Differentiating and maximizing your idea in the best way possible
TLDR:
- Niching down your idea to a category of one means you’re no longer constrained by the dynamics of a mass market with higher volume of competition
- Offering a commoditized solution allows you to cash in on targeted marketing that resonates with that unique avatar on a deeper emotional level
- If you’re able to niche down to the limit, it allows you to double down on building your expertise in that area.
- The unique avatar cannot argue about your premium price for a commoditized solution nonexistent elsewhere in the market
- It becomes far easier to foster client relationships that are stronger
As Alex Hormozi says, the “riches are in the niches.”
As we explain in this article, if you’re able to niche down to the point that you can compete at a “category of one” and help a very unique avatar solve a specific problem in a unique way that combats their biggest objections, you’re golden.
1. Reduced Competition
If you’re able to niche your idea to a category of one, you’re no longer constrained by the pricing dynamics of a market that is more general with a higher volume of competitors.
You are able to sell your idea in a way that’s completely 1:1 and you won’t have to compete with anyone else, which protects your margins, along with a host of competitive advantages that are enduring.
By competing in a mass market, major retailers would have already occupied a space, making it very difficult to dethrone them in spite of how game-changing your idea may be.
On the other hand, if you’re able to niche down to the point where you can provide a commoditized solution (that being a compelling argument that you can solve a specific person’s problem better than a generic solution), you can capture and dominate the market.
You’d also be able to spend more money on targeted ad dollars, more specific ways of reaching out to customers with specific messaging at higher price points and make a good profit out of it, and build a business around it, and this image from Hormozi’s course on Acquistion.com perfectly illustrates it:
2. Targeted Marketing
As mentioned in the previous paragraph, this also allows you to devise and implement targeted marketing strategies. By being able to understand the very specific needs, pain points, and preferences of that niche’s audience, you can tailor your marketing efforts to resonate with them on a deeper emotional level.
By being able to convey messaging that is more personal and conveying, it leads to higher conversion rates.
3. Enhancing Your Expertise
If you’re able to niche down to the limit, it allows you to double down on building your expertise in that area.
By profoundly working in that niche, you gain a thorough understanding of the intricacies and nuances of that market segment, helping you elevate your credibility and degree of authority in the niche.
4. Premium Pricing
As we said earlier, if you can offer a commoditized solution that is not available anywhere else in the market, you can fast track the foot-in-the-door psychological phenomenon to convince consumers to directly comply with a large request in offering a high price, rather than initially building it up with small requests.
You’d have all the power at the bargaining table with a commoditized solution up your sleeve; it’d be very difficult for that unique avatar to bargain.
5. Stronger Client Relationships
When you’re operating within a very specific niche, it is easier to foster client relationships that are stronger. By offering a commoditized solution that has translated to immense success for your clients, you can rest assured that they’ll convert into long-term clients.
It may seem that niching your idea down to the max would mean your idea ends up becoming very obscure, but as Hormozi says, it allows you to increase your price by 100x, and one customer purchasing a commoditized solution may be equivalent to as much as 20 customers purchasing a generic solution that may take far longer to get in a mass market with high barriers to entry.