Thou Shall Divide and Conquer

Core expan­sion is far dif­fer­ent than exten­sion. Exten­sion is often referred to as fran­chis­ing, licens­ing, line exten­sion, or branch­ing out — also known as con­glom­er­at­ing. In this con­text, I am refer­ring to expan­sion by division.

If you’re a spe­cial­ist in your field — which I hope you are after read­ing this book — and you offer only one type of ser­vice, you can expand from within by divid­ing your core (your prod­uct or ser­vice) into mul­ti­ple, smaller components.

This helps to do 3 things. 1) It doesn’t take away from your cat­e­gory or spe­cial­iza­tion. 2) It increases your hit ratio when tar­get­ing clients, since some of them might be inter­ested in your entire pack­age while oth­ers may be inter­ested in only a por­tion of it. And 3) it increases the aura of exper­tise you project because you refrain from spread­ing your­self too thin.

McDonald’s are reputed world­wide for their ham­burg­ers, pure and sim­ple. Ray Kroc was a milk­shake machine sales­man and his clients were mainly fast-​​food restau­rants. One day in the mid 1950’s, Ray stum­bled onto the lit­tle drive-​​in restau­rant in the Amer­i­can Mid­west run by a cou­ple of broth­ers who were cook­ing ham­burg­ers in a dif­fer­ent way: the assembly-​​line method.

He had an idea and the result became the joint ven­ture with the McDon­ald broth­ers that today has lit­er­ally rev­o­lu­tion­ized the entire fast-​​food industry.

In the begin­ning, McDonald’s had no more than three sim­ple items on their menu: ham­burg­ers, fries, and shakes. Up to this day and hope­fully in the future, you will never find a hot dog at a McDonald’s. But now they have ham­burg­ers in almost every food cat­e­gory possible.

They offer ham­burg­ers, cheese­burg­ers, chicken burg­ers, fish burg­ers, dou­ble burg­ers, rib burg­ers, and on and on. They have small fries, medium fries, large fries, and super-​​size fries. That’s the power of core expansion.

Nev­er­the­less, how does this apply to you? Let’s say you are a pro­gram­mer and you offer con­sult­ing work. For instance, you may pro­vide con­sult­ing, research, pro­gram­ming, imple­men­ta­tion, test­ing, hard­ware instal­la­tion, train­ing, cus­tomiza­tion, upgrades, licens­ing — and the list can go on and on.

Obvi­ously, all of these ele­ments may prob­a­bly be part of one global pack­age that relates to an area in which you are spe­cial­ized. But by divid­ing your core prod­uct into indi­vid­ual com­po­nents, you may not have expanded in a direct sense but you have, how­ever, expanded your possibilities.

Sim­i­larly, you may offer an entire pack­age right now but fail to rec­og­nize its many dif­fer­ent com­po­nents — parts that can be indi­vid­u­al­ized and offered sep­a­rately. Look at what you cur­rently offer. Take a notepad and write down every lit­tle com­po­nent that’s a part-​​and-​​parcel of what you offer. Then see if each part can be mar­keted, sold and ser­viced sep­a­rately and individually.

Once done, put names on each “divi­sion,” and include them in your col­lat­eral mate­ri­als. Using the pre­vi­ous exam­ple, you could develop your own research divi­sion, devel­op­ment divi­sion, imple­men­ta­tion divi­sion, train­ing divi­sion, etc.

The word “divi­sion” means exactly what it says. And by doing so, you may stum­ble onto clients who may need the entire pack­age and oth­ers who may only need a part of it — like, for exam­ple, a train­ing specialist.

Keep in mind that you shouldn’t digress from your spe­cial­iza­tion, but try to remain within your core and expand from within. Of course, while you may have nar­rowed your niche, through divi­sion the demand for your prod­ucts or ser­vices will likely increase, even with prospects out­side of your tar­get mar­ket since you are now cater­ing to dif­fer­ent mar­ket segments.

You can also add new prod­ucts or ser­vices to your port­fo­lio that cater to your niche. Look at dry-​​cleaners: beyond dry-​​cleaning, they also offer tie clean­ing, shoe repair, tai­lor­ing, win­ter cloth­ing stor­age, and so on and so forth.

If you do expand in such a way, don’t just leave it at that. Put names on your divi­sions that specif­i­cally describe each one. Like I men­tioned in the first com­mand­ment, give each divi­sion a spe­cial brand or sug­ges­tive name.

Plus, aside from divid­ing from within (i.e., your prod­uct or busi­ness), you could also do it the other way around by divid­ing your clien­tele into groups. While they may still be part of your niche, you have clas­si­fied them into dif­fer­ent cat­e­gories, which will increase your hit ratio.

In my long-​​term con­sult­ing busi­ness, I make a dis­tinc­tion between three types of clients who might need my ser­vices. For instance, there are those who are low-​​key and only seek to increase their cash­flow. There are also middle-​​of-​​the-​​road clients who want to pos­si­bly expand in staff, size or scope. And then there are entre­pre­neur­ial types who want the whole “ball of wax”!

What’s the ben­e­fit in doing this? A con­ser­v­a­tive client in need for some mar­ket­ing assis­tance, but fears that he or she will go over­board in doing so (or is low-​​key, such as a doc­tor or lawyer), may be attracted to the fact that my ser­vices also cater to his or her spe­cific needs as well.

And finally, let’s say that your pack­age is insep­a­ra­ble. In this case, there is still a por­tion that can be expanded by set­ting up strate­gic alliances with other spe­cial­ists (I will deal fur­ther on this in Com­mand­ment #10).

For exam­ple, you’re a wed­ding plan­ner offer­ing a pack­age for help­ing cou­ples pre­pare for the most impor­tant day of their lives. How­ever, when it comes to sta­tionery such as wed­ding invi­ta­tions and reply cards, you use a local printer with whom you’ve set up some kind of strate­gic alliance.

This local printer gives a spe­cial price break offered exclu­sively to your spe­cific clients as a way to cre­ate more busi­ness. And, more than likely, the printer is glad to help since he or she knows that by doing so you will con­stantly send that spe­cific printer more clients. It’s win-​​win.

You can call it your “Incred­i­ble Invi­ta­tion Incen­tive,” which includes the plan­ning and print­ing of wed­ding invi­ta­tions. (Also, the design, mail­ing and response man­age­ment of those invi­ta­tions could also involve the co-​​services of a graphic designer, mail­ing house as well as the printer.) You see, you are not com­pet­ing with the printer but both of you are seek­ing a same market.

That’s it for now. Ulti­mately, remem­ber that by divid­ing your core you will para­dox­i­cally mul­ti­ply your chances of get­ting more busi­ness. Each one of your “divi­sions” can cater to its own indi­vid­ual niche. If you own and oper­ate mul­ti­ple niches, when added up they can become very prof­itable for you.

About the Author

Last 5 Posts By Michel Fortin

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