If you follow what we do at all, you may know that we specialise in helping people conceptualise and create products and services that’ll help you beat your competition- or even better make your former competition entirely irrelevant.
And what most experts would recommend hands down to achieve this goal would be the specialisation route.
Because if you were choosing between a company that dabbles in a few things- including the thing you actually want, and a company that specialises in the thing you want…well… you’d no doubt have to choose the latter all else being equal. Unless the dabblers could present you with a significant cost saving, making going with them more worthwhile.
While we don’t disagree with this logic, we also believe that there’s a time and place to be more broad and diversified, and doing so could help you to get an edge. And in some cases, if you don’t, beating your competition could be very difficult indeed.
On the flip side, when talking to business owners, we find many of them have taken their businesses down the diversified route.
Sometimes they started like this from the beginning, and other times they may have started off more narrow, but diversified by adding complimentary services over time.
Why? Because intuitively it feels like the right thing to do.
Narrowing down your services can feel scary, like you’re gonna have less potential customers out there to buy from you, and feel you may miss out on more opportunities.
So what we’d like to do is go through the reasons why you may miss out on MORE opportunities by not narrowing things down, before completely contradicting ourselves and revealing when it may actually help you NOT to do so.
HOW IS IT POSSIBLE FOR BUSINESS TO INCREASE WHILST THE SIZE OF MY MARKET DECREASES?
Because you’ll be able to charge more, win more business, and spend less time and money doing so. Here’s how:
Picture this: you’re at one of those business networking mixer event things. There’s a range of people there from all different types of businesses. Let’s go with 50 of them.
Let’s compare the different experiences you’ll have being there representing a broad diversified business vs your competitor that has a narrow specialised business.
Factor 1: marketing activities & message depth.
Specialised: You’ve assessed the guest list, and identified 5 people to speak to who you’ve identified need your services. You’re super specialised so are able to identify they have the problem you solve with a bit of quick Google scanning. You go along to the event, and spend 10mins with each of them. They understand what you do, and know you’d be able to help them. All they need to know is the in-depth specifics. You go home after that. Or heck- even go to another event after.
Generalised: You look over the guest list, and are only able to rule out 10 people who most likely won’t need your services. The rest are all possibles, with each possibly needing a few of your services. You go to the event and spend a few minutes with each, discussing a range of services. Your message depth with each is shallow, and they are left still wondering whether or not you’d actually be able to help them.
Factor 2: time to decision
Specialised: You set up meetings with each of the 5 potentials, and discuss the specifics & whether or not you’re gonna work together. You hand them a pre made proposal- which you’re able to do because you only deal with one problem, which has the same process to follow to fix no matter the business. You call them a week later to confirm the sale.
Generalised: You set up meetings with half those you spoke with (the other half didn’t see a good enough reason to). At the meetings with the others, you inquire into their situation, and attempt to find problems you could fix that correspond to services that you offer. You then go away, and craft custom proposals for each. You then follow them up, and possibly speak further to clarify things and answer any questions, before a decision is made.
Factor 3: Deals won
Specialised: In the match up between your proposals, and those of your competitors, you’ll come out on top because your services fit the clients situation to a T. Except for one because the competitor while not a perfect fit was significantly cheaper. You wouldn’t make much off it anyway.
Generalised: Lots of the proposals don’t fit exactly, or have been done off the cuff without knowing what has worked before- and don’t make it through. A few don’t match up well in a comparison with the specialised competitor, and a few make it through. They have played the ‘numbers game’ and got the same amount through as the specialised company.
So that’s just a snippet of why it works; because you’ll have to work much harder for the same sales figures if you’re more generalised in what you do.
There are a few other advantages of being specialised such as more referrals and word of mouth as your message is simpler (and easier to pass along), and you come up top of mind when someone asks who do you know who does ‘x’?
Being specialised will not work however if your niche is too small, and there’s not enough demand for your services to make a viable business out of it.
CAN I BE SPECIALISED WITHOUT HAVING TO NICHE DOWN AND MAKE MY MARKET SIZE SMALLER?
Absolutely- But only if you stick to one idea. No Frankenstein ideas like I make Tomato AND Barbeque sauce. Together!!!!!
Take for instance water. Nearly everyone drinks it right? But if you have to explain what it is (relative to other drinks) it’s still one idea of ‘the flavourless drink’.
The key to keeping your market broad while you keep your message and idea on point is to think of what one need lots of groups may share may be.
You may have the health conscious crowd drinking water for its non caloric properties that come with a flavourless drink, the foodies for its palette cleansing properties, and your everyday thirsty person just cause it’s there.
I’M WORRIED I’LL BE BORED ONLY STICKING TO ONE THING. ANYWAY AROUND THIS?
The way around this is to either blend all your interests together into one idea (if you can do so), applying your business expertise to a range of different problems or industry sectors, or finding an untouched large space with lots of varied things to do inside of it.
An untouched space is an area yet to be explored- and often is what we think of when we hear about new never before seen innovations. Specialisation is just a relative term. The first car makers would have had the option of working on a range of different vehicle types had they wanted to; such as trucks, race cars, tanks and so on, because there was nothing to compare them to, they were all just ‘cars’. Now that the industry and market has matured, the market has broken up into smaller specialised niche markets.
I’M WANTING TO HEDGE MY BETS IN CASE THE MARKET OR ECONOMY CHANGES. WHAT DO I DO HERE?
You can have different products and services, just keep each idea separate on the surface and treat as separate businesses. One idea=One business.
Also consider whether you have the time and money to do more than one properly.
As you can see, there’s many many many good reasons for you to specialise your business. But to keep the whole balanced, unbiased journalism thing going, we must point out one very good reason to generalise- to give you an understanding of your business space that you wouldn’t get from being a specialist.
Generalising gives you more exposure to different things, and in doing so you may start to see connections and patterns between different parts- or entirely unrelated things. It’s this knowledge that will help you to create a great specialism.
This goes doubly if you’re generalising in areas that aren’t typically related- like being both an artist and a physicist.
It will give you a unique point of view. And if you can apply your unique point of view commercially, then you’ll have specialist knowledge that no one else has. So you’ll from day one be the leader in your field, and instantly be the top expert.
And generalising also helps you to know yourself better by helping you figure out what your strengths and preferences are. Because when it comes time to choose a lane, I’m sure we want the certainty of knowing it suits our sweet spot between what we’re good at and what we love.
And lastly, generalising within your own industry space helps you understand your market, and how all the pieces fit together- which will help you to understand your place in it, your customers, and be able to make better recommendations to customers based on a well informed perspective.
All in all, we believe is that it’s not a matter of if you specialise-but when. Generalise until you have gained unique experiences that you can use to create a great specialty, and understand your market, customers, and who you want to be- then specialise.