Many business owners and entrepreneurs are offering their products or services without a defined niche, which makes their job harder.
And if you don’t have a niche for your business, much less for your book.
In this article I will help you find a niche that will make your marketing easier, will help you grow your business, and more.
The Analogy of the Hedgehog for a Business Niche
In his book Good to Great, Jim Collins, talks about the concept of the Hedgehog in relation to businesses.
The origin of the concept is the Greek parable of the hedgehog and the fox, which shows that the winner is not always the biggest and strongest, but the one with a winning formula.
The story is about how the smart and agile fox decides to eat the hedgehog.
Day after day the fox uses his superior skills to sneak up on the hedgehog with the same result.
Just when it looks like the fox is going to get him, the hedgehog rolls up into a little ball with his needles pointing straight out.
It doesn’t matter how much better the fox is at everything else, it can’t beat the hedgehog in this contest.
It is with the hedgehog strategy that the small, less resourced company or individual can outperform the bigger competitor.
Jim Collins defines the hedgehog concept with three essential ingredients:
- A hedgehog must come from your passion, from something you want to give your energy to.
- A hedgehog must drive the Economic Engine. In other words, it must be able to produce significant profit consistently.
- A hedgehog must position you as the best in the world at what you do. This does not mean the “whole world.” It means being the best “in your world” as you define it. It can be an area of your city, a suburb or a niche market.
Your hedgehog is not a definition of who you are. It is about defining whom you serve and how well you serve them. Having a hedgehog requires a narrow definition of your customer base.
Some examples of good hedgehogs are:
- A realtor who sells only water front property
- An attorney who only represents women going through divorce
- A wealth manager who only works with clients with assets over $10 million in Manhattan
- A photographer who specializes in pets
Many business owners are afraid that narrowing their customer base like this is leaving money on the table. But defining a customer base that has the ability to drive your economic engine, is what makes the difference.
Most people are more concerned about losing what they do not have than about taking care of what is already in front of them.
If you are running a business that is trying to be everything to everyone then you have turned your business into a commodity.
In this case, all you have to differentiate yourself is price. And there will always be someone who can beat you on price. Think about WalMart!
A great hedgehog will make you different from everybody else. It will give a clear handle for your strategic partners to carry you around. It will get you above the noise and you will be known as the expert in something.
I’m sure you have gone to a networking meeting where people would introduce themselves like this: “Hello, I’m John, and I’m a realtor.” Then the next guy says, “Hi, I’m Tom, and I’m a realtor.”
After the meeting, nobody remembers them, because they don’t have a hedgehog. They are plain vanilla generic realtors.
I first learned about the hedgehog strategy while working as a business consultant with the Crankset Group in Denver.
One of my favorite stories is about a Crankset client who started applying the hedgehog strategy in his business.
Mark (not his real name) was a realtor with a passion for cars. He had an unforgettable introduction: “I sell garages with attached houses for people who love cars.”
Mark’s website displayed photos of multiple-bay garages with luxurious sports cars in them. And on one corner, a small link that says Click Here to See Attached Home.
As a result, Mark more than tripled his income and became a hugely successful business owner. And the secret was narrowing down his market in such a way that he eliminated 99% of his potential market as a realtor.
Here are some of the things that a great hedgehog will do for you:
Establish you as the expert — people in your niche will pick you over your competition every time.
Simplify your marketing efforts — you only have to market to your niche and not mass market and get drown in the noise.
Allow you to charge higher prices — because you are the expert, you can charge premium fees for your product or service.
So don’t wait any longer and become the expert in providing your product or service to a particular narrow type of client, or location.