In my last article I discussed the Rule of Three and how it appears to be playing out in the print industry. I mentioned that Sheth and Sisodia, the authors, had prescribed 8 strategies for niche players who comprise the remaining participants in an industry after an oligopoly has formed. I intended this article to be a review of those strategies. After reading back through that section of the book, I decided to blend them into a slightly more homogeneous grouping since there was considerable overlap in the way the authors describe them in their work.
Here, in bullet points are the important facets of good niche strategies:
- The number one rule is to design a product/service offering that is so unique that customers will have a hard time finding a competitive choice that compares well on a head-to-head basis.
- Having done that, it is likely you will have created an internal value chain that will be very difficult for your competition to copy.
- Stay true to the design of your offering. If an important customer needs something more, build it and let it stand alone. Be very careful about offering this to other customers. They probably don’t need it, won’t pay for it, and you will start to “muddy the waters” internally.
- Clearly define your target market. Don’t lose that focus and let your market definition start to blur. Remember, the alignment of your unique offering matched up to a clearly defined target market is critical. If you allow what the authors refer to as “segment creep” you run the risk of altering the tight alignment of unique offering aimed at a specific market. Once you “dumb it down” you are more easily copied and your strategy is at risk.
- Build the core fundamentals of relationship marketing – superior sales expertise and personal service – into your value chain. Great customer experience will demonstrate, again and again, the uniqueness of what you do.
- Constantly work to lower your break-even point. Avoid marginal capital investments. Be very careful in making “step function” cost increases that cramp margins and may not be supported by adequate sales growth.
- Remember, as a niche player, you are a specialist. One of the problems that continue to plague print company owners is the generalist mentality. They haven’t called it general commercial printing for nothing all these years. This mindset can prove disastrous in the niche world. Refer back to the number one rule above. This requires focus not normally found in the world of generalists.
This is pretty straight-forward, common sense stuff. One wonders why we don’t see more practitioners in our industry. The truth is…it’s a lot harder to implement these ideas than they appear on the surface. We need to dig a bit deeper into what strategy really is and what good strategy strives to achieve. We’ll start in my next article.