Ramp Up Your Business by Specializing

Nora Dunn — Thu, 10 Sep 2009 17:00:02 +0000

As an entrepreneur, you would think that precluding certain types of customers in favor of a smaller – but specialized – market would be akin to shooting yourself in the foot. But interestingly, one of the best ways to ramp up your business and create a solid reputation that will ensure a constant flow of customers knocking on your door is – indeed – by specializing.

You sell widgets. These are widgets that just about anybody can use. But you also know that depending on how your widgets are used, they can be especially useful for, let’s say, alpaca farmers (who we’ll say for argument’s sake, are not terribly uncommon in your area).

These alpaca farmers are a pretty tight knit bunch of people. They have a strong Alpaca Farmer’s Association with a quarterly magazine. This group also meets bi-monthly to share ideas and business practices, have some good fellowship, and hear guest speakers talk about issues relevant to their industry.

Without Specialization, you could hit the streets and sell a thousand widgets to a thousand passers-by, as long as you put your time in, shaking trees and pounding the pavement. But after you sell those thousand widgets, most of your customers aren’t feeling particularly loyal to you, since they don’t feel you actually understand their needs; you just happened to be selling them something they needed at the time.

So for all the time you spent peddling your thousand widgets, your repeat customers and referrals will be minimal. Hence, selling your next thousand widgets will take almost as much time. And now you have a job where you are trading your time for money. If you have specialization, you can create a business that provides you with at least a little bit of passive income by virtue of all the time and effort you invested.

Specialization Step One: Get Involved and Do Your Research

Instead of peddling your widgets on street corners over and over again to anonymous faces, you decide to specialize. You have a unique angle for how alpaca farmers can use your widgets effectively, and so you decide to focus on them as a target market.

You join the Alpaca Farmers Association as a non-industry member.
You attend their meetings.
You read their magazine – with interest – from cover to cover.
In networking with alpaca farmers and reading their publications, you start to get a sense for what is important to this group of people.
And when somebody asks you what you do, your “elevator speech” is a well-rehearsed pitch about how you provide widgets to alpaca farmers who need them to do “x”. Even if your conversation partner is not an alpaca farmer (and even a potential customer themselves), you say this. Why? Because they might know an alpaca farmer, and if they think you’re a stand-up sort of person, they’ll be providing a referral, pronto. They may even ask you if you would bend the rules and sell them a widget too (even though they’re not an alpaca farmer) – which of course you will.

Specialization Part Two: Become an Advocate and Ambassador

Because you are genuinely interested in alpaca farmers and their needs, you learn that a new regulation has come down the pipe that will restrict their ability to do business effectively. As somebody who has a finger on the pulse of the industry along with a bit of perspective, you decide to write your local member of parliament/council in an attempt to advocate for the alpaca farmers. You may even decide to copy a few of your alpaca farmer prospects or the association leader to show them how much you care about them. You’re not asking for their business – they know what you do by now – you’re just showing them that you are supportive of this group and are with them for the long haul. (It must be noted at this juncture that these actions must be genuine in nature, which means you will have developed a real connection and interest in alpaca farmers; otherwise you could come off as a schmarmy salesperson and get the cold shoulder).

You also gain an opportunity to speak at their association meeting. This is a terrific chance to communicate your message to a lot of people in your target market at one time. You’ll obviously discuss widgets, but you’ll also do it in a greater context that provides additional value to the members. They will see that you actually understand them as a market and people, and their trust in you will continue to build.

Your next step is to write articles for the association magazine. Again widgets can be mentioned in your articles, but the objective is not so much advertising as it is providing useful information. The business will start to flow by virtue of you simply being visible to this market.

Specialization Part Three: Get Business, Referrals, and Continue to Specialize

By now, alpaca farmers have accepted you as a genuinely interested member of their community. You (and they) realize that you can provide them with so much more than widgets, and in return, they will give you their loyalty and repeat business as personal customers – and eventually, friends.

They’re also probably going to refer you to other colleagues of theirs – some of whom will know you from your association activities, and others who will not. Almost all of them will immediately become customers. Why? Because you are the ultimate go-to person for widgets for alpaca farmers. You understand them. They would be crazy not to buy from you.

In so doing, they will also likely see the wider applications of your widgets, and will refer you to their family and friends who are not in the alpaca farming business. You will accept this business – despite your specialization – because these referrals will probably be just as loyal and valuable to your business as the alpaca farmers themselves. Why? Because they sold your product for you, since you are just so darn good at representing the needs of their special little (largely ignored) group of people.

Other Examples of Specialization in Action

I have a travel blog, and like many other travelers who have blogs, I am not entirely proficient at the finer points of running or monetizing it. I get numerous offers from SEO and marketing companies who are offering website services, and I discard most of these offers as quickly as I receive them. Why? Because although I understand that my travel blog doesn’t involve rocket science to make it better, I also don’t believe the people sending these anonymous form-letters truly understand what I need. Bollocks? Yes, probably; any web-related service could do a stand-up job for me. But I don’t know that, and don’t have anybody I trust enough to give them a shot.

That is, until a prominent travel blogger in the industry kicks out an e-book about how to make money with your travel blog. This is a specific product (an e-book) that answers a specific request (make my website better!) from a targeted group of people (travel bloggers). I (and just about everybody else who wants to make money with their travel blog – which is just about every travel blogger out there) see value and buy a copy of the book.

Could this book be applicable to other genres of Web Sites and blogs? Absolutely. But because this author specialized, he gained the trust of travel bloggers (he had already been working on this area of specialization and had the trust of many), and has become a continued go-to resource for them. And word of mouth in the travel blogging industry (as with many industries) is not to be underestimated.

When I was a Certified Financial Planner, I specialized too; I worked with business owners and managers in the plumbing and sheet metal industry. It seemed like an odd market to pursue at the outset, but as I continued to network with these people and be visible at association meetings as the speaker or attendee; as I wrote articles for their quarterly magazine; and as I attended the Christmas party of a client of mine only to be seen (yet again) by some of their sheet metal colleagues at the same party, the referrals poured in.

And business branched beyond my plumbing and sheet metal clients, as it does. I always believed in family participation when it comes to financial planning, and I received referrals to many branches of large families related to somebody in my target market. Eventually I didn’t have to go looking for new clients; they came to me.

Specialized Parting Words

Don’t be afraid. You won’t push away other business (at least not as much as you think) by virtue of focusing on a small target market. Instead you will be perceived as desirable, special, and may be pursued even more for business – even by people who aren’t in your area of specialization. And within your specialized market…you will dominate.

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: