When it comes to service-related business, one of the biggest misconceptions about business is that the more things a business can do, the more valuable it will be in the eyes of the customer. Unfortunately, nothing could be further from the truth.
In most cases, the greater your depth of knowledge in a specific area of expertise vs having a breadth of knowledge makes customers perceive you as having more value. As such you can command a much higher rate for your services.
Consider the 2018 Merritt Hawkins report on Physicians Starting Salaries by Specialty that shows that a Family Medicine Physician with a broad but superficial knowledge makes less than half the average salary of a Cardiologist that is a specialist.
Based on this misconception, many entrepreneurs often claim that they are good at many things. They falsely believe that being able to do more things translates into having greater revenue potential. The problem with this thinking is twofold.
Credibility – These statements destroy your market credibility. Today customers want experts, not generalists. By claiming that you can do many different tasks, you are saying that you are at best average and not world class. That means you either have to lower your price to compensate for your lack of focus, or you risk being passed over when the customer chooses an expert in the service.
Too Thin – All businesses have a limit to their marketing budget. It takes repetition to achieve any level of brand awareness. By having many things that you claim you can do, your marketing efforts are spread so thin your message never rises above the din of other companies that specialize in that service.
Imagine going to your medical doctor and having him tell you that not only is he a great doctor but he is also a great financial advisor. If it were me, my first reaction would be to head for the door. I know that both fields require a lifetime to master and even then, it would be hard to know everything in their field. Claiming to have mastery in both skills would send a clear message that you are spread way too thin and cause me to go shields up and avoid further communications.
When we hire someone we want to hire an expert, not someone that just dabbles in an area. Furthermore, a key part of marketing is branding. It takes a lot of effort to create brand awareness. You only have so much time and so many resources.
If you spread your branding efforts across several expertise areas, you will never achieve enough penetration in any one area to be recognized above others offering the same services. You will be like the tiny sea mountain that is below the surface of the ocean, never to be seen.
Regardless of whether you are starting a new business or looking to re-align an existing business, you need to consider ways to unlock a new blue ocean where you own your niche or risk going broke. By Applying the Business Model Canvas you can be an inch wide and a mile deep and find a profitable niche for your business.
How can you change your business model to be an inch wide and mile deep?
