how to find your niche in your local market and why you need one to be great

Powering Growth Online for Local Businesses

http://www.PME360.com

How to Find Your Niche in Your Local Market and Why You Need One to Be Great

Ron: Good morning! This is Ron Rodi, Jr. of PME360: Powering Marketing Excellence. It’s Friday. The 7th of December.

Mr. Ryan Paul Adams is on the line with me this morning. How are you this morning?

Ryan: Good.

Ron: Today’s topic is an interesting one: Finding Your Niche and Why You Need One to Be Great.

Ryan, I know this is a topic we spend a lot of time discussing. I know you put a lot of time into it. We both put a lot of time into developing and creating a niche for our business.

So let’s talk about a little bit more about why is it important. How you can find your niche. And, really why you need one to try to set yourself apart from your competitors.

Ryan, I’m not sure if you want to go ahead and kick off with what your thoughts were on the topic. Or if you wanted to start with one of quotes that you have mentioned.

Ryan: I think I can give a little bit of an insight on some of the things I was dealing with early on in trying to build a great company.

And when you are starting out, I know everybody runs through this, is that you want to get some prize. You want to get some deals. You want to get some sales. You want to get going.

So you will tend to take whatever comes your way. And we did this during the first couple of years that we were in business. Then because we did not have a clear picture of what we can be great at, we just said, “Hey! We can do internet marketing. We can do custom software. We can do programming. We can do these super complex projects.”

Whatever was thrown our way, we put our name in that.

Ron: And of course, custom websites.

I believe what you said many times, chasing shiny objects.

Ryan: You tend to chase the latest, greatest, shiny object and new prospects. You do whatever you can to get them. That’s natural.

Everybody, who is an entrepreneur, I think has been down this road. Whether you own a law firm or whether you own a home improvement company – you’re going to get stuck on that mode early on. And that’s fine.



You want to take on some deals. You want to make some mistakes and you will quickly understand the type of client you don’t want, and the type of business that you do.

I think, everybody’s going to continue in their business and would want to grow – would want to be great. To this end, they should read the book Good to Great by James Collins.

And within that book, one of the keys that I took away was the three circles of a hedgehog concept. It talks about the hedgehog.

Hedgehogs are like simple, he calls them “dowdy” creatures. They are very deliberate. They know one big thing and they stick to it. They are not trying to be anything else.

They are not the fox or the lion. And they are not the shiny, awesome animal – horse or something.

Ron: They are consistent and persistent, right?

Ryan: They are persistent and consistent. And they just know this one big thing and they focus in. And that’s all they do.

Ron: As supposed to the fox that’s running around, chasing all the opportunities that come its way.

Ryan: Absolutely. And we run into this with our home improvement and personal injury attorney clients.

They want to be the fox in the market. They don’t have any clarity on what they can be the best in the world at.

So for instance, like the home improvement client will offer a ton of service. They do window, siding, decks, basements, homes, custom additions, etc. They can do it all.

But I find that hard to believe. Because when you really look at their business, they don’t really have great people in place.

Other than the people at the top. They have a couple of people on top, maybe one owner or two.

And then the rest of the team are guys that can do a little bit of everything. None of those guys are at this point great at anything.

The same is true with the personal injury attorney. They offer car accident services, medical malpractice…

Ron: bus accidents, train accidents, nursing home, wrongful deaths, scars, burns, motorcycle crashes. You name it. Anything under the sun – they throw up in their website and they claim to be able to do.

I’m sure they can handle those types of cases. But if you really think about it, are they really the best at one of those services like the hedgehog concept.



Ryan: And I find it very hard to believe that they are the best in their market for all of those things. Because each one of those services requires very specific knowledge.

So what they are doing is just watering down their marketing strategy. They are going after so many things. It’s hard to build that marketing-sales funnel because you cannot identify that niche.

Like we are the car accident attorneys in Boston. That’s all we do. And it’s so hard for them to give up all the other shiny objects in the market. Because they are getting calls and they are getting leads for the other stuff. Because they’ve been traditionally marketing to go after that stuff.

Ron: Traditionally, they’ve been a generalist. And they can handle anything. Like what you mentioned in the beginning of the call, when you were starting off, perhaps you’re new, perhaps you’re trying to get business and you want to chase shiny new objects.

Ryan: You do. So James Collins talks about the three circles of the hedgehog concept. So here they are.

The keys are:

1. What are you deeply passionate about as a company or as an individual if you are a sole practitioner?

2. What you can be the best in the world at?3. What can you actually make money doing or what drives your economic engine as

James Collins put it?

