BY AMIT MITTAL, Business Coach, Consulting & Advisory
The most essential transaction of a business is the sale of its products and services to its consumers, without this, your business is just an idea. But which products and services should a business sell? Which target market has the most demand for them? Who are your customers? How will you sell your products? These kinds of questions are needed to be answered to run a profitable business.
You would be surprised to know that all these questions can be answered if you find and recognize your niche. The word niche is very common now in the business world, but what does it mean?
Niche ( pronounced as nee-sh),
- a comfortable or suitable position in life or employment.
- a specialized segment of the market for a particular kind of product or service.
denoting products, services, or interests that appeal to a small, specialized section of the population.
place (something) in a niche or recess.
Niche is where the business becomes a commercial, profitable enterprise. At this level, everything is oriented around marketing. Niche is a sales and marketing technique used by many businesses today. Many successful businesses come up with different and innovative marketing strategies that only work for targeted markets. Today there are several commodities in the market selling similar products and services but only when a consumer and/or the market chooses a particular brand that means the business has a “niche”.
A niche is a focused, targeted area that you serve particularly well.
It is small (and the smaller the better).
It is specific.
It is known to you.
It is innovative.
The term “6 Steps” is ActionCOACH shorthand for “The 6 Steps to Building a Business” – a proven and progressive, step-by-step approach that helps clarify the company’s objectives and produces consistent profits over time.
The definition of a business in the ActionCOACH world is a commercial, profitable enterprise that works without you’ – the ‘you’ being the owner of the business. The 6 steps are the building blocks of creating a business that the owner can ultimately work ‘on’ and not ‘in.’
After mastery the next step is niche. Niche is one of the six steps to the success of the business. Niche, is about creating predictable cash flow for the business and operating from a position where the business has no price competition.
Finding your niche will not only help you create a steady stream of revenue and make your customers more loyal towards your brand. Coming up with innovative strategies for your business will help you find your niche.
Niche namely stands on five pillars. These pillars help you understand how to identify your niche and attain competitive advantage, which will ultimately help you outperform your competitors.
One of the five pillars of niche is Acquisition Cost.
Acquisition costs are those funds that are used to introduce new customers to the company’s products and services in hopes of acquiring the customer’s business. They are useful to determine the full expense incurred in enticing new customers, and it can be used to compare to the revenue new customers generate.
Acquisition costs are useful because they recognize a more realistic cost on a company’s financial statements than using other measures.
Thus when we advertise, we are effectively “buying” a customer. The costs associated with this transaction are called “Acquisition Costs”. To calculate this cost, simply divide the cost of a particular advertising campaign by the number of SALES (customers) are generated. It is important NOT to divide by the number of LEADS.
It is important to test-and-measure in order to keep a constant figure for acquisition costs. Of course, the goal is to have low acquisition costs and to continue campaigns with lower acquisition cost while changing and/or stopping campaigns in which the acquisition costs are too high to be profitable.
One should also consider the Lifetime Value of a customer in industries where it is appropriate. The difference between the lifetime value and acquisition costs can either be an expense or an investment. Finding the best suitable strategy to acquire new customers will help your business get an unlimited marketing budget. Too high acquisition costs only increases the expense of a business. The goal is to convert that expense into an investment by increasing the lifetime value of your customers. An investment in your customers, your niche.
Stay tuned to know more about the niche. We at MADASKY, believe the problems and the solutions go hand in hand, while there is a problem, a solution is a hope that is available and accessible in abundance to all who need it.
My successive post will cover the next pillar of Niche.
Reach out to us and we will help you to overcome your business challenges and grow.
MADASKY Consulting, Business Coaching, Consulting & Advising.
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