Does your business feel like it has stalled? Has it plateaued? Or flatlined?
If you and I sell exactly the same thing in exactly the same way, the only way we can compete for our customers’ business is on price. Whoever wins that competition ultimately loses. We get locked into a race to the bottom which is one race you definitely don’t want to win.
Seth Godin said ‘cheaper is the last refuge of the marketer unable to invent a better product and tell a better story’. Cheaper is a club with only one member. Anybody can make sales as the cheapest in the market but nobody can make profit as the cheapest in the market. I would recommend you don’t go there.
The intellectual challenge is how we position ourselves so that we can sell what we sell at a level that is economically beneficial for both us and our customer at the volumes we need. If the key concept in real estate is location, location, location, in business it is differentiation, differentiation, differentiation.
When we create a niche, we are creating a place where there is no price competition. This is the answer to the intellectual challenge above. When we create a niche we have created a space where our offering is unique, differentiated and therefore not constantly under price pressure. For a niche to exist our value proposition must be not only unique but aligned to our core customer in such a way that our competitor’s value proposition isn’t. It is not enough to be unique, we must be uniquely appealing and in some way uniquely better.
Failure to create a niche not only means that we will be competing on price, but we will also become a ‘me too’ business. A ‘me too’ business is a precarious position to hold. One of the most obvious common factors of many of the businesses that failed to survive the dramatic conditions of the last few years is that so many of them had already lost their unique position in the market and the mind of the customers.
If you cannot put clear blue water between you, your offering and the people that also operate in your marketplace, you will feel the pressure of price.
If you are already feeling price pressure what can you do to invent a better product and tell a better story?
This reason may or may not apply to you. It is one of the 10 most frequent reasons businesses seem to stall or flatline. I will be dealing with this and the other 9 reasons in my next seminar. Click here for details. Or Click here for details on the other 9 possible causes.