We often recommend finding a niche or developing a specialism to our creative sector clients – typically digital media, design, film & video and live event production companies of under £10m turnover. And the concept of a niche or specialism is often greeted with dismay and misunderstanding. This blog dispels six myths about developing a niche or specialism.
Film and video production companies used to be able to sell themselves on their ability to use the technology and kit. Now, as predicted back in 2010 in our Every Sense Guide: User Generated Video – Threat or Opportunity, everyone is a producer. And, regardless of how excellent you may think your film and video work is, it is genuinely hard for clients to see the difference between one company’s output and the next. Claiming to be ‘more creative’ is rarely a credible point of differentiation.
Myth 1 – Adopting a niche means focussing on one sector
A niche doesn’t have to be sector-based. A niche or specialism can be based on the purpose i.e. the value / or outcome of what you do for your clients rather than a sector. Ask: ‘Where are we expert?’ ‘Where are we specialist? ‘What kind of work do we consistently win over the competition?’ ‘Where do we make the most margin?’ Look at the trends in the type of work where you are most profitable.
Myth 2 – Adopting a niche means turning away some existing clients
If an existing client comes to you, cash in hand, asking you to do work outside your niche or specialism and you can it, then, of course you will be delighted deliver for them. But continuing to service existing clients outside your specialism is not the same as investing money or time on prospecting or pitching where you have no differentiation or added value and are unlikely to win the work or make money on it when you do.
Myth 3 – Adopting a niche limits our potential
Finding a niche enables you to develop strength in depth. Creative agencies often follow the Value Discipline of Customer Intimacy (even if they don’t know it!) This strategy is defined as ‘tailoring products to fit the specific needs of market segments, where companies compete on superior service and satisfying wants rather than low prices’. Put simply, Customer Intimacy is driven by insight . . . and you can’t have insight about everything. The more insight you have in your niche or specialism, the more likely you are to be able develop new services and added value services and this will fuel profitable growth. No limits here!
Myth 4 – Adopting a niche will upset our clients who like us to be generalists
We talk to about 100 clients a year through the qualitative client surveys we conduct for creative company clients. When asked how their creative agency adds value the reply is most often that the creative agency ‘gets us’ or ‘they understand us.’ That presents a challenge for new agencies to demonstrate how they add value from a standing start as you won’t ‘know’ the client. But, as a specialist you can approach targeted relevant clients and demonstrate real added value from your existing track record, insight and approach. With the increasing influence of procurement in buying decisions, procurement is asking their internal clients to justify their choice of agency – especially if they are not the cheapest. Check out our Every Sense Procurement Guide for the IVCA for more insight about what clients and procurement departments are looking for and why being a specialist can differentiate you and enable you to charge a premium price.
Myth 5 – Adopting a niche is high risk
Adopting a niche reduces risk and provides focus. Having a niche or specialism means your marketing and sales process is infinitely easier and more cost effective. You to know who to target, who to talk to, what industry events to attend, what expertise, skills and thought-leadership to develop, what skills and knowledge to nurture in-house, what skills to recruit – the list of advantages is endless.
And even if you are a sector specialist and that sector experiences a down-turn, your expertise and insight puts you in much better place to continue to serve that market-place.
As a generalist you will always be stuck in the dog-fights, battling to show added-value and fighting for margin. You don’t get higher risk than that.
Myth 6 – Adopting a niche is boring
Creative agencies don’t say this – but it might be what they mean! Creative agencies are run by creative people who like the challenge of ‘the next stimulating thing.’ Perhaps the word ‘niche’ itself sounds small and dark. Next time you are struggling with the concept of niche try asking instead: ‘where are we specialist?’ ‘Where are we expert?’
Our experience and research shows that creative agencies which adopt a niche or specialism can target their marketing, improve effectiveness, give greater added-value, develop and retain their people, diversify, grow and increase profitability. Does that sound boring to you?