Your Category of One Creates Opportunity

Thursday, July 13th, 2023
#category-of-one

In very crowded spaces with an individual making the decision, a given solution just needs to find a spiky preference.

An example was from an entrepreneur who came up with a screen-capture tool that competed with the free features that ship with laptops.

The "spiky preference" was to have automatic centering to make the image more beautiful for posting on blogs or Twitter.

It is a different use case from the more generic tools, and was enough of a different to charge users for it.

So while the category of screen shot tools could arguably have been winner-take-all by the free version from incumbents, there was room for a spiky preference.

To me, this is different from "niching down" which, while also a valuable strategy to build a category to own and dominate in the mind of the customer.

Niching down often implies going after a smaller market with tighter constraints on the demographics.

So a marketing consultant who wasn't generic, but specialized in plumbers, would have a much deeper understanding of the market and be picked by plumbers. This is not a bad idea since the market of plumbers remains large.

It is meaningful because the spiky preferences are harder edges with more detailed requirements. It's not hard to make the case that a plumber's marketing objectives and needs differ from that of a fitness trainer.

The benefit of such demographic-based targeting is that the distribution channels are also often based on demographics. There are forums, trade-shows, and magazines geared towards plumbers. This makes it easier to reach and target.

But what about emerging opportunities like targeting creators or freelancers?

On the one hand, functional or demographic targeting helps. A creator who is interested in Twitch or YouTube will certainly prefer to purchase from someone who specializes in their field.

Same with freelancers: I'd rather learn from a freelancer doing something similar to what I am trying to do.

But there's another layer. It doesn't displace the value of functional or demographic segmentation.

But it gives something that still adds a distinction to the buyer.

After all, the challenge with demographic based segmentation and product specialization is there is still competition. And while it helps to narrow down prospects, it doesn't necessary make the category yours to own.

Instead of demographics, psychographics create a sea of opportunity in large markets

Psychographics, which are about the personality, the personal history, the view of the world -- of both yourself and that of your customers, are also bonding opportunities.

Identical services can be offered by two vendors; but the reason to buy once the baseline of quality and budget are addressed can boil down to "chemistry." This is similar to the "culture fit" by companies.

This is a combination of values, personality, and just finding ways to "click."

But such "chemistry" is often treated as random, magical, and inexplicable.

I don't think that's necessarily true. There are elements of ourselves and our customers that we can become aware of who make our "ideal people." It works in dating and can work in marketing.