I’m particular about the kind of food that goes into my family’s body, and I’m likewise careful about what my kitty eats. One day recently she ran out of Newman’s Own Organic cat food and I was nowhere near a store that carries it, so I was standing in the Bi-Lo pet food aisle reading product labels. The ingredients in a can of “Kitty Snacks” looked pretty good—chicken breast, spices, water… plus preservatives & artificial flavors… well, you can’t have it all, right? The can was 6 oz and cost $2.18. Whew.
Then: Brainstorm. I grabbed my cart and headed down to the canned goods aisle. There alongside the devilled ham and tuna fish were cans of chicken, $1.09 for 12 oz. I’ll save you the math: That’s ¼ the cost for the same product, and the ingredients were better: chicken breast, spices, water, and nothing I couldn’t pronounce. Not a balanced diet, but an adequate hold-over until I could get back to Harris Teeter for the good stuff.
If you’re a bargain hunter like me, you love this deal. If you’re a business owner like me, you should also be asking yourself—which aisle do I want to be on? Am I positioned beside my competitors and pricing accordingly, or am I on the top shelf by myself naming my own price? Granted, some folks are going to head over to the canned goods aisle anyway and get the bargain price, but you better believe most top shelf cat food shoppers are going to grab the item marketed just for them, and never look back.
Those of us who want to be on the top shelf, making 4 times the revenue for the same product, can learn from the cat food. Here’s how:
1. Find a niche that’s willing to pay
When you’re looking for canned chicken meat to add to a casserole, you’re going to be price conscious and you’re going to be looking at a shelf full of alternate brands, all priced to compete. If you’re the producer, you should be thinking, “Who else might buy canned chicken, and pay a premium?”
2. Package for that niche
Once you’ve identified a promising niche with low competition and high prices, give them a value proposition tailored just for them and package it attractively.
3. Position for that niche
Put your product on the aisle where they’re looking. This may include where you place your ads, your company reps, your website links, your press releases, your memberships, and who is on your contact lists.
4. Charge appropriately
If you’ve done your homework, you’ve now got a market that is willing and expects to pay a premium. Don’t discount, and don’t enter the market as a price competitor. Once you start down that road, you can’t go back. If you’re delivering a premium niche product, price it as a premium niche product.
5. Lather, rinse, repeat
Think about it—how about canned chicken for dogs (partner with Doggy Kong and include cans of meat treat to stuff inside the toys)? How about for carnivorous fish (think of the teeny tiny packages you could sell!)? I’ll bet they’re already there. If someone’s not already selling expensive canned chicken packaged exclusively for wildlife rehabilitators, maybe I need to buy a chicken processing plant and get that started.
Rob Slee, highly successful multiple business owner and self-avowed “niche-a-holic,” articulates this model of niche marketing in more detail in his book Midas Marketing. In a recent blog post, he adds that he never worries about whether a niche is big enough—he worries about whether it’s small enough. The key is to develop a tree of small niches that add up to a larger number than you could accomplish by tackling the entire market at once.
So, where is your company? Still competing on the canned goods aisle? Find a better shelf, and tell me about it!