Article - How to Find Niches and Opportunities to Fight the Post-Recession Blues
READ: 5 mins
AUTHOR: Robert Craven
Here's a checklist to find niches and opportunities post-recession:
You can look at new customers and markets
You can look at developing or changing your product or service
You can do some combination of the two above.
Many of the examples are not from the agency world in order to show you how these ideas might apply elsewhere.
Checklist to find niches and opportunities
Neglected markets where, say, customer needs have outpaced provision e.g. hand-built cars like Morgan, importing organic wines, HR services (such as furlough calculations).
Unfilled need: e.g. work away from office creates a demand for laptop computers and better mobile phone technology, health and fitness for WFH staff.
Disadvantages in existing products g. caffeine in coffee leads to decaffeinated coffee, short life of cut flowers leads to demand for sachets containing long-life crystals for flower water, rented offices are expensive when home offices can now replace them.
Omission in otherwise well-served markets e.g. organic nappies, outdoor workers require robust mobile phones and laptops.
Extensions or new formats for proven lines e.g. T-shirts, scarves and sweatshirts for Rugby Supporters’ Club, Weight Watcher soups/Heinz, vegan/gluten-free food lines.
Technological breakthroughs e.g. email-driven mentoring and business support, special covers for reducing mobile phone radiation, cordless phone chargers.
Transferable success from other markets e.g. yo-yo from Hawaii, Tapas bar from Spain.
More economical ways of satisfying wants now being met expensively: temporary office accommodation, freelance/interim IT managers, FD on a rope (a day a month).
Less economical ways of satisfying wants that are being met only adequately: Ben & Jerry’s ice-cream, designer-tailored football boots, Versace laptops.
Copy substitutes: copy the competitive offerings e.g. Wild Oats copied theme pubs and made board games and newspapers available in the restaurant, local delicatessen starts sandwich round to maintain sales.
Do the opposite of traditional industry norms to emphasis the difference: Gerry Bentley adopted a ‘pen and ink’ approach to all communications in the face of database-driven communications that his competition were using; chef Andreas Honore serves all meals to the tables of his restaurant guests.
Change the product appeal and/or reinventing yourself e.g. Lucozade changes itself from being a sick person’s drink to being a healthy persons fitness drink, Viewfrom move from satisfying mass market to appeal to professional athletes, become a ‘personality’.
Change the use of the product e.g. isopropyl alcohol branded as video tape head cleaner and sold at ten times higher price; bicarbonate of soda packaged and branded as refrigerator cleaner.
Add complementary products or services e.g. Delis selling recipe books and dentists selling general and specialist toothbrushes.
How not to…!
Case Study – A Dutch PPC Agency saw that they were losing business to full-service agencies that could do a bit of everything quite well. They bought in creatives, PR, content and brand consultants and the business rapidly drove into a brick wall. The performance specialists didn’t get or understand the creatives and the offer became confused and messy as the agency had lost its purpose both in the eyes of the customer and in the eyes of most of the staff.
Case Study - NJ Filters (NY), manufacturer of air conditioning filters, turned over $11 million a year. The managing director saw an opportunity in a business advertising magazine to manufacture and install specialist waste filter systems to landfill sites in the Middle East.
This was far from core business; indeed it was a case of new product, new market. This strategy sustained heavy losses, as the firm was not able to accommodate the new demands made on it by the entry into new products/services.
Case Study - A California-based retail computer company that specialised in selling PCs to the home market attempted to sell very expensive mainframe computers to large corporate organisations. Within three months it was in the insolvency courts. They simply did not realise how different the new offering was from the old one. Because they were both computer-oriented offers they (incorrectly) assumed that the same skills would be required to sell them both, but the types of buyers and their needs were totally different, as were the features and benefits they sought.
In both instances, the diversifications sustained severe losses - the companies were simply not prepared for the demands of the new situation.
Diversification often looks like the sexy new option, the silver bullet we are all looking for. Just be careful. Do your research and do the numbers. Don’t just assume that it will work!