Can you believe that? Once, aluminium, one of the most common elements on earth, was valued at almost twice the price of gold. In 1852, aluminium cost $1,200 per kg, while gold was being sold at around $664 per kg. But aluminium prices dropped all the way to $1 per kg by the 1890s. Now, it’s commonly used to wrap leftovers and make soda cans. How did that happen?
It turns out that back in the days, it was very difficult to extract. Ane we could only produce very little of the metal. But then, scientists in the United States and Europe finally figured out how to separate aluminium from minerals cheaply and also how to produce it on an industrial scale.
Almost instantly aluminium went from being the most expensive metal to the cheapest.
See, aluminium was always a commodity, but in the early days that commodity was scarce, and thus the value was high. When it became abundant, the value dropped massively.
It’s kind of the same with a lot of professions and businesses. For example, a few decades ago, programmers were highly valued and paid a lot of money. Nowadays, not so much.
That’s also why it’s so important to choose a business that’s not a commodity because then the only decision is “price”. However, if you already have a business and it has been commoditized, what do you do?
The answer is quite simple really. You just have to make it scarce again.
But that’s easier said than done.
Since you’ve read all the way till here, I’ll share one technique you can use today to get out of the race to the bottom.
That technique is to niche down and position yourself in a new category. It’s a technique that I learnt from the book “Positioning” by Al Ries and Jack Trout.
Simply, instead of appealing to the whole market like everybody else, you focus your energy on a smaller market segment and you market directly to the segment. Let’s see a few examples.
Instead of being just a coach, I choose to be an expert who helps service-based business owners grow their businesses online using simple but effective strategies. I’ve just gone from competing with every other business coaches to just a few.
If you don’t have a service-based business, I’m not the guy for you. If you want to stay offline, I’m not for you. If you want complex solutions instead of simple and proven strategies. I’m definitely not for you. On the other hand, if you match all three criteria, you know that I’m laser-focused on you.
Another example, a brand designer can choose to work only with one market vertical or industry. So, she can choose to work only with accounting firms, or law firms or photographers. By doing so, the value of her work goes up, as there are fewer designers who specialise in branding for law firms than generalists.
I could go on with examples, but I think you caught my drift.
If you need help to niche down and attract your ideal clients, you should check out my Service Business Blueprint. It’s currently free.
To get it, go to ServiceBusinessBlueprint.com
(And, if you already have it and you need help with the implementation, we should talk. Email me today to schedule a meeting.)