A Marketing Professor told my class in college about how when he was starting up his marketing agency he had to pick between two cities:
- He could set up shop in his hometown in Illinois where there would be no competition
- He could set up shop in San Diego where there were 87 other marketing agencies
No brainer, right?
- Pick “Hometown, Illinois”
- Set up shop
- Be the #1 marketing agency in town
Right?
Not quite.
Whenever you’re evaluating a target market, you want to pause to make sure your target market spends money. Ideally? You’re setting your business up next to a river of cash.
If your target market doesn’t spend money, then you do not want to work with that target market.
This should be part of your Market Research process: pause and confirm that your target market spends money on consultants.
Call this the “Monetarysearch.”
You want to focus on a target market that can afford you, and that spends money on consultants.
If your target market doesn’t spend money, doesn’t spend money on consultants, or can’t afford you, you want to pick a different target market.
In my Professor’s case, he ended up setting up business in San Diego.
The absence of any existing competitors in his hometown made him consider if there was enough demand to keep them in business.
Because he paused and did this Monetarysearch, he realized that the 87 competitors meant there was a tremendous amount of demand for marketing in San Diego.
He set up shop in San Diego and went into business. He didn’t need to be the best marketing agency out there, he just needed to be the 80th best or the 69th best.
How can you apply this to your own business?
Well, it works great as you’re thinking about and deciding between target markets or niches.
First, as part of your market research, do a bit of Monetarysearch. Check to see if your target market spends money. If so, what do they spend money on? Consultants? Like you?
Second, look for competitors that are already serving your target market. If you can find the competitors, that’s a good sign. That means that there is demand for the services you’ll be selling.
Third, reach out to — wait, nope, hold on, that’s a lesson from Get More Leads, releasing at the end of March.
Competition can mean you’re setting up business next to a river of cash. And that’s a good thing.
Excelsior!
Kai