of the most powerful things you can do to increase you business profitably and establish loyal, quality-driven clients.

Mark A. Coudray has been an active member of the Academy of Screen Printing and Digital Technology since 1989, and has written for Impressions since 1978. For more information or to contact Mark, email him at coudray@coudray.com.