“Wow! The business is really taking off! God, Himself, couldn’t piece together a better operation! The sky is the freakin’ limit here, and I think it’s about time to capitalize on all of our insane success! Hmmm… I know what this store needs! We need to sell more kinds of stuff! Yea… That’s it! If we sell a wider assortment of stuff, we’ll make more money, and eventually take over the world!â€Â
WRONG!!!
Yea, things are going pretty good for the biz, but let’s not get crazy here. Obviously, your current operation is working pretty well at the moment, so why try and fix something that’s not broken?
If you want to capitalize on your business’s success, the last thing you want to do is start expanding your line of products or services into different categories. If you’re in the business of selling hamburgers, don’t try to expand by throwing washing machines on the menu (I know that’s a stretch, but you get my point). Remember, the strongest element of your growing empire is its brand. Therefore, you must never make any moves that will compromise or complicate your brand’s focus. A narrow-minded brand is a brand that has a greater chance for long-term success.
In a world where narrow-mindedness is frowned upon, let’s take a look at a list of narrow-minded businesses that have made their owners smile from ear to ear…
Starbucks – These bastards are responsible for raising coffee prices from a nickel all the way up to around 4 bucks a cup!
Motorola – Cell phones are now freakin’ fashion accessories thanks to these guys.
Marlboro – Who would’ve thought that cancer would be such a big seller?
Ikea – They are the KING of cheaply made, yet attractive, furniture.
Subway – That fat-ass, Jared, has turned the sub sandwich into a whole-wheat treadmill.
Oreck – Their vacuums truly suck. (Sorry, that was too easy)
How were these brands successfully narrow-minded? …They focused their company’s vision on only ONE type of product. It may be fun to sleep around with several kinds of products in your inventory, but true happiness comes from settling down with that one very special product.
If you want your business to control its industry, you will focus your brand on only one niche line of products. Here’s how to develop a narrow-minded brand that will dominate its product category…
1. Your company shouldn’t be a jack of all trades – It needs to be a one trick pony. When you narrow the focus of your brand, you will become the “Go-to business†for the product you specialize in.
2. If you are itching to expand your product selection so badly, then expand via variations of your specialized product. (Example: Make different kinds of lamps – Don’t sell lamps and then expand into the ceiling fan business.)
3. Buy enormous amounts of your product so you can get your costs down.
4. Sell enormous amounts of your products CHEAPLY so you can get your profits up.
5. Finally… Rock on and dominate your category so your brand can be known as the top dog of the industry!
The formula is quite simple, but the process in implementing it can be rough. If you want the process to be seamless, you’ll make sure to baby your brand in every conceivable way. Don’t let anything harm it. You must have the best specialized products, with the best service, and a trusted brand in order to pull this off. I have a feeling that you bizMAVERICKS can make it happen!
Wishing You Continued Success…
Yaro … great post. Every time I see a business go into different categories or expand it’s line of products that now target different consumers I smell fear and loss.
What makes a business do this? Either they are greedy or they’re close to going out of business.
“We sell everything”! …… I don’t need everything. I guess I’ll go to the guy who sells what I want.
Take doctors for example. If you need a cardiologist you won’t go to a physician who tells you that he is knowledgeable in heart disease.
Doctors are forced to choose their specialization and thus they do. Business owners are their own bosses and no one can tell them what to do, you know what I mean?
Companies get paid for excellence. This is the number one message that all companies, new and old, should take more seriously than they currently do. Peter Lynch called it di-worsification. Focus, and commitment to pushing value for your customers out better than anyone else is what you get paid for in the long run.
Hi Igor – thanks, but this is not my work, this is Brad’s post and he deserves your praise.
Hi Yaro, thanks for the article. Good to see SBB lively again with all these new posts.
I don’t agree with the point on pricing and stockholding.
Cheap is one option for building a brand, but if possible ‘expensive’ is a better way to go. Sell an experience rather then the product, and your margin will thank you.
If you’re selling low cost goods, obviously you need a very high turnover to make a decent profit (and have cash to expand). The risk as I see it, is that many small businesses are undercapitalised and have limited reach in terms of their potential sales. Taking the ‘cheap’ option may doom them to ‘limbo’ . ie not enough cash to move forward, but due to limited size of the immediate market they never achieve a high enough turnover to generate enough free cash for growth, marketing, and upkeep of their assets.
