One of the best ways to become a market leader in your luxury real estate marketing practice is to carve out a new niche or create an entirely new market category. Why not start out as #1?
There is a huge competitive advantage in being the first in a freshly defined market segment. For example, have you ever tried or heard of 5-Hour Energy, the caffeine and vitamin liquid concentrate that comes in a small plastic bottle and is sold over the counter?
Seven years ago there was no such niche or sub-category of beverages. This energy shot trend was started by 5-Hour Energy. They dominate the category with an 80% market share, according to trade publication, Beverage Digest. Their annual sales are about $1 billion. The next closest competitor, NVE Pharmaceuticals has a paltry 5% market share. 5-Hour Energy, as a brand, has achieved the status of “category killer”.
Some of the best niches are not obvious. In our recent blog series, So You Want to Be a Market Leader-Part 3, we used the example of becoming the expert in ski-in/ski-out properties within the larger marketplace of the entire ski resort town. This is a very narrow market niche, but a potentially lucrative one as these kinds of properties tend to be the most expensive.
Let’s take this example a few steps further. Before you declare yourself the expert, you need to have some ski-in/ski-out property sales (at least one) under your belt to have some credibility. Then, when you take it upon yourself to define or carve out a niche where heretofore the niche was not perceived as a separate area of specialization amazing things happen.
Suddenly, you are perceived differently and so is the competitive landscape. Because you are the first, you literally cause your name to be identified with the new category that previously did not exist. Once this takes place it is very difficult for your competition to dislodge the #1 position that you have secured in the minds of your target market.
When people indentify you as the ski-in/ski-out maven, they will refer you to other owners of such properties (who they probably know very well) as the expert. If you were the owner of a ski-in/ski out property, wouldn’t you want to be referred to the leading expert in this field to list your home, instead of the generalist? That is what branding is all about.
In your luxury real estate practice, the sharper your focus the more you become an expert and the more likely you are to succeed. Concentration in your chosen area gives you a command not only of the nuances of the market segment itself, but also of the mindset of your target market. The depth of your knowledge and your certainty about your niche becomes palpable to potential clients. The sharpness of your focus also enables you to discover opportunities that completely elude your competition. If you are passionate about your niche, you will not need energy shots to keep you awake, lift your spirits or stay motivated .
You may think that it is scary to be so focused within a niche because you have to sacrifice other general business if you give your niche your undivided attention. But, in time your name can become extremely well-known and, ideally, synonymous with the category itself. That is when you become the undisputed category killer. If you sustain your focus, you can become so formidable as the market leader that your would-be competition will not even bother to challenge you.
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