A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty

If you’re one of the many webmasters feeling hammered by Penguin and Panda, you’d be forgiven for thinking the best opportunities in search are long gone. Perhaps it’s all gotten just a bit too complicated.

In reality, internet marketing is still just a toddler taking baby steps. Opportunity abounds. It’s a case of looking for it, finding it and capitalizing on it.

So how?

In this post. we’ll look at the nature of opportunities, and how to spot them.

People Always Have Problems

If you look at these stories, you’ll notice a common thread.

Honest Tea solved a problem. People wanted bottled organic tea. VMail solved a problem. Small businesses needed a cheap VoIP solution. Ben and Jerry solved a problem. There was no ice cream shop in their town.

Opportunity is the chance to solve a problem. To fill a need. If no one is solving that problem, and that problem is a difficult one the customer, and the customer is desperate to solve it, then the stronger the marketing opportunity will be.

Are there any fewer needs than there were last year? Than before the financial crash? There are just as many needs, as there are just as many people, and as life grows ever more complex, their needs become greater. Their needs may change. They might want fewer luxury products and better deals on everyday products. Next year, it might be the other way around.

Where There Are Problems, There Are Marketing Opportunities

We find marketing opportunities – good ones – when there is a high probability we’ll satisfy a market need, and do so profitably.

• Is it about finding a keyword with high search volumes?
• Is it about doing what the the successful people are doing?
• Is it about doing what everyone else is doing, but just being better at SEO than they are?

Possibly, but this type of thinking is more to do with tactics than opportunity. A marketing opportunity is better evaluated for a higher level. Take the 5,000 ft view.

Ask:

• Can I supply something in short supply?
• Can I improve on an existing product or service in way that is considerably superior?
• Can I supply a genuinely new product of service?

For example, there is a market opportunity for search engine news. Is it a good opportunity for a new entrant? Probably not, as this market is saturated by established players. The audience already have their needs met.

However, there might be better opportunities for news on, say, 3d printers, or some other emerging technology where there is a need, but it isn’t well served. Of course, these opportunities can narrow over time as more and more people see the opportunity, and move into the space.

Perhaps the most lucrative opportunities score highly in each area. They are in short supply, they are relatively new, and you can improve on something people already do.

A good example would be the iPhone. When they came out, there was only one iPhone, they were new(ish) idea for the target market, and they integrated functions people already performed, but did so in a superior way. It’s little wonder Apple could charge such high margins on them, and it took competitors a long time to catch up. Anyone releasing a smartphone today would have to improve on those areas – price point is probably the obvious opportunity – in order to be able to compete.

How To Nail Down The Opportunities

There are various methods marketers do to test their conceptions. Let’s look at three.

One method is the problem detection method. Try asking people if they have any problems with their existing service. For example, a prospective SEO customer might say “I’d like to spend more on SEO, but I don’t know if my spend will be worthwhile”. The opportunity is to figure out a way to show it will be worthwhile if the customer spends more, which might involve offering a money-back guarantee, or a pay on performance arrangement, or some other way to improve that problem the customer has with existing services.

Another way is the ideal method. Ask the customer what would be their ideal product or service. Often, customers will describe fanciful things, but listening to their whims can help you think of products and services you may not have thought of yourself, as it’s easy to fall into the trap of thinking within the constraints of your industry. At one time, a customer may have wanted no time delay between ordered a meal and receiving the meal. This probably sounded like an impossible ideal to a restaurateur at the turn of the century, used to waiters and a kitchen staff, but an opportunity to Mr McDonald, who thought more in terms of an industrial process. And Ray Kroc scaled it from there.

Another method is the consumption chain method. You track the consumption of the product or service from start to finish, and see if there are any steps in the chain that can be improved upon. Questions to ask are how people become aware of the product or service, how do customers make their purchase decisions, if they need to consult someone else to make the purchase decision, how they get the product or service, where they store it, how often they use it, and so on. At each step in the chain, there is a chance to make a change, to optmize, and to make better.

We’ve only touched on the ideas on ways to seize opportunities. How have you discovered opportunities in the past? What is your process for spotting new opportunities? Please add them to the comments!

What are you best at?

If you happen to be Google, you’re pretty good at search. And infrastructure. It remains to be seen if you’re any good at social media. It’s fair to say you weren’t much good at Answers, Catalog search, Page Creators, Audio Ads, Wave-ing and Buzz-ing.

