March 16, 2021 by Michael Diez
The reason you don’t want to serve every kind of customer is that you’ll be competing on many fronts.
What strategy will you employ to make your business succeed?
Most likely you have the following strategy in mind: Undercut the competition by making a cheaper offer.
And if you were not thinking of using that strategy, but still choose to serve every kind of customer, then most likely you will be forced to use it sooner rather than later to keep your business afloat.
What you need to do instead is serve only the customers you can serve better than your competition.
If you are selling commodities, then it makes sense to sell in volumes to make a profit. For example, it’s hard to differentiate salt, sugar, and flour. So you have to undercut your competition.
If you position your business as a commodity, then you’ll have to sell in volumes to make a significant profit.
Here is an example: You own a luxury transportation business. Should you offer limos, charter buses, sedans, SUVs, and airport transfers, or should you focus on offering one of them?
In lieu of offering, say, the best Charter Bus service to corporate events, you will have to offer good-enough service to all types of customers, unless you have incredible leverage and resources to handle all fronts.
And guess what? For each of your good-enough offers, you have many competitors that can easily beat you by serving customers better.
So that means you only get the bottom-of-the-barrel customers, so to speak. You know the ones, the bargain hunters.
I hope I’ve convinced you that you need to narrow down on the kind of customer you will serve.
But most businesses don’t make any changes despite making this realization, after all, how are you going to pay bills while you figure out which niche to become the best in?
But that is exactly what you need to be thinking about, otherwise, in time, the compromises you’ll have to make to keep the business afloat become more and more costly, and not just monetarily, but also in health (physically and mentally).
But, you don’t have to figure it out alone. That’s why people like me are on a mission to help entrepreneurs keep their sanity and build successful businesses that serve our community well.
And given my penchant for technology, I have chosen to help entrepreneurs develop a digital strategy to help them accomplish their business objectives.