Editor’s Note: Over the next several issues, Snow Business
will look at several niche market types, examining the challenges, opportunities and service intricacies in each. We’ll delve into Level of Service and Scope of Work variables, including: start/completion times, labor, equipment, site size &
complexity, services needed, cycle time and marketing strategy. The lineup (subject to change):
- September – Parking Structures
- October – Medical
- December – Residential
- February – Retail
- April – Office
- June – HOA/Condos
- August – Industrial/Manufacturing
If your company currently excels in these market
areas and would be interested in contributing
to these stories, please email Editor in Chief
Cheryl Higley at firstname.lastname@example.org
or sign up to be a member of the Readership Panel here.
I’d like to start by saying thanks for a great Snow & Ice Symposium in Providence, RI. What a great city and surrounding area to visit. The hotel and convention center were terrific and so convenient to access. Bob Smart and the SIMA board, along with Martin Tirado and his SIMA team hit it out of the park! Everyone I encountered thought it ranked as one of our best conferences ever. As a speaker, exhibitor and contractor, my takeaways were great. Montreal, here we come!
Now onto an idea that I heard several times while networking at the Symposium: niche markets. What exactly is a niche market? Something small and specific? Something a provider specializes in? In our industry, a niche market is most easily understood as a submarket of a larger market, that is, the commercial market or residential market.
The commercial market has many niche or submarkets to it: corporate office, warehouse, retail, industrial distribution, municipal and so forth. And so does the residential market: single family homes, apartments, condos, urban and suburban and retirement communities.
Developing a niche in these markets is usually advantageous to small business owners. You’ve heard the old adage: “You can’t be everything to everybody.” It is not only necessary for small business, but it’s also strategic to break down a large mar-ket segment into niches to become more specific (and more attractive) to a group of prospects and buyers.
Nuances of niches
The first thing to understand about becoming a niche provider is that it’s about the customer, not your company! Niche snow and ice management professionals solve problems for their customers better than anyone else. They make the pain or the problem go away, which is how a niche provider defends and prospers in the space.
Developing a niche focus means learning what goes on in the segment down to the most finite details. This will get your company recognized by the players in that space and lead to a competitive advantage over other providers. Plus, market niches allow small companies to play a larger role when they identify market segments that they learn to master.
Master is a big word but needs to be your mind-set when taking on a niche. You’re looking for an edge, so your company must take on the attitude that you are mastering that space/segment to succeed. You have to focus on your target audience, and your actions have to reflect that focus.
Answering the phone and going to see what someone needs regardless of where they are and what services they want would be the opposite of a niche customer and a niche provider. If you remain focused on your target audience, it makes everything simpler for your company. The tools, expertise and, most importantly, the talent will get narrowed to a razor sharp focus, which will make it easy to say “no” to jobs that do not fit into your niche.
Developing a niche
Identifying a niche or target audience is simpler than one might think.
- Fulfill a need. Identify a need and then set out to become the fulfiller of that need at a higher level than anyone else in the marketplace.
- Look around. Often there is an example in your marketplace or in your trade associations where someone has already created a model you can study and gain insight from. This will help you determine the reality and risks of what is needed to succeed.
- Grow your customer base. Study your customers to understand the niche services you’re already offering (and may not realize) or markets you’re already servicing. If you look objectively at your customer base and apply the Pareto principle to it, you will likely find (and probably already know) that 20% of your customers produce 80% of the benefit your company enjoys. Most companies continue taking on more of the 80% type of customers that don’t provide a large return versus investing the focused effort to bring home more of the 20% crowd that does. To excel in a niche, you will have to change that thinking.
- Recognize your drive and passions. When we face challenges, a great deal of energy is required to persevere. People with great passion for something can become relentless in their pursuit of that passion, therefore making it difficult to slow them down or compete against them. So if you find a niche you are passionate about, it’s going to be hard for the competition to stop you from dominating that space.
Becoming a niche organization is a very deliberate practice. It requires great discipline to succeed. But if you are able to align your strengths and values with a niche you are passionate about, you can produce a winning formula and create a company and or brand that can dominate its market niche.
Mike Rorie has been a participant in the snowand ice industry for over three decades. He is now a supplier to the industry as the CEO of GIS Dynamics, parent company to Go iLawn and Go iPave. Contact him at email@example.com.
Selling requires customized approach and
understanding of the market segment
By Neal Glatt, CSP, ASM
Successfully selling to niche markets depends entirely on the ability of an organization to customize its approach to meet market demands. Although all sales revolve around discovering the pain, budget and decision-making process of a prospect, strategically selling to a specific niche will elevate the importance of these facts into a double-edged sword by which sales will be won or lost. Prospects within a niche market can be very particular in their buying decisions and winning sales is done by determining how to craft a message that resonates with them.
The best part of selling to niche markets is that most organizations within a niche will share many characteristics. The key is to perfect a process and then repeat it continuously. Creating a sales strategy requires considering a customer’s business to meet their needs. Start by asking questions in the three key areas of sales and the answers will help direct the necessary steps to selling in a niche market. Following are examples of the types of characteristics to consider:
In sales, a customer’s pain is anything that will cause a customer difficulty stemming from a product or service. Examples of pain can be found as a result of field operations. Does a lack of access to a site due to poor service cause a loss in revenue? Does the location need to get deliveries 24/7 because they can’t stock inventory and need to keep store shelves full? Is a re-turn visit midday required to clear parking spaces after residents head to work? Will a customer incur fines for not having municipal walks clear? Do complaint calls from tenants wake a property manager at all hours of the night?
Pain can just as easily be a result of administrative processes. Does receiving invoices late create disagreements with the finance department? Is a lack of credible weather verification making the approval process stressful or forcing disagreements with the contractor? Is a property manager receiving too many invoices creating an administrative nightmare?
The answers to these questions will be individualized to each niche market. For instance, convenience stores may need to worry about service in the middle of the night since they are open for business whereas apartment complexes may be more concerned about service in the middle of the day when lots are accessible. Sales presentations should only focus on the is-sues that are meaningful for the prospect.
The budget for a service is also going to vary from one niche to the next and should be considered when pursuing customers. Do customers prefer flat-rate contracts or per occurrence? How important is cash flow? Does the prospect need to be as frugal as possible or is snow plowing viewed as an investment in operations?
The budget considerations should also include the time investment needed to implement a solution. How much communication is preferred before, during and after a snow season? How many people need to work on the project simultaneously? What type of communication is required and what is the time requirement?
How a prospect will decide on a snow vendor not only varies greatly from niche to niche, but is also an often overlooked, yet critical, factor of the sales process. Is the prospect an owner who has unilateral decision-making ability? Is there a purchasing agent or department that is administering an RFP? Who must buy-in to the solution at various levels of the company to win the contract? Is there an association board or committee who must decide together?
In addition to determining who makes the decision, it is equally important to understand when and how the buying choice will be made. When will a decision be made? Is there a series of decision steps involved or will the decision be made at one time? Is the award going to be made on price? Are there specific prequalification requirements necessary to win the contract? Is it possible to present directly to the decision makers?
Developing the plan
Once the answers to all questions are gathered, the factors that appeal to a specific niche market will be more apparent. It is then possible to generate a sales plan and execute it with a prospect. Good sales plans are continuously tested and improved to increase effectiveness. Once a niche is understood, it becomes easier to repeat the process and establish a significant market share.
Neal Glatt, CSP, ASM, is account executive for Case Snow Management in North Attleboro, MA. Contact him at firstname.lastname@example.org.