This is the part 2 of the 3-part series covering the topic of “How to Niche Down When You Have So Much to Offer.”
Just to recap, part 1 covered the “what” and “why” of niching your services down like fine dining restaurant menus. (embed the link.)
I purposely used the fine dining model as an example to convey my point of how a refined, high ticket item will allow you to create a highly profitable service business without burning yourself out while executing.
In part 2, it is going to be all about “how” to explore your niche that works.
With all the noise over on the internet, many are dismissing the fact that there are many, many highly profitable businesses that you would never hear or read about.
Not only are they so profitable that they don’t need to conduct any sales, marketing and advertising campaigns, they are content with the kind of freedom they have with their lives without losing their love for their work.
Sounds too good to be true?
Well, let me tell you about my acupuncture doctor as a real-life example. He is a multi-millionaire that you will never hear about (unless I tell you, of course.)
No fancy office.
No fancy sign outside. You’ll walk right pass it.
Occasional ads on one local super niche newspaper.
That is about it.
He’s been running his business all by himself (no staff) at the same location for nearly 20 years.
You must be wondering, “What does he do that is so different from any other acupuncturists that is so profitable?”
Plenty.
Aside from the obvious fact that he offers one service for a specific niche that he created by observing trends in the market, there are many other things he has done right.
Once again, this is a kind of a story that you’ll never read on Quartz or Inc. Never mind WSJ or NYT. As a long-time patient of his, I have asked him many questions over the years and gathered many insights. So, I am excited to be able to share the insider scoop on why his business is so successful.
Hey, I’m Maiko!
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What in the world is the Fine Art Painting Method?
Call me crazy, but I prefer not to explain concepts or framework without using analogies and examples.
Rest assured, I don’t come up with a method or a strategy just for the sake of creating them. My intention is for any of the things I share, is so that these concepts will stick in your mind longer, which helps you gain deeper understanding as to why these are important for your business.
So, what in the world is the “Fine Art Painting Method”?
It’s OK that you don’t paint. I haven’t painted for years. All I ask is for you to just bear with me for a couple of minutes.
Just imagine a painter painting on a canvas in his or her studio or even outside. Unless it’s a total abstract like Jackson Pollack-style, you will see him or her getting really close to the canvas while he or she paints. Then, he or she would take a few steps back to take a look at it as a whole and contemplate on what to do next.
This back and forth – a repetitive routine of getting closer to the work and stepping away from the work - is key to do the work of niching down the right way.
It is because when you are too close to something, you tend to lose the sight of why you are doing what you are doing to begin with. On the flip side, when you are just observing something from afar, you will miss details that are key to executing your strategy.
It is a balancing act that cannot be explained in one formula.
This method I use often was born out of my frustration towards the conventional business teaching:
They tell you to think linear. But nothing in life is linear.
So, you see the problem. Right?
You need to get really close to see your work at a granular level.
Now, you step further away from it & examine what you see as a whole.
Then you change the angle and find out whether that’s what you expected to see.
You may have to walk away from it for some days.
After that, you will get closer to it again to fine-tune your offering with newly gained insights.
Then you repeat, not necessarily in this particular order. Instead, whatever order the process calls for is what you follow.
Courtesy of The MET "Bridge Over A Pond of Water Lilies" by Claude Monet
Depending on an individual, this process can be a 2-month process. For some, this can be an 18-month process.
You might settle for one thing and implement & monitor for a duration of time, then realize it may need to be modified or scrapped altogether. This is normal & is NOT a linear process.
As I mentioned in my previous post (link here), I do all my graphics. While I do graphics work, I do exactly the same thing – I zoom in and out of the same image, at times, more than 20 times to get it right, especially when I do retouching work.
I decided to call it a Fine Art Painting Method because part 1 was all about fine dining. It was fitting just to keep the same theme of “fine” things as I would like you to consider the expertise you offer is a part of “fine” things to truly serve people and businesses that are needing your expertise to solve their challenges.
This is a mindset shift necessary to execute the niche-down effort. If you keep telling yourself that your offers are low-cost, affordable offers and that your prospects will not buy your highly curated, designed, and customized solutions, you are likely to fail at this attempt.
Now, we are getting down & dirty with the work required to make this happen for your business.
Are you ready?
The Niche Diagram
To kick it off, take a look at this Niche Diagram. This was part of my first signature workshop, “From Transactional to Transformational: 5 Step Formula for Up-leveling Your Business in 2018” that I created in 3.5 weeks while I ran my business.
There are 3 major components when you figure out what your highly targeted niche that works.
1. Your Expertise & Experience (that you provide to customers, not your qualification) that are irreplaceable and distinctive.
2. Prospects and Target Market.
3. Delivery Method that is designed to deliver the maximum results to your customers.
Your niche should be in the middle where all 3 circles overlap. (See the red-dotted circle.)
