Had to reject some potential business recently. We would done this type of work in the past, but now his request didn’t fit with our service offerings.
One of the major signs of business maturity is knowing and sticking to your knitting. Deciding exactly who you serve and who you don’t.
Which is a fundamental principle we hammer into our business clients.
For most, initially it’s counter intuitive. “There’s a big market out there, so why can’t I accept anything that comes in as long as I know I can deliver?”
The simple answer is competition.
Being a generalist means there’s no differentiation between you and every other Tom, Dick & Harry who puts a shingle out.
If you want to succeed, put a stake in the ground, carve out a narrow niche, and become known as the specialist/expert.
Most business owners when hearing this react adversely – mainly through fear. They think that niching down and narrowing the potential prospect list will mean there will be less business to be had.
The opposite is true.
Narrowing the market will allow you to target prospects specifically with a marketing message that resonates exactly with their pains, frustrations, hopes and desires.
You attract exactly the people you want while repelling the rest who aren’t a good fit.
In effect you’re qualifying out as much as qualifying in which will save you a lot of time by not having to deal with people who won’t be good prospects for your business.
So how do you go about narrowing down your market niche?
You don’t figure this out on a spreadsheet. You have to really get into the minds of your customers and realise what’s going on on a deeper level.
What’s the real problem they’re trying to solve? If you’ve been addressing symptoms, what’s the underlying disease?
More often than not, this will be an organic process.
As you map out who your best clients are and what you do for them, you’ll get insights.
Like financial planning clients of ours who realised their best clients already had plenty of money, but were worried about protecting their legacies. Which meant the focus moved from generating better returns (which was a given), to creating structures to protect their assets.
Or a construction company which realised their real niche was hospital refurbishment and the education sector. Having developed a real reputation here allowed them to grow significantly over the last few years.
Over Christmas Barbara and I spent considerable time analysing who our best clients were and who we made the biggest difference for.
We looked at demographics. Industry, size of organisation, location etc. But far more important were psychographics. The values and beliefs embodied by our successful clients.
From this we created an Ideal Client Profile which we now use to filter prospects. So even though we know we could help someone, if they don’t fit the profile, we don’t take them on. We’ve learnt the hard way what happens if you violate this principle.
I strongly recommend you do the work and figure out your ideal client profile. This is a link to ours you can use as an example.
And if you’re stuck and would like outside intervention to figure this out, we’re a phone call away.