What does having a really clearly defined narrow niche in both what industry you target and what specialty you offer have to do with thriving in a recession? The short and surprising (not to me) answer is EVERYTHING.
Here’s why:
Price Cutting
When a business is hit with lower sales and the awful fear of ever getting more sales during a recession, the natural response is to pull their prices down. This typically happens for businesses who are not highly specialized in either their customer type or in the service they provide. A specialist who has a clearly defined niche is by virtue of having picked and marketed the niche, someone who knows more and can do a better job of the said niche. Studies continually show that specialists get paid more and can command higher rates than generalists. This is especially true in a recession.
Standing Out
When your business is not known for doing more work in one industry or for being the best at one specific type of work, it blends in with thousands of other similar businesses who are also marketing to anybody with a pulse they encounter. Non-niched businesses don’t have a way to differentiate themselves. I mean, think about buying two identical white boxes on a shelf. What information would you use to make your decision about which one performs better? The price. When you’re a generalist, you are essentially a white box, competing in a world of white boxes. This problem is actually exacerbated in a recession because you will have less resources than ever for visibility when your earnings are at stake and you will have to be working more efficiently to target your niche industry and message specifically around your specialty.
Brand Equity
When you are better at something than everyone else in the market (ie. a specialist who is niched in something or someone), your brand equity (the value that people see in paying you bigger bucks than the next guy) is huge. Think about whether in a recession, your clients would rather hire a business who has a reputation in that industry or a generalist who has had some experience in it to help them grow their business.
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