Why handbags were our biggest mistake

The trouble with not being clear on who you work with and what you do for them is that it’s easy to be distracted by every opportunity that turns up. Ultimately you waste time and money on work that doesn't lead anywhere.

I know, because I’ve been there and I don’t want you to.

The most successful agencies we work with are those who are clear on what they do and who they do it for. The ones trying to be everything to everyone always struggle.

So where did we go wrong?

When I set up de Jong Phillips I wanted to bring big business thinking to agencies of all sizes. I wanted to offer a blue riband finance team to agencies wanting to scale at speed. We’d do everything you’d expect from a world-class finance function from bookkeeping and budgeting to representing the finance point of view at monthly leadership meetings.

How then, did we end up agreeing to run the payroll function for a luxury handbag company? 

The truth was it was exciting to be asked to work for a famous brand. Our fees from doing the work were around 3 times that of our next largest client at the time, and we thought it would be easy work. I mean how hard can it be to run a large monthly payroll? We run payrolls every month for our other clients and we are up-to-date on the tax law so we could pick this up no problem. Wrong!

What followed was a lost year for de Jong Phillips. Yes we made money on the job but to the detriment of growing our business.

Whilst we knew 80% of what we were doing, we had to spend a lot of time learning and keeping up-to-date with the other 20%. We couldn’t streamline the process in the way we could all our other jobs and, due to the nature of their business, there was little they could do to fit into our timelines.

We finally gave notice to the client and re-focussed on our core business. We filled the hole in our lost revenues almost immediately with other, more rewarding work, and were able to make great strides forward in growing our business by doing the right type of work with the right clients.

What are the benefits of knowing your niche?

We learned the hard way what marketers have been telling us for years.

Knowing your niche and focussing on it can make your agency more profitable. Here are 5 reasons why.

1. You stand out

You become known as an expert in your field and in turn this makes you more attractive to your ideal client.

2. You build trust

All your efforts, whether they be marketing, training or investment in technology, speak directly to your ideal client. This builds their confidence that you really do know them and can help them with their specific challenges. All of this leads to more rewarding relationships and happier clients.

3. You can charge more

You can add more value to your clients by gearing everything in your business towards one target client. You can leverage what you have learned from other clients in the same field so can charge more for what you do.

4. You save money

When you specialise you can focus all your energy on one area. You don’t need to know everything about everything. This saves you time and money.

When you are clear on what you do, and for who, you can build all the processes in your business around that. In turn, this makes your business more profitable, efficient, and consistent in what it delivers.

5. Easier decision making

It’s so much easier to make decisions around which opportunities to accept or decline when you are clear on who you work for and what you do for them.

What is your niche?

If you can answer these 3 questions, you’ll probably have just defined your niche:

1. What do you do?
2. Who do you do it for?
3. How do you do it?

A niche doesn’t have to be an industry. It could be a particular service that you deliver or it could be a specific demographic that you choose to work with. It might even be how you do the work that you do.

The more specific you can be when defining your niche the better.

How to choose your niche

It can be difficult to know where to start with when choosing a niche so here are a few questions to ask yourself to get started:

• Which of your existing clients do you work well with? What is it about them that you like?
• Is there a particular client that you have delivered great results for? How have you been able to do that?
• Is there a particular client type that you have ready access to? For example, because of your location or because of your existing network?
• What do you consider your key strengths are as an agency? And which problems can you solve for your clients?
• Is the niche you are considering is a profitable one and is it likely to be profitable in the long-term?
• How does the niche you are considering align with your overall company purpose? For example, if you have a passion for being an ethical company then it’s important your niche is aligned with this.

It’s worth knowing - and I’ll say it here in case you’ve not heard it before - just because you have decided to focus on a particular niche and advertise that fact, it doesn’t mean that behind the scenes you don’t do other stuff. You just don’t need to talk about it.

You can also have more than one niche or even change your mind down the line. The decision to niche is important but it doesn’t have to be permanent. Like everything else, it can and will evolve.

Want to explore the idea a little more?

If you are still unsure about niching and want to explore the idea some more, then sign up to our newsletter and look out for our upcoming blogs in this series about vision and purpose where we’ll be looking more at how knowing your niche, and your purpose, can make your whole business more successful.