Meanwhile, they plow all their excess cash into additional and excessive inventory, pushing up storage costs, stock management costs (loss/spoilage), and reducing their liquidity.
I’ve also noticed that many SMEs that focus on ‘cheap’ end up including ‘sloppy’ as a sub text to their brand. Its something about the ‘cheap’ mentality that causes them to pinch pennies from the wrong areas within their business, degrading service, and ultimately the customer’s experience.
Cheers
Hugh
Gah, sorry! I just realised that Brad wrote this one.
Thanks Brad for your article 😀
I misread the comments. I gotta brush up on my reading skillz.
Hello Hugh!
(Haha! No worries about directing your comment at Yaro instead of me. He’s done a good job at branding himself here, and deserves to be the assumed writer by mistake every once in a while!)
Good points ya made my friend! Every one of your thoughts are right on the money. It would be incredibly difficult to get a startup business’s feet off the ground if they brought in too much inventory and then tried to sell it cheaply to a budding group of customers.
However, for the sake of this article, I’m speaking on how to create a MONSTER of a brand (I apologize for not being more clear on this). If you’re to be the most dominant brand within a product category, you must be the best at EVERYTHING – which includes pricing. So buying in bulk, and selling cheaply in bulk, is going to be the way to go if you are going to be your industry’s most popular brand.
Yes, I wrote an article that pertains to a company that already has experienced a significant amount of success – And yes, I realize that this is a blog about “Small Business Branding”… BUT, sometimes us small timers need to think like the big timers in order to satisfy our ultimate ambitions – WHICH IS TO BE A BIG TIMER!
Wishing You Continued Success…
-bizMAVERICK-
Yaro Starak
I mean…
-bizMAVERICK-
Brad Williamson
Brad this was interesting. It helps to look at branding from every conceivable viewpoint.
Hmm, I’ve read some of this — the post by Brad Williamson — before in a business book somewhere; However, I don’t have the name handy.
“If you’re to be the most dominant brand within a product category, you must be the best at EVERYTHING – which includes pricing. So buying in bulk, and selling cheaply in bulk, is going to be the way to go if you are going to be your industry’s most popular brand.” – Brad Williamson
Yeah, look at Costco, Sam’s Club, etc; somewhat different area of business but same type of business model.
Great article Brad! Staying narrowly focused not only makes you the go to company for your service/product, but, it also allows you to focus on making your product/service the best out there! This ensures continued success in your niche market.
It’s kind of the issue with Microsoft, they have all types of products and yet, their main product (Windows) still has MAJOR security issues!
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Hi Brad,
This post is great, and the comments stimulating. I’m a Canadian ESL teacher in Mexico City, and I’m in the middle of starting up my own English teaching company. Here’s what I’m wondering:
Do you think I’m going “too narrow” or maybe just getting the concept of narrow niches wrong, if I were to tell you that I wanted to only work with folks who were at an intermediate or advanced level of English?
I do my best work with people at these two levels. When I delve into the lower language level classes, I get bogged down, and feel like it’s just not….ME. I can do it…but it’s just doesn’t fit as well as the more advanced levels. Does this make sense?
Do you think I’m going too narrow? Got the concept totally wrong?
Hey Aaron! Thanks for the praise – I appreciate it!
Devil’s Advocate here… And please remember, I don’t completely understand your industry so my comments could be completely off base. I apologize if they are.
Your approach concerns me a just a little bit. I’m scared that you are going to hurt your brand a bit by turning away the beginning english speakers who need your services the most. These are people who could potentially provide you with lots of referrals. If they feel neglected, they will eventually get others to neglect YOU. The last thing you want to do is upset your word of mouth advertisers (Which is probably a valuable source of new client leads in your particular industry).
Can you hire someone to service the beginners? Can you develop a beginners course that new customers must take to prove their genuine interest in learning your one on one material? Surely the students who follow through with your beginner course would be more tolerable to teach to because they are obviously committed to learning the material.
Those might be stupid ideas, and I’m sorry if they are – but I really think you need to find a way to include that valuable segment of potential clients.
Wishing You Continued Success…
bizMAVERICK-
Brad Williamson