And so, to wrap it all together, to really be great, to take your good company that’s floatingalong here, you have to implement all three of those concepts with deliberate consistency –going back to that hedgehog dowdy deliberate creature – knows this one big thing in the market and just goes after it.

This has that determination and that passion to stick with it.

Ron: Let’s think about the benefits if that for a business owner – of choosing just one niche. Of being the best in the world at something.

Doesn’t that make things easier? Doesn’t that make your process consistent? Doesn’t that make your – whether you’re creating a work order or a scope of work or a contract? Doesn’t that make things consistent across the board for you as a business owner?

Ryan: Yeah. From all the way from the messaging you have in your website, if you have a brochure or if you have a radio spot. And then if you think about all the stuff you need to create as a business owner... Somebody has got to create this messaging – live and breathe everything we talked about.

And then behind the scenes, you got to have documents, you got to have contracts. You got to have processes around every thing that you are offering.



And if you can just focus in and say,

“You know what, forget all this other stuff that we’re doing. I just want to do this.”

And you know, that you’re passionate about that. But let’s not confuse passion with “what can we be the best in the world at”. We’ll talk about that in a second.

And you know that this niche that you picked can drive your economic engine. The entire complexity of your business while it doesn’t go away completely, it gets a lot easier.

Ron: And that’s one thing that I know every business owner wants to do. How do I make things easier? It’s really hard to determine. It’s hard enough to do for one specific task – it is impossible to do for all aspects.

You give an example of a personal injury attorney or the home improvement contractor. It’s impossible to be the best in the world at all of those things you’ve mentioned.

Ryan: And I would say, for our business, we do marketing and consulting. And while we are talking about home improvement or personal injury law, they may sound different from each other. But they follow very similar marketing strategies.

And that’s why we continue to talk about those services within those two markets –attorney marketing and home improvement.

And while we, as a company, might decide that hey we only want to do this. We’re passionate about both of those. And we know we can be the best in the world at delivering.

Beyond that, we can’t be in the best in the world at marketing for a manufacturing company or an IT company. I don’t really understand those markets. While I could learn it. I could learn it pretty quickly. I’m not really passionate about those ideas. So it wouldn’t come across as genuine.

And I would tell that prospect that we’re not probably the right fit. And it’s hard to do. Because you are giving up money. But I know that I’ve got so many other deals that I could focus on – and really help these people.

Ron: How many times have we gotten thrown off course from what we’re trying to focus doing by having an upstart company come and say, “Hey! Will you work on this for us? Will you look at it?”

And we’ll say, “Yeah, we’ll take a look at it.” Then the next thing we know, we’re completely off our path.

Ryan: And it takes you into spirals. And then all of a sudden, you lose focus on the centerpiece of those three hedgehog concepts.

Ron: Exactly.



Think about how much confidence that having one niche or two niches that you can be the best in the world at. Think of how much confidence it will instill in our prospects and the business of those prospects – to those listening to this.

It will allow you to say, “Look I deal with bankruptcy attorneys. We have a complete marketing solutions for bankruptcy attorneys. We know your market. We know how to write. We know how to create content. We know how to do the things that need to be done in order to drive results and leads for your business.”

Being able to do that and being able to say that instills confidence into your prospects.

Ryan: And yeah. Success in the business is not unique to one industry. Success is determined by the use of predictable, repeatable, simple actions over and over again – a scalable business model.

So what you are talking about, in a nutshell, is that we’ve done all the research. We have a proven history of success in this part of the trade. We’ve got a marketing system now that we can re-use and repeat over and over again. And get tremendous results for clients in the market the seller targets.

The same thing with the home improvement market. You can focus in on doing one thing and doing one thing really well.

And there’s a market for it. That’s one thing we are going to talk about at the end of this call.

Ron: How to pick it? We’re going to look into it for sure.

But think about how much it improves our efficiency. Think about not trailing off from the targeted path. It has really allowed us to improve our internal processes, our internal efficiencies.

And we are able to do the work more consistently, easier and with less shifting of gears, if you will, throughout the process.

Think about that from a home improvement standpoint. Going back to the example of the home improvement contractor, if you are installing new roofs in the Boston area, and that’s where you are the best in the world at, it becomes so much easier for you as a business owner, for your team, for your project manager, for the person doing the billing, the person ordering the materials, procuring the materials, the sales person.

Everyone in the company knows this is our niche – this is what we are the best in the world at. And I think it really trickles down. You can apply this to any industry really.

