Talk about a Niche. We've had the wonderful pleasure of welcoming as an HRmarketer.com member a company called Strategic Designs for Learning (SDL). Strategic Designs For Learning assists organizations in assessing, aligning and developing talent. Specific capabilities include leadership development, executive coaching, team development, and succession - with particular expertise in working with family-owned businesses.
That's right - family-owned businesses.
Call me naive or uninformed but until Renée Montoya Lado, the very impressive founder of SDL educated me, I just assumed that most family owned businesses were small and local. I could not have been more wrong. Check out these statistics:
- According to the U.S. Bureau of the Census, approximately 90% of American businesses are family-owned or controlled and 60% of all publicly traded companies in the U.S. retain some level of family control.
- The greatest part of America's wealth lies with family-owned businesses. Ranging in size from two-person partnerships to Fortune 500 firms, these businesses account for half of the nation's employment and half of the GNP.
According to Renee, the family business model is unique because it incorporates three distinct and overlapping elements – the family, the ownership structure, and the business. And SDL has established a wonderful business helping family owned businesses with their talent management needs.
By definition, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. A niche market may be thought of as a narrowly defined group of potential customers.
But what I love about SDL's niche market of family owned businesses is it is quite large (atypical of most niche markets) and it is cross-industry. Family-owned businesses are equally large in just about every market segment from mining to software. This makes it relatively easy and cost-effective to target.
But what I really love about the niche is it has some pretty big entry barriers.
Very niche like.
Trust me, you can't just re-package your TM services for family-owned businesses and expect to be taken seriously. Serving this market is about experience, credibility, trust, relationships and expertise in understanding the very unique and challenging dynamics of a family owned business - something SDL is very, very good at.
Many leading talent management software firms do target various industry "niches" like food services, hospitality, retail, financial services, etc. But I would argue that the niche market (and I use the term loosely here) in these cases is the hourly worker and not so much a specific industry. True, this "niche" is also quite large and spans across many industries but the entry barriers are not that big so competition is ferocious.
Not very niche like. And not that unique.
Really great niche markets are small enough for you to dominate, but big enough to be highly profitable. Or, like in the case of SDL, unique and different enough for you to dominate and big enough to be highly profitable.
The lesson here is summed up by Jack Trout, author of Differentiate or Die:
"Why should a customer buy your company's product instead of the 10 or so other competitive choices? That's the question you should be answering. Build a [business/product] around that answer."
In other words, just be different. And then market the heck out of it. And don't stop.Labels: differentiation, niche marketing