I’ve been in business over twenty years and I’ve seen a lot of business models. It always intrigues me to see the difference between those who go after only the high end markets (The Neiman Marcus models), those who only go after the masses and the low end markets (The Walmart models), and those who attempt to market to both.
The Middle Is Gone
News Flash! There is nothing in the middle, really that’s just the way it is. Business is not an oreo cookie with tasty creme in the middle, instead you have a viable market at the top and the mass market at the bottom. You need to know where you are or risk being out of business. Oh, and read on to find out the pros and cons of each . . .
Now the GOOD NEWS is that there is plenty to go around at both ends. In the case of the Walmart model there are always more people joining the mass market so that opportunity is never ending. You simply have to provide the right product or service at the cheapest price point to be able to play. They don’t care as much about benefits or features as they do about price.
Personally, I rarely make a decision based on price, instead I weigh benefits, transformational value, and even features. That puts me at the Neiman Marcus end of the market and I like to work with clients who are there too. Now, don’t misunderstand, the high end of the market doesn’t mean out of reach, it does mean that you will likely stretch yourself to get there. That is the point, if everyone could be there, it wouldn’t be any different than the low end, now would it.
The Top vs. The Bottom
The cool part about the top end is that you have to work with far fewer to make as much or a lot more money than when you work with the masses. Yes, your selling cycle might be longer, but the quality of the clientele you work with is superior and is likely to create fewer headaches than when you work with the bottom of the market. For example, professional experience has taught me that those purchasing at the bottom are incredibly needy, whiny, and often major complainers while those at the top are independent, self reliant, and fun to work with. Just my experience, perhaps yours is different. Love your comments below!
The $95 T-shirt vs. The $20 T-shirt
What woke me up to this is a recent chance meeting I had with a guy in the “apparel business.” That was his terminology and it sounded good to me. As we talked, it turned out that he was in the “t-shirt” business but because he considered it apparel, was playing at the top end, and limited his designs to create exclusivity, and he was marketing by association with high end product and personality placement, his model said Neiman Marcus.
This is in contrast to a friend of mine who has been coming up with t-shirts in the college market, mass distribution attempted, and a price point quite literally 1/3 of what the “apparel business” guy was able to get. And this friend is constantly scrambling for the next order because his margins are so much thinner.
What This Means To You
Now, I’m not saying you can’t make it big at the Walmart level, a lot of people do. I’m simply suggesting that you take a closer look at your business because I’m betting that you have the opportunity to climb on up to that Neiman Marcus level sooner than you think and enjoy more income with fewer clients, less whining, and more fun. Fewer clients means less time invested in your business, I know because I’ve done it both ways. Fewer clients, when they are the right clients, and you charge what you are worth can totally transform your business from one of stress and chasing to one of ease and delivery with passion.