The Google example demonstrates that no one can be good at everything, even if they do hire a lot of smart people and have billions in the bank. People, like companies, are good at doing some things, and are okay, or poor, at everything else. Not because they can’t do other things, but because they don’t have the time, inclination or disposition.

This truth has led to specialization. Individuals specialize. Companies specialize. Countries specialize. In economics, this is the principle of comparative advantage and it is the basis of trade. We do the things we’re good at, and buy in the things we’re not so good at, or don’t want to do.

We Can’t Be Good At Everything

Like Google, we can’t be good at everything.

Many small businesses make the mistake of trying to do everything, mainly due to lack of resources. However, the opportunity cost of trying to do everything can mean they end up being not very good at doing any one thing. This approach can make them uncompetitive.

Just because we can do something doesn’t mean we should.

Like many web professionals, I can do some coding. Some web design. A bit of this. A bit of that. But I know there are people who are way better at those things that I am, so I let them do it. If I focus on what I’m good at, then I can make money doing that, and buy in the skills I need.

There are many benefits to specialization. For starters, it’s much easier to build a reputation or brand. Who is the go-to guy for Search Engine News? Many people would answer Danny Sullivan. Who is the go-to guy for search patents? That would be Bill.

Another advantage is that specialization leads to omptimized and more efficient processes, and therefore lower costs. The specialist can optimize and improve their approach to a niche activity in a way a generalist seldom can because their focus means they are more likely to see the details.

Most of us occupy very crowded marketplaces, which makes it difficult to stand out as a generalist. Brands, and reputations, can get confused and diluted if businesses spread themselves over multiple service areas. Virgin gets away with it – mainly because of the brand that is Richard Branson – but they are an exception, not the rule.

Not that this article is about the merits of specialization vs being a generalist. More a case of optimizing a business to focus on those areas that are most lucrative, and literally weeding out everything else.

Weeding Out Clients

A lot of companies, like a lot of people, live paycheck to paycheck. They don’t want to turn down any business, because the more clients, the better, right? The more opportunities, the better?

Not all clients are equal. Not all opportunities are a good fit. A client who costs a lot to service, who doesn’t pay their bills on time, who makes life difficult for you is probably not a client worth having. Sure, they might help keep us going to the next paycheck, but this is not an optimal way to run a sustainable business long term. Such clients present an opportunity cost i.e. we could be working with better clients, be making better money, and honing our service around mutual benefit.

For this reason, many companies make a habit of firing clients, or never take them on in the first place.

For example, last year, I received a letter from my accountant. She advised me they were reviewing their business and letting a lot of their clients go, although they were still happy to work with me, and asked that I have a chat with them if I had any concerns.

I did have a chat with them, mainly to confirm my suspicions.

They were deliberately getting rid of 50% of their clients. They had figured out who their top clients were i.e. the clients who took them the least time to service because their books were in order, and they eliminated the rest i.e. those clients whos books were a mess and were generally a pain to deal with. They downsized their business, reduced overhead and now tell me they are making more money than they previously were due to their optimized cost structure. They also appear to be playing a lot more golf!

They optimized their business, became more profitable, and have a lot more time because they made a point of figuring out the core of their business, and saying “no” to everything else.

Say No

Saying no can be very powerful. Prospective clients seem to respect this more, not less. There is something very appealing about a service that is exclusive and beyond reach. It signals a level of confidence that can be attractive.

Exclusive positioning is not just done for the sake of it. It’s a way to filter clients in order to find a good fit, which is especially important for small companies, as they have less resources available to carry bad risks. If we can figure out a client need that we know we can service well (specialization), with sufficient margins for us to be enthusiastic, and the client gets the value they were looking for, then everyone wins.

Let’s say running a PPC bid management service earns an internet marketing company the most money with the least effort. Let’s say they also do web design, but this is a lot more work (read: higher cost to service), and the margins are lower.

Would this company be better off saying “no” to new web design business? Quite possibly. They could dedicate more time to PPC, their PPC processes would get more refined through increased specialization, and they would likely be better placed to compete in the PPC space as their brand and attention becomes more focused. They could let go of the web designer, thus reducing overhead.

Granted, there are many factors to consider, but the question is this: are some areas of your business being serviced only because you can? Or does it make sense to focus on the areas where there is best fit? i.e. better margins, lower costs, most productive relationships – even if that means letting some clients, and even some staff, go?

Could we get better at saying “no”?