Don’t Forget Your Specialty: How To Avoid Obscurity and Price Wars
In the face of a declining business, it is easy for small business owners to start looking at new lines of business related to their core capabilities. It is no wonder that this reaction is instinctive. We watch large corporations growing by acquiring new businesses or rapidly expanding their workforces. Then, we look at the markets in which other small businesses thrive and think, “Me too.” However, as I have learned by experience, expanding capabilities into new areas without regard for maintaining your core business model is a fast track to commodity price competition.
A key way in which small businesses are better than their corporate counterparts is their ability to specialize. Most small businesses are natural specialists:
- Since they are often cash poor, they cannot market themselves broadly. Specialization allows a strategic marketing approach.
- Since they are often short on manpower, it is more feasible to optimize the capabilities of a small staff rather than hiring a large number of employees.
- Since they are “small” no one will believe them if they claim to do a large number of things well (even if it is true).
It is possible to add new services and even to move into new business ventures with an existing small business, but unless you maintain the distinctive nature of your business you will lose customers. Why?
- Your business doesn’t have the resources to develop effective marketing messages that underpin each of your offerings. As a result, you begin to look more and more like a commodity whose only differentiation is price.
- Your work quality will slip because you lose control by outsourcing or spread your employees (and your own) capabilities too far.
- You won’t be able to convince anyone of your expertise in the new area if your expertise and service in the old area slips. (And it probably will.)
If you feel pressure to expand or diversify your business, perhaps you should first focus in on what differentiates your business currently. What works? By focusing on that and sharpening focus your business may actually find a way to grow, even in a competitive market.
So how does this concept apply to your small business web site? Communicate your core business clearly. Find ways to demonstrate why what you do currently is worth buying. Don’t get lost in the clutter of new innovations. If you expand into new areas, use your existing expertise to provide credibility for your new venture.
Questions to consider:
- What is my most popular product or service?
- Why do people prefer me over the competition for this offering?
- Can I improve on this point of differentiation?
- Can I take this point of difference into a new market? It’s possible you can, but it is always a risk. Be sure of yourself before you leap and be ready to correct course.
Related Resources:
The need to harness our own potential worth product-wise and sales strategy-wise has been part of our introspection. Your perspective has strenghtened that resolve.