Of all the small business marketing issues that I have spoken with colleagues and clients about, there is one that seems to come up regularly: do you market your company as having a specific specialty or do you talk about your products and services more broadly?
On one end, if you make it publicly known that you focus on a particular service or product you are likely to attract customers interested in that niche. The opposing argument is that by specializing, you may be limiting the potential of your business by “pigeonholing” it into what may just be one small aspect of it.
Specialization is about more than saying you choose a particular industry. If you own an Indian restaurant, specialization may mean that you only serve north Indian or Punjabi food. If you install home theaters, you may specialize in Sony or Panasonic systems. The point of specialization isn’t to just be working in a particular category, but to make a hard choice about what exact part of your industry you will focus on.
Getting it right can mean the difference between having the right positioning to help your business stand out, or the wrong positioning that dumps you into the sea of sameness with your competitors. So how do you get it right? Here are a few questions that can help you uncover the truth:
1. How hard is it to find your products or services?
Generally, if you offer products that are very hard to find, it may make sense to specialize further. If your business becomes synonymous with offering a specialty that is rarely found elsewhere, it can be easier to encourage word-of-mouth among your current customers and also to promote your business specifically to those seeking that rare type of product or service that you offer.
2. How many direct competitors do you really have?
If you are in the business of repairing luggage, for example, you might have several competitors in your area. But if you are the only licensed dealer in a 500-mile radius for a particular brand of luggage, you may not have any direct competitors in that space, meaning it may make sense to specialize.
3. Does one product or specialty account for the bulk of your profit?
When you look at your range of products or services, is there one that stands apart for being the most profitable? For many eye specialists, their most profitable patient procedure may be the Lasik operation, which is why you see so many of them focusing on promoting their services in that specialty.
4. How large is the potential market for a single specialization?
Predicting a future market for any product or service is not an easy task to get right. When it comes to specialization, however, you need to find a way to get the right amount of information so you can make a best estimate. You may have the only mechanics in town who can work on Rolls-Royce cars, but if hardly anyone in your location owns them it’s probably a bad idea to specialize.
Rohit Bhargava is the author of the best selling marketing book Personality Not Included, a guide on using personality to create a more human business that employees love to work for and customers can’t wait to buy from.