2 Roads to a Truly Special Company

Specializing in one thing means you can do better than everyone else because there's no other person or company that knows as much about your product or service. Better yet, specializing in your "one thing enables you to recruit and/or train specialists in your field, improving the quality of your work. That leads to happier customers who buy again and refer their friends.

Specialists often grow faster than generalist companies because they spend less on marketing. This leads to better profit margins and, ultimately a more valuable company! But what if your customers expect you deliver all types of offerings?

That’s where the “road less travelled” comes in and according to the poet Robert Frost, “that has made all the difference.” This road of specialization involves focusing on a specific industry.

Why You Should Become an Industry Expert?

There are several benefits to serving a specific industry. First, you’ll learn the language spoken in that sector. Every business sector has its own unique language, and being able to speak the jargon can benefit your company. Customers will sense that you are experienced, knowledgeable, and able to navigate the space.??

Focusing on one sector also helps you stay current with industry trends, and that will help you to identify new opportunities for your customers sooner than a competitor who serves multiple industries.???

More importantly, industry specialization allows your team to become experts in that sector. You may be an expert in an industry, but chances are, they’re not (