In the competitive marketplace of the new millennium, the demand for specialized products or services will increase. If your site sells everything or to everyone, chances are that your audience will not perceive any greater value in shopping from you than anyone else.
The more generic you are, the greater your competition will be since you've placed your offering in the same ring as the Wal-Marts, Targets, and eBays of the world.
To borrow the fishing analogy, some people say that going after a larger market is casting a wider net. Not so. (The net is really your website.)
Rather, it's like fishing in a larger body of water where there are more fish, the fish are more spread out, and there are more competitors going after the same fish you are.
Unless you are trying to be another Wal-Mart, there's no point in competing with them. The sheer size of such big box Goliaths gives them a sizeable competitive advantage — particularly purchasing power, both in terms of products sold and advertising dollars.
In addition to being able to buy more ad space than small businesses can, they can buy their stock at considerable bulk discounts, ostensibly giving them the lower price-point advantage against which most small businesses cannot compete.
So how do you increase your sales in such a competitive, price-sensitive marketplace?
Before I give you some helpful ideas, let's talk about price for a moment. Price is never an issue. What's important is the value behind the price. Price only becomes an issue when your value proposition is the same as those of your competitors.
When you're trying to compete with the big guns and there's nothing different about you, the lowest common denominator will be the price. And if there's nothing else to compete with or compare to, naturally the cheapest alternative wins.
Here's an example: you walk to your local home furnishings store. You ask the sales clerk, “How much for that washer?” to which he responds, “$600.” “Wow! That's a lot of money,” you exclaim. “The price is way too high for me. I just cannot afford that.”
This is a typical knee-jerk response.
Moments later, you walk by a car dealership and notice that favorite new car you've been itching to buy for the last month and a half. You walk in. “It's $25,000,” says the salesperson. “Wow! That's great!” And you drive it off the lot that same day.
Now tell me, if you said you could not afford the $600 washer, then why could you afford the $25,000 car? Being able to afford something is not based on how much money you have but on how much money you're willing to spend. Big difference.
And how much money you're willing to spend is based on how much you want what is being sold, which in turn is based on how valuable the object of your desire is to you.
So, price is never an issue. Value always is.
Price is an arbitrary figure that merely represents the value of an offering. Affordability is often the result of both price and value matching up in the minds of the market.
In the case of the car, the perceived value matched or surpassed the price, which wasn't the case with the washer — i.e., the washer was too pricey based on its perceived value.
And perceived value is such a personal, subjective, and immeasurable thing.
Take the weather, for example. When you meet someone for the first time, the weather will likely be a topic of discussion. After all, the temperature is the same for everyone — 70 degrees is 70 degrees. But whether it's “hot” or “cold” is different for each person.
Similarly, price is a common currency to which most people can relate. That's why it's often the first thing people look for or want to talk about when considering a purchase.
The problem arises when price becomes the chief metric — and sometimes the only one — used because there's nothing to which one can compare your value. If there's nothing different about you, then price becomes a purchase criterion by default.
Of course, price is not the only metric, but it is the most common one. It's the lowest common denominator. Units of dollars make more sense than “units of value.”
But I digress. Here's the point I wanted to make…
The more unique you are, the less competition you will have. The less competition you have, the less substitutable you are. And the less substitutable you are, the less important price becomes. (In business schools, they call this price elasticity.)
Being unique or different doesn't mean to be better than your competition. And claiming that you're better than your competition doesn't make you any different, either.
Why? Because, if you try to copy your competition, or trying to promote your offering as one that's better than your competition, like it or not you're only reminding people of that which you are better than… your competition!
It's better to be different than it is different to be better.
So don't compete on price — unless price is your competitive advantage. Compete on value. And one way you can do that is to narrow your focus (i.e., your message, website, copy, product, offer, or audience) on a smaller niche.
A lot of people tend to appeal to large markets with multiple or generic offerings in an attempt to secure more sales. Sure, doing so will likely help you to stumble onto a few who will visit your site and respond. That's the age-old law of averages.
For instance, sales managers motivate their staff using the law of averages. They say that the more “no's” you get, the closer to your “yes” you will be. So the trick to making more sales is to keep finding more people to sell to. Makes logical sense, right?
But the law of averages is wrong. (Not the law itself but its application.)
Sure, if you ask more people (other than improving your conversion rate), you increase the likelihood of making more sales. But if you qualify your audience more and target better prospects for your offering, chances are you will get more “yes'es” than “no's.”
It's the same as your website. If you increase your hits, you will increase your sales. But that's not the problem. The problem with such an approach is the fact that you must generate a large quantity of hits in order to produce a certain result.
It is absolutely true that, if you want a lot of hits, you want your site to be in front of as many eyeballs as possible. But what about quality? Would it matter if your site generates an incredible quantity of uninterested visitors that will simply never buy from you?
To find more effective and cost-efficient ways of selling online, then attracting a higher quality stream of website visitors — interested, pre-qualified, genuinely interested visitors who are ready to buy — is definitely a better alternative.
Sure, where you advertise is part of it. But I'm also talking about targeting your market with your message — and how congruent your message is with them in the first place.
The more focused you are on your market, the more congruent you will be. And the more congruent you are with your market, the greater the value you will communicate.
Conversely, the more general or broad you are, the more you will need to paint your website with broad brushstrokes in order to appeal to everyone. In the end, the traffic you do generate will be just as general or broad.