Everything outside of it explains what happens to your business that is far from ideal. Thus, you stay away from these areas.
For example, you may find an offer that is aligned with your expertise & experience and a demand is there from the prospects’ side, but if it lacks the right delivery method (as to how your offer is provided to your customers), this will become a source of unhappy customers.
Thus, you will experience a high churn rate or a high volume of refunds. (See the upper middle of the diagram.)
Recall any incident where you had an unhappy customer, then have a look at this diagram again. You will notice the reason it didn’t work out for your customer.
Maybe you took on a project that is not your expertise, yet you thought you could pull it off. Maybe it required a more “hands-on” delivery method, but you opted for something ‘quick.’
Get familiar with this diagram. What this diagram does is to help you take your emotions out of the equation. While you are assessing your existing and/or past offerings, you base your decisions on this diagram only as opposed to basing it on how you feel or think to avoid letting your “limiting beliefs” take over your brain.
Starting from Scratch
We are going to do step-by-step by using this diagram. This part, I am keeping it somewhat linear as a process.
We will start by assessing your expertise & experience. Then we move on to your target market, and lastly, we will cover your ideal delivery method.
Simple enough? Good.
Now let me bring back my acupuncture doctor. Remember him?
He was properly trained to be a medical doctor in China. After graduating from the prestigious medical school, he took on a job to join the UN, then he was sent off to somewhere in Africa.
A few years later, he decided to call the US home and started his acupuncture practice as he was also trained and certified to do so. First, he rented a small office in Chinatown in Manhattan. During that time, he spotted a trend that caught his eye.
He noticed there were some Japanese patients who were atopic (a skin condition that can lead to something like Eczema) and looking for a cortisone-free, steroid-free solution.
He had one - the solution he learned from his father who is now a retired medical doctor. He had the formula to create a few variations of skin creams that solve the problem.
Coupled with his acupuncture practice that can help relieve stress and hormone imbalance that cause this itchy, dry skin condition, he found a way to package his acupuncture service with supplemental cream and herbal medicine that no other acupuncturists were offering.
Majority of acupuncture enthusiasts seek help for pain management. Hence, most acupuncturists advertise their services to address pain issues.
Not him.
What is Your True Expertise & Experience?
Here is how to figure out your expertise & experience that are viable as a business by asking yourself some questions. You can also do this with your team.
Just to emphasize, “experience” here means a kind of experience you (and your team) are excellent at providing while you offer your expertise that, preferably, no competitors are providing. This has nothing to do with your so-called “work experience” or your qualification i.e. degree, certification, license and past employment history.
If you read part 1 of this series, you will recall what the fundamental difference between fine dining restaurants and diners aside from the quality of cuisine and prices. Yes, that’s experience.
What Don't You Shut Up About?
The answers to this question can give you clues as to which part of your generic business offers that you care most about.
For example, say, you run a content marketing agency. "Content marketing agency" is a massively broad description of services. Would you agree?
By looking at your past blog posts on your site, the topics you covered the most had something to do with how to plan a content/editorial calendar.
You realize this is something you have a strong opinion about. You post on Facebook about it, you tweet about something you didn’t agree on, etc.
You start to see a pattern. You don’t seem to be able to shut up about the process of content planning.
Now, you might be onto something.
How Do Others Describe You?
In my workshop, one of the assignments I give out has a statement with blanks that attendees need to fill out:
(Your business name) is the go-to company for providing (your transformational work)
for (who you serve) to help them achieve (expected outcomes.)
Start paying attention to how your customers describe you to another person. How would they introduce your business to someone?
In the case of my acupuncture doctor, he is known to be “the acupuncture doctor who cures skin allergies with a combination of acupuncture treatment, skin ointment, and herbal medicine.”
Are you worried about “pigeon-holing” your service to just one thing? Then you need to go back and read pt.1 of this series as this concern was extensively discussed.
Does my doctor care about being labeled as such? Not one bit.
He is a properly trained medical doctor who does not practice as an MD. He has an extensive knowledge about pain management through his acupuncture practice. He just does not advertise himself as such.
That is all.
Not to say that all his patients have skin conditions to be fixed. Some actually visit him for their pain because their friends and family with skin issues recommended him, “He is also great with pain management. Give him a try.”
He has also told me that he had treated people to lose weight and stop smoking that resulted in success. Yet, he rarely speaks about them.
You see. It is much easier to be known for one, clear offering. Once that is established, it is up to you to decide whether you stick with just one offer or you accept others based on criteria you set.
In his case, his session time does not change. If he is available, then he would take them on. But, if he has more pressing matters to prioritize his loyal patients with skin conditions, he may turn them down. His choice. He is in control.
When Are You in the “Flow”?
Time is a strange concept that all of us struggle one way or another. But, we all seem to agree that time passes extremely slow when we are doing something that we don’t particularly care to do like chores, waiting in line, filling out forms, etc.
