As a marketer, when I ask someone at a Virginia company who their target customer is, there’s a right answer and a wrong answer.
The right answer is a bit surprising for many businesspeople, so I’ll get to it in a minute.
But the wrong answer is easy and all too common. “Who’s our target customer? Everybody!”
If that’s your answer, then I’m sorry, but that’s incorrect. Thanks for playing. We have some lovely parting gifts waiting for you offstage.
Sell to everybody, sell to nobody
There are mass market products out there that do in fact sell to everybody from 12-year-old online gamers to twentysomething homebrewers with long beards to soccer moms, empty nesters and grandpas with walkers. Microsoft comes to mind, as does McDonald’s or Toyota. These brands seem to be doing just fine. And they’re all super famous, so if you want to make it big, why not just copy the big boys?
The obvious answer is that it took a long time for those companies to get big. Plenty of competitors that tried the same business failed along the way. And now that each of these companies dominates its product category, each has to fight off smaller competitors night and day to stay king of the hill.
Such mature businesses are no longer about rapid growth and innovation. They’re about steady growth at best, but always with the looming threat of decline.
Meanwhile, smaller companies that try to copy the success of Microsoft or Toyota by serving everybody find that while the rewards are potentially big, the competition is usually bigger. Most small or mid-size companies that try to serve a general audience wind up in a weak position. There’s nothing special about their products or services, because they don’t want to scare anybody off. So, their offering becomes just another commodity that’s sold primarily on price.
And with plenty of competitors doing the same thing, buyers have lots of choice, which will push prices down, making margins low. In the end, the only way to succeed by selling to everybody is through high volume. And if that’s your goal, then I say good luck with that.
Focusing on a niche is scary but can be profitable
What would happen if you decided to turn some customers away?
In fact, that’s the right answer when it comes to marketing: focus on a niche market.
Don’t try to sell to everybody. Instead, find somebody (with money to buy, of course) who’s not being well served by what’s out there now. Then, come up with a product or service that will give that person something better.
Yesterday, I had the chance to see how one Virginia company puts strategic specialization into action. Cadence is a maker of very sharp and precise blades and cutting tools, located in the business park at the edge of the town where I live and serve on the city council, Staunton. The company has thrived over the last thirty years in a global manufacturing market dominated by low-cost producers not by trying to sell blades to everybody and to do it cheaper than the competition, but instead, by serving a fairly narrow market and trying to it better than anyone else.
Cadence is a case study in serving a niche market. Surgeons and anybody else who needs to make their cutting precise demand blades that are not just sharp but also strong. A surgeon doesn’t want her blade to break in the middle of a heart or brain operation or to shed little pieces of metal anywhere inside a patient. Cadence is one of the few makers that can fill the need for blades that are precisely made down to a very small measurement.
The company’s founder, Martin F. Lightsey, went into to business for himself just to serve this need:
During his 16 years as an Engineer and Director for American Safety Razor in Staunton, he saw the increasing need industries
The dairy barn gives the story a small town Virginia flavor, but Lightsey’s history is the same iconic garage-to-riches tale that every American entrepreneur dreams of. Today, still based in Staunton, the company employs 500 people in six locations from Massachusetts and Pennsylvania to the Dominican Republic.
Blades R Us? Not quite
The original name of Lightsey’s company made his strategy crystal clear right from the outset: Specialty Blades. Not “General Blades” or “Universal Blades” or “Blades for All.” Lightsey obviously was ready to turn away some customers from the very beginning. But that was OK, because those customers were already served by products on the market. Lightsey’s company had another purpose — to serve customers who needed something more, well, specialized.
Before I got to tour the company’s plant yesterday along with other Staunton officials and teachers from local schools teaching science and math, our group got to hear from the company’s VP of Engineering, Mike Bond. He read us the statement that Cadence puts at the bottom of its news releases. As a marketing writer, I noticed how the tone varied from the usual boilerplate of a publicly traded company and I offer it here as an example to other Virginia businesses of an inspiring company description written in plain English:
Cadence imagines things others cannot, builds things others will not and delivers outcomes that simply make the world work better. We bring together people and solutions in ways no other company can. Hand to hand with our customers, employees, and shareholders, we are inventing new things using science and innovation to make an impact that matters.
Imagining what others cannot and building what they will not — that’s the very definition of focus in business. And if a company can stick to that approach in its marketing then that company can earn itself an enviable position as the only provider or at least the go-to supplier for a market that may not be broad but certainly is deep.
And true to the strategy of specializing, Cadence’s corporate promotional video doesn’t just talk about what they do — it also talks about what they don’t do and who they don’t serve.
In markets where it has valid competition, I don’t know if Cadence can command premium prices for its products. But in general, if your company is known as the only or the best supplier in a market, then you have much more control over your pricing. And that means you don’t have to settle for being squeezed selling a commodity item in a race to the bottom with your competitors. Instead, if you do something special and rare, you can focus on quality and innovation. And the customers will pay what you ask — gladly — because you deliver high value.
And isn’t delivering value and doing something that truly helps people the reason why we all went into business in the first place?
— Erik Curren, Curren Media Group