Even if your product is a perfect fit for most visitors, if you attempt to target everyone only a small percentage of your market will see that fit and take action.
Additionally, even if your product has mass-market appeal, the broad nature of your offer and the generic image you project will likely convey your value is equal to that of others, and there's no added value in buying from you than in buying from others.
Out of the small handful of qualified prospects that hopefully hit your site, a large number of them — if not all of them — will likely leave due to your apparent lack of understanding of their specific needs, goals, and concerns.
In short, dilute your value and you will dilute your sales.
As a sidenote, let me clear up another big misconception.
Some marketers tout that niche marketing is all about targeting smaller, denser markets. Not necessarily. Sure, it is the most common form — it's the easiest and most effective one, too, for beginning marketers. But niche marketing is not limited to niche markets.
The word “niche marketing” means a hole in the marketplace that needs to be filled. That hole still can be filled by a product with mass-market appeal, but one offered, sold, and delivered in a unique way or with a unique twist.
In other words, you don't have to just go after narrow markets to be a niche marketer. You can narrow your message, your theme, your product's features, your offerings, the results you promise, or a combination of any of these.
By narrowing your focus considerably lessens the need to produce a sufficient quantity of visitors to produce similar results. Let me explain…
Offline, being everything to everyone is understandable to a certain degree since, geographically, you invariably reduce foot traffic to your retail store. Online, however, marketing to smaller niches can work since a market will expand and is easier to reach.
But it's a double-edged sword. The web may increase your target market, but it also increases the competition as a byproduct. Again, cast your net in a larger body of water, and the likelihood you won't be the only one fishing in it will be higher.
Offline, location is important. And a competitor next door can be your biggest headache. But online, thousands of competitors have instantly become your neighbors.
Thus, niche marketing is even more important online since, by narrowing your focus, you both increase your target market and decrease your competition!
Let's say that your best client is the corporate executive earning $50,000 annually or more, and your site receives approximately 10,000 hits per month.
If your site's message aims for the public at large, there will be only a small percentage of that ideal market that will hit your site. And an even smaller percentage will genuinely be qualified for, and interested in, your offering, too.
Let's say this percentage is 1%. That means that, out of 10,000 monthly visitors, only 100 will fit your perfect customer profile — and that's a very optimistic figure.
Since your site is too general or too vague, an even smaller percentage of those ideal prospects — say another 1% — will be truly interested in your offer and eventually buy. In this case, 1% of 100 qualified visitors would equal to one sale for an entire month.
Still following me so far?
Looking at it in reverse, it means that, if you want to achieve just one sale a month from this ideal market, your site will thus require at least 10,000 visitors monthly.
So based on the law of averages, to produce two sales you will need to double your traffic, and therefore double your advertising and marketing, to generate twice as many visitors — i.e., you need 20,000 visitors to make two sales, 30,000 for three, and so on.
In other words, you will need to multiply your marketing efforts exponentially in order to create a high enough quantity of traffic to yield acceptable results.
Now, take the example of another website dedicated exclusively to corporate executives earning over $50,000. However, this site receives a meager 1,000 visitors per month.
Admittedly, it's not a lot, especially when compared to the other. But in this case, the percentage of those 1,000 that fall into that site's target market will be 100% — that's around a hundred times better than the other.
Furthermore, the percentage of interested leads in a much better position to buy will be far higher by virtue of the fact that the site centers on their specific needs, goals, and concerns. The perceived value will be greater in the mind of those specific prospects.
To be conservative, let's say that this percentage is only 5%. It means that out of 1,000 visitors per month, one can achieve 50 sales — that's almost 50 times more sales!
But let's be a little more conservative for a moment. Let's say only 1% buys. It's still a remarkable improvement over the other, as 1% of 1,000 visitors equals to 10 sales per month — that’s almost 10 times more sales than the other with only a 10th of the traffic.
Of course, the above example is simplified and with all things considered are equal. I agree that there are many variables, here. And my math may be skewed a bit.
But the spirit of this illustration is clear.
By narrowing one's focus, it took an equal if not lesser investment of time, effort, and money to achieve as many as 10 times more sales than it did to achieve a single one.
Incidentally, when I first wrote this article a reader shared this interesting story with me that paralleled this example. It was from Jim Banks, who started selling carpets online in 1998. He admitted that, at the time, he knew nothing about it…
“I thought that it would be a non-competitive market (‘who would want to sell carpet online?' I asked myself) and it would allow me to learn about this whole new Internet thing.”
At first, Jim floundered…
“I showed carpet on the website, sent out samples, and used a wholesaler in Georgia to deliver the goods. I made some money, but it was a lot of hard work. In fact, a lot of hand-holding of customers was required, and my time was a limiting factor in how much money I could make.”
But then, Jim had an idea…
“I had read one or two of your articles at the time where you stressed the importance of niche marketing. And after thinking about that, and applying it to my industry, I came up with the idea of selling carpets and area rugs with children's designs (e.g., animals, letters, game boards, etc). Today, things are going very well!”
(That site, by the way, is KidCarpet.com. I'm not sure if Jim Banks still owns it, but the site still exists. And, since it does, I imagine is still doing relatively well, too.)
Obviously, you should first find a niche and fill it. If not, then narrow your focus to a specific outcome, audience, theme, offer, or product. Or to continue the earlier fishing analogy, if you want to fish in a bigger lake, bring a sonar with you.
By zooming in on your market, you will proportionately magnify your sales.