You just have to determine what your niche is. So if you want to get into that a little bit, how we pick the niche.

Ryan: Just to pick up from what you said. One other thing I want to add to it.



You really have to think about your entire team, too, if you have one. And the training that you cause on your team by doing too many things.

And I see this all the time, entrepreneurs are completely ran down and the team too. The team is frustrated and going in too many directions.

I can’t say that we’re perfect at this, either as we run into this a lot where my teams fight back a little bit. Like things are changing too fast and they can’t even keep up.

And that’s where as a business owner, you have got to listen to what your team is saying.

Then look at the strengths of your team. And play to those strengths.

But if you go back to the keys and you really know what you’re passionate about as a company, you’ll get it out of your team. Ask them.

Ask them, “What you think we’re going to be the best in the world at?”

It’s not that they are going to decide. But a lot of unique information will come out of that.

And if you are catering your strategy around the people that you already have for a long time, you know as a business owner that you are passionate about the topic and what you are going after. The passion will resonate in the entire company.

Everybody will be focused and motivated hopefully to go after this whole thing.

Ron: Well in that, all the way out to your sales process.

When you’re out and you’re selling. You are able to communicate effectively. You are able to have that message. You are able to say we’re the best in the world at complete bankruptcy marketing solutions.

And that’s what we deliver. That’s what my team does. That’s what we know how to do. And that message, as you mentioned, resonates throughout the entire organization.

So all the way out to the front of the stage and the back of the stage. To the front of the house to the back of the house as we’ve heard a few people talk about. From interfacing all the way back your processes in the back office.

Ryan: And the other piece to this, it’s called the Stockdale Paradox and again it’s from the Good to Great book. It’s named after Admiral Jim Stockdale.

I don’t know if you’ve ever heard this story. But I won’t get into a lot of detail as you guys can Google it. It’s an awesome (book). I have a lot of respect for Jim Stockdale.

He was a prisoner of war in Vietnam and he was captured with a couple of his other military men. And he went in with a mindset that was crystal clear. He told himself that he was to get of out of there. He just didn’t know when because he didn’t put a date in his mind.



He had this unwavering faith that he would succeed and get out of that situation. And while the other people he was captured with kept saying like, “Oh we’re going to be out by Christmas. Or it’s only a matter of days before we get free.”

And every time they said that and those dates would come and go, it had a huge impact on their psyche.

Ron: Crushing. Crushing blow.

Ryan: Crushing. They couldn’t recover. And a lot of them didn’t survive because they kept doing this to themselves.

And so how do we apply this to business?

As an entrepreneur, you have to have that same unwavering faith in this niche that you are picking. That you will and can succeed.

But at the same time, be brutally honest about your situation. So you can’t just pick and go after your passion necessarily if there’s no economic engine to drive behind it.

Ron: Interesting. And that’s not to say that you should not set goals.

But it is to say, really, to have unwavering belief in yourself and in your team that you are going to succeed.

It is a lot easier to succeed doing what you are passionate about. Doing what you believe you can be the best in the world at. All while fueling your economic engine.

Ryan: All the great athletes have this – this unwavering faith in themselves first. And then, also the ability to trust their teammates in key situations.

But they are the guys who want the ball. Again, they have unwavering faith that they are going to make the shot. They are going to win the game at the end.

And that, it never enters their minds that they’re going to fail. I think, one of the biggest differentiators I have ever found with the companies that succeed and the ones that don’t –leaders at the top of the organization.

Leaders that have that mentality. Failure has just never entered their mind. They just know that they can succeed in their market.

Ron: Well, good to create talks about Level 5 Leadership.

Putting the success of the company before the individual. We can go on and on probably about that book.

But to the entrepreneur, the business owner who is listening in, what do you suggest? What is the best place to start?

Obviously you have to know yourself. You have to hopefully know your business.



And let’s say I am a business owner. I have a year and a half of experience. Two years, what have you. Doesn’t really matter. Even 20 years for that matter.

What’s the best place to start? What do you suggest that they do in terms of laying a blueprint on how to come up with what their niche should be.

Ryan: Well I think, I’m in the Internet marketing space.

I always go back to if you want to find out for what you want to target. I would start with Google Keyword research. And you also have to know what it’s going to cost to acquire a new customer.

Ron: So in other words, I’m going to do some research on what it costs to compete: what my marketing dollars should be, how I’m going to acquire new customers, how I’m going to grow my niche, what niche I’m going to get into, what is it going to cost me to acquire a new customer.

