Sorry for all the intellectual “stuff” as I try to effectively “teach” professional services marketing through this column, but sometimes you have to buckle down to the books rather than just winging it. I didn’t get to where I am in the marketing/legal world by just wandering out and bumbling around. I took the time to read and think. So I am moving on from Peter Drucker (the topic of my last article) to Michael Porter.
Michael Porter is also very cool and a famous professor at Harvard Business School. He is known for his incredible insights into competitive advantages and his famous “Five Forces” to assess competitiveness of an “industry” are taught in “every” business school.
He has written a ton of stuff and if you are a scholarly type, his books are like catnip to a cat; however, if you want to just learn the basics, they are explained in a great book by Joan Magretta called, aptly, Understanding Michael Porter (affiliate link). In any case, the buildup is over and let me get to the point.
Professor Porter is often asked what is the biggest mistake people make in the business world and he answers “trying to be better” than their competition. If you try to get “better,” all you do is spur your competitors to do the same thing. Then pricing falls or efficiency rises, etc. All that then happens is the upside from your industry (and indeed the upside from your investment in getting “better”) goes straight to the customers, and not to you. Indeed, when you are the absolute “best” you can be and so are your competitors, the result is zero profit!
So what should you do? Mr. Porter answers “be different.”
This is not far off from the concept of “innovating” is it?
Also, by the way, for those of you who read my prior series of articles on Above the Law — Reinventing the Law Business — you may recall I started out that series of articles with Messrs. Drucker and Porter. They are always a good place to start.
Now to sum up and put Mr. Drucker and Mr. Porter — my intellectual heroes — together, your plan in the business world should logically be
Innovate and market to create customers
I know this article is shorter than usual; however, this really is the basis for my marketing plan and the essence of the Power Niche — and it is worth dwelling on it.
Here is the definition of Power Niche again so you have it handy.
In brief, a Power Niche is a small-sized niche within a bigger industry that no one else yet dominates or owns. The niche isn’t obvious so you have to figure it out and “create” it. You step in and learn everything about it and everyone in it. You tell everyone about what you are doing – incessantly – and become the real “owner” of the niche merely by staking out your homestead in virgin territory. This then becomes a virtuous cycle as the more you know, the more you do, and the more you do, the more you know. Before long you are the world’s unquestioned expert in this (smaller) niche. All of this enhances your bargaining power within that niche. Instead of begging for business in the bigger industry, you now have eager clients paying you top dollar within this smaller Power Niche.