On the other hand, we also all seem to agree that time passes extremely fast when we are having fun. Right?
So, the purpose of this question is to draw some clues out of you as to what makes you all jazzed up. What are the activities you do in your business that make you forget time?
Once you start writing them down, you realize how those activities come naturally to you. While you are doing them, you are less stressed, and you feel fulfilled.
Another thing to pay attention to while you go through this exercise is how others comment on these activities that you do effortlessly.
I bet they tell you something like,
“You are good at this!”
“I spend hours trying to do what you do, but you seem to just whip it up like no big deal!”
“It is so impressive what you produce & I enjoyed working with you. No amount of training would help me do what you do.”
These are all important clues. These are the indication that these activities are your superpower or your Zone of Genius.
If you want to learn more about getting into a “flow state” you can start with this FastCompany article.
What Part of What I Do that Drains Me?
This question is as important as the one above. You will not be able to narrow down your expertise and experience without shedding some light on what you don’t enjoy doing as part of your work.
There are 2 angles to think from:
1. What don’t you like about something that is currently part of your work,
2. What don’t you like about the industry you are in.
The second question can be immensely helpful where you may find an untapped opportunity to solve the very problem associated with the way you feel about the industry you are in.
For example, the legal industry has been slowly (very slowly) moving away from the norm of charging hourly rates to flat-fee rates. The frustration did not come from lawyers. They were just fine the way they were racking up their hours. But, many patrons voiced their dissatisfaction and decided to actively seek other options.
Sometimes, questioning and challenging the norm in your industry can open up a whole new door to create a brand new category in the market.
Who are Your Right Prospects & Target Market?
Now moving on to the other circle that sits side-by-side with your expertise and experience – Your prospects & target market.
Do you remember how my acupuncture doctor spotted a trend? He noticed most of the Japanese patients visiting his office were complaining about their skin condition. Right?
When he realized he had the perfect solution for them (=his expertise & experience), his market was pretty set – a bunch of Japanese transplants and expats in New York City much like myself. In just a few years, the word got spread around in the community that, nowadays, some travel from very far to see him.
Soon enough, the word got spread around even wider where American coworkers and neighbors of the existing Japanese patients start knocking on his door. The rest is history.
After exploring your expertise and experience that you enjoy providing to your customers, you are now able to take a close look at your existing and/or past customers from a different angle by dissecting the data based on what worked and what didn’t work.
List All Your Favorite Customers and Clients. Describe in Detail as to Why.
Deep-dive into your “why’s.” What were the key ingredients that made your working experience with them so special and extraordinary?
- Is it because your customers are on the same wavelength by sharing the same value and the same level of commitment?
- Is it because the results were measurable for you and your customers?
- Is it because they viewed you as an expert and took your advice wholeheartedly which lead to a huge success?
- Is it because they required less hand-holding?
- Is it because they were clear on what they needed help with?
Once the reasons are listed, identify common traits among them. Be as specific as you can about their commonalities. You are painting your picture at a granular level.
List All Your Customers and Clients You and Your Team Despised and Dreaded Dealing with.
In “Clients from Hell: 51 Ideas You Can Implement When Your Top Paying Clients are Ruining Your Life,” I shared 5 warning signs to identify unfit clients. The post was specifically written for service-based businesses owners. However, even if you are a product player, I recommend you check it out as most of those traits are universal.
- Is it because you had to chase down payments after they made you work to the pulps?
- Is it because you let scope creeps happen?
- Is it because your customers had unrealistic expectations and did not value your work?
- Is it because you took them on despite your lack of resource or expertise for the sake of cash flow?
- Is it because they acted as if they own you and your team as if your business was an extension of their business?
- Is it because their personality was less professional i.e. no clear direction, flip-flopping ideas, never shows up on time, no transparency, passive-aggressive, etc.?
Why did that happen? What are the common threads among these customers? You are building a persona based on these less-desirable customers to be excluded from your business ecosystem. The more granular you can get with their tendencies, the better.
Just as mentioned earlier on this post, repeat the process of stepping closer to what you are painting, then you step away from it to take a look.
Explore the Areas in the Market that You Have Not Leveraged.
While you were examining your expertise and experience, the last question may have made you think of industry-specific challenges and issues.
Now, you look at the current market you are in to see any of your success stories came from the customers that you don’t normally serve. It’s worth investigating from this angle because you might discover that you may not have taken advantage of a certain group of customers that could be a perfect match for what you offer.
Sounds a little cliché but if you try your best to “think outside the box,” you may be rewarded handsomely.
Now, Take a Few Steps Back & Look at Both Circles
Taking a closer look at the first 2 circles can be considered as a “discovery phase.” You dig deep with your why’s and find out gaps, trends, and patterns.
