Where is the gap in your market? That’s the crucial question, isn’t it?
Do you know?
The gap in my market – let’s call it the market for marketing services – is the mid-sized company wanting to grow bigger. These companies struggle to get quality marketing advice at an affordable price.
You could argue that the same gap exists with small companies, but they don’t have much money, which means they don’t qualify as a true gap. There must be money on the table for it to be a viable business opportunity.
Once you have identified the gap, the trick is to figure out how to serve it profitably. This is your business model – i.e. how you will deliver your product or service. It’s often easy to identify a gap, but much more difficult to serve it profitably. This is why I don’t mind sharing the gap I have identified.
The classic example is South West Airlines in the USA when it decided to target the non-flying segment of the population. They developed an operating model that allowed them to cut costs drastically and serve customers who typically could not afford to fly. South West standardised their fleet to only Boeing 737s, offered no free snacks and made sure the plane can turn around quickly by, amongst other things, asking passengers to clean up before they leave the plane. Today Kulula does this in South Africa. It is a relatively new business model to serve a gap in the market.
In the marketing game, a similar scenario exists. Everyone wants to work with the corporates such as Standard Bank, Sasol and Coca Cola. These are the brands every marketing agency wants to list in their portfolio deck. But what about the guy in Alberton doing R100M / year? Or the one in Durban doing R20M / year? Or the one in Cape Town doing R50M / year? No one wants to work with them. They are currently being underserved within the marketing industry. This is the gap.
Where is the gap in your market? The underserved segment? The uncool segment? The segment everyone turns their noses up at? Have you identified this segment in your industry? This is the fight you should fight.
Alternatively, play where everyone else is playing. Serve the segment everyone is serving and be forced to use the only tool that ultimately matters to a customer spoilt for choice: the lowest price.