Ryan: Correct.

So I would start with some general keyword search.

For those listening, go to Google and search for the Google Keyword tool. If you are going to get to that, you will have a screen that says “Find Keywords”.

And within there, I would start typing out what’s your market, who are you going after, what would those people search for. Then, start to see the competition level and what the Google Keyword tool returns.

There’s also a column within this that you can search by approximate CPC, which is cost per click in Google Adword.

And this is a little trick I use to determine for the markets that we work in: what is it going to cost to acquire this customer.

This isn’t a perfect science but if gives you an idea what the competition is willing to invest or spend – to throw away or whatever you want to call it, to acquire as new customer in your market.

So I would then do some research on bankruptcy law in Chicago because we have a client there. And we’re just curious where the cost to acquire in that market was.

If I was going to focus 100% on bankruptcy law which I think is a little broad a niche, I think you will probably really want to look at consumer bankruptcy.

You don’t really want to that plus business bankruptcy. You really have to focus on what you are going to do there.

Ron: Then there’s a lot of different subsets.

Ryan: There’s Chapter 7 and Chapter 13. There’s a couple of ways you can focus…



Ron: That’s for general purposes, right?

Ryan: Yup. For general purposes. You’ve got to be a bankruptcy attorney and you’re already in that space.

And you want to know what it realistically cost to acquire a customer. So I’m returning bankruptcy lawyer in Chicago, about 5,400 monthly local search. That’s a pretty good size of market for a local search term.

And the other one I threw in there bankruptcy attorney came back the same way in Chicago.

The average cost per click in Google Adword which is the paid ads within Google is $46.35 per click.

Ron: So really per visit.

Ryan: Per visit to your site. Every time someone clicks on your ad and goes to your site. This is what it’s going to cost. For the simple rule of thumb, it typically takes about 100 clicks to get one new client.

And the way we’re determining that is that on average about 5% of your traffic is going to virtually, they’re going to call you, they’re going to fill out a form.

So you are going to get 5 leads out a 100 clicks.

Some people can do better. Some people will actually do worse. Let’s just assume it’s pretty standard rate – which it is.

And then the standard close rates for most markets is about 20%, which means out of those 5 leads, you are going to get one client.

You have just invested, if you are after this market, your competition is telling you that they are willing to spend up to $4,600 to acquire one new customer in this market, for these keywords.

And we know that these keywords are being used. You can do a search in Google and type in these keywords. And you can see all those paid ads and all the paid inorganic prelisting .

And typically, a higher cost per click like this indicates that there is stiff competition. People are bidding on this hard. There are competitors in this market who are spending this much money.

Ron: So they are willing to invest up to, as you mentioned, $4,600 to acquire a new case. Now as the bankruptcy attorney, you should be able to ask yourself, “Can I compete? Can I sustain? Is it that profitable to me as a business owner?”

Ryan: Especially if you only have a $1,000 to market your company per month.

So the answer clearly is “No”.



You cannot compete for bankruptcy law in Chicago. With your current situation, you have to be brutally honest about that.

Ron: Well you are talking a little about setting budgets and having a realistic expectation. So it kind of ties hand in hand. So go ahead, sorry to interrupt.

Ryan: Part of being brutally honest is okay, I want to go after…

I want to sell DVDs online. You want to, just using that example of an insanely competitive market, which is like crazy.

For you to rank for DVDs –selling DVDs online is going to be insane. If you are brutally honest with yourself, you are not going to be the best in the world at selling new released DVD.

Because Amazon’s got the business model down. Walmart’s got it down. eBay’s got it down. It’s not going to be possible.

You’ve got a niche that down even more. Maybe there’s something within that you can be good at.

I think the same thing goes for business marketing is that, you got to look at your situation. If you are not going raise capital to market correctly and build out your sales funnel. And all this.

You’ve got to be looking at a niche that you can do that with. With the money that you have.And the situation that you have.

That’s a situation that’s a ton of business miss. They want to be competitive in highly competitive markets but they don’t have any money.

So you’ve got to get super creative and maybe you are going to compete but more often than not, you won’t be able to.

You’ve got to find something in that, that’s a sub-niche of that market.

Ron: So that’s exactly it. You have your niche. You have your specialty. Now, you can find your sub-niche.

Now what if you went through Google Keyword research tool and you did more of a sub-niche for those same terms. I’m willing to guess that the cost per click is going to be less than that.

Ryan: So if you niche that down a little bit more. And now say that you want to be low cost bankruptcy provider for Chicago, you want to be the cheap bankruptcy lawyer in Chicago.