In order to move on to the next step which is to look at both circles together, you do need to take a few steps back.
Your goal here is to identify the overlapping of these 2 circles.
Get Rid of Everything that Isn't Aligned.
“Alignment” is where the overlap is. From the above diagram, you can see that anything outside of the overlap will not serve your business well.
At this point, you see what works and what doesn’t for your business. Now, it’s time to separate junk offers from the ones you want to keep.
Keep:
- What you and your team do flawlessly to solve a big enough problem.
- What is unique to your business and less competition.
- What is scalable and replicable.
As you may have noticed, you are now assessing whether what you are going to keep as options are “profitable.” Just because you enjoyed the work with particular customers does not automatically prove that it is viable as a business.
So, be mindful of taking a few steps back and look at what you painted so far to see whether any of them make sense as a business.
Look at What's Left & Start Slicing.
In my acupuncture doctor’s case, the process seemed quite simple. But, that is because he is not telling me the nitty-gritty of how his implementation process progressed nearly 20 years ago.
For this reason, let me emphasize not to be discouraged by how hard this part is to find your overlap. Instead, consider this to be your ongoing work to improve your business.
Sometimes, the answer can be right under your nose. I have experienced that many times over. This is why the Fine Art Painting Method comes in handy. When you feel your vision is blurred, it is because you are too close to what you are looking at. That is the cue for you to step away.
Here is what the doctor’s case looks like:
It is your turn to see how the diagram looks like by slicing what you have in different ways. Here are some examples:
Slice by Business Size. (From major corporations down to an individual.)
Slice by Vision and Value. (A boot camp style, done-for-you/white-grove, convenience, etc.)
Slice by Industry. (Construction, medical device, tech startups, education, government, etc.)
Slice by a Specific Problem. (Restructuring, system change, relocation, disability, divorce, etc.)
Slice by a Platform. (WordPress, Salesforce, LMS, SAP, Xero, InfusionSoft, etc.)
Slice by Age, Culture, Status/Lifestyle, Geographic, Personality Types (Widowed Seniors, Single Mom, Spiritual, Introvert, Islanders, etc.)
You may not have to choose one; it may be a combination of a few. The point is to narrow down as much as possible to accentuate your solution to a unique problem.
Find Out the Perfect Delivery Method
There is something my acupuncture doctor did that no other competitors were doing back in the day, and this involves how he delivers his service.
After about a year or so operating out of a small office in Chinatown, he moved his office.
To where?
Simple. He moved to where many Japanese transplants and expats worked – midtown Manhattan.
Nowadays, it may not be a big deal but back then, it was. No practitioners were moving out of Chinatown because they were serving Chinatown goers seeking eastern medicine.
The move puzzled many in his community as you can imagine. But, he followed his strategy regardless.
Once he decided he was not going to serve Chinatown goers (or residents), he moved closer to where ‘his people’ were at. He is at the same midtown location for years.
He no longer needed to compete with other acupuncturists for the same group of patients. He only needed to focus on making his target market easier to access his office in midtown. It is also near 2 major train stations – Penn Station and Grand Central where many commutes from Long Island, NJ, and Westchester. It is THE HUB for his target market.
Delivery method matters.
Keep in mind that “delivery method” does not just pertain to physical locations. This is just an example.
Here are some other factors you should consider:
1. Can this be packaged as a program where everyone follows? (Can this be “productized”?)
2. Is this done in-person? Can this be done remotely?
3. Are you able to specify a timeline and prospects need to honor it i.e. minimum 3-months commitment?
4. Does this require on-site visits?
5. Is this a mix of some of the above?
Key to spot the right method of delivery is to focus on how your customers can get the maximum results from what you offer, not what you prefer to do. The promise of a niched-down offer is that “it works.” If you are unable to figure out the best delivery method to make this happen, your chance of succeeding at this will be severely minimized.
Granted, you want to be sure that your offer evolves around your expertise. But, remember this is a balancing act. Be sure to focus on a delivery method that guarantees the best results.
From there, you test and tweak continuously by reviewing all 3 circles, the entire diagram, to be sure you are not derailing from your original goal of finding your niche.
Not to sound like a broken record, but just to recap the importance of a repetitive routine of getting closer to the work and stepping away from the work, the Fine Art Painting method.
Feel free to reach out with questions you have about this process as you may find the third-party point of view valuable to ruthlessly narrow down your niche. Often times, “hesitation” and “resistance” get in your way of pursuing this effort. The only way to get around that would be to get support from others who understand the process.
In part 3, we will discuss how to “de-risk” your niched-down offer.
You can count on me for bringing back the story of my acupuncture doctor as I’m not done with it. I have not told him this personally, but what he has done with his business without taking any business courses is remarkable, to say the least. There are a few more things I want to share what he did to “de-risk” his business. So, stay tuned!