And I don’t know if that’s the right strategy for most people but it might be in your situation. You want to build out a high volume business. You created a process to help people get out of bankruptcy inexpensively. You can be that cheap provider.



That click, there’s a ton of search volume here that I’m looking at right now, so there’s a market. And the cost per click is half. It’s between $16 and $26 per click.

And you can probably get it down a lot more by having the right marketing funnel, the right messaging and all that. We can cover that another day.

But that’s just one idea is that you can break that down a little bit and maybe it’s even more than that. It’s cheap Chapter 7 bankruptcy in Chicago. For me, even take a look around you.

Maybe Chicago is just too competitive. Maybe there are little markets around Chicago that you can focus in on. Towns that need your services or neighborhoods.

And just be the bankruptcy attorney in Joliet. Don’t even go after Chicago. Because you know you are going to get burned.

And you don’t have the budget to compete. Be the guy in all of your marketing – that’s the thing in your USP, everything you’ve developed around that local market.

So hopefully, that helps. We kind of ran through that fast. There’s a lot more to this. But you kind of get the ideas, again so those keys.

You’ve got to find out what you are deeply passionate about as a company. And what you could be the best in the world at. Those are two very different things. You’ve got to make that distinction.

The Hedgehog concept isn’t a goal to be the best. The strategy to be the best. The intention to be the best. The plan to be the best. It is an understanding of what you can be the best at. The distinction is absolutely critical.

Ron: Say that last part again. I want to here that last part again.

Ryan: It’s a quote from Good to Great by James Collins.

The hedgehog concept is not a goal to be the best or the strategy to be the best or an intention to be the best or a plan to be the best. It is an understanding of what you can be the best at. The distinction is absolutely crucial. It’s extremely powerful to keep that in your mind everyday as you are working trying to find this.

Ron: Very interesting. So really, what’s that saying. You can set a plan. You can set a goal to be…but if you’re not passionate about it then you’re not going to become the best in the world at it.

You’ve not going to…wanting something and not being passionate about it is rather silly that’s what he’s saying. That’s what he’s talking about right there.

Ryan: Yeah my passion was to be a professional baseball player. And after elbow and ankle surgeries and everything else. It just wasn’t going to happen. I had to be brutally honest with myself. I can no longer be the best in the world at pitching. But I really felt I can be the best in the world at helping other companies.



I really understood business. I have been in business since I was as far as I can remember 12 year old, I started my business. And that’s what I’m passionate about it. I love business, I love talking about them.

I can be the best in the world at helping up business. How they can even get more crystal clear on those…so many businesses I have helped. Where can I…where does my passion lie within that.

My passion is in the home improvement market, custom homes whatever else it’s involved in. And I kind of stumbled upon the attorney market.

And I’ve found out that I’m really good at it too.

Ron: It goes back to why you are passionate about it. You want to see this business succeed. You want to be able to take your knowledge and help apply it to growing their business.

Ryan: I think it’s personal that we aren’t getting results. I really take every dollar of our clients as if it is my own. I don’t take it lightly.

Ron: And that speaks of the competitive nature of our agency.

Ryan: Yeah. Our entire team is that way. We really get ticked off if we can’t produce results.

It does happen from time to time. We just can’t get penetration in the market. And 9 times out of 10, it’s not necessarily because of what we’re doing.

It’s just that we’re not doing enough. And that comes back to being realistic about your budget. What you are trying to accomplish.

And all those things.

Ron: Oh yeah. You have to remember too that it’s not going to happen overnight. It’s going to take time. So if you are thinking about implementing internet marketing strategy, we can help you out at PME360.com and there are three things that we could offer.

One of the things we are currently offering is our local marketing blueprint. So if you are thinking about strategy, as Ryan mentioned, we could start there.

You could take a look around. You are not quite sure what to do. You’re hearing all these buzz words. You’re not quite sure which way to go, we’re offering our local marketing blueprint.

And as we talked about before our complete internet marketing system – our complete solutions.



Really, to determine what the right strategy first, then implementing that strategy. And to go with what you are saying, things take time and depending where you are in your business, give us a call or go to our website.

We’ll be more than happy to talk to you and really, it goes back to why we want to do it. Because we are passionate about your success.

We are passionate about small and medium sized businesses – and having them succeed.

Ryan: Thank you for your time Ron. Good call.

Ron: Thanks, Ryan. Take care.

Ryan: Thank you. Bye.

how to find your niche in your local market and why you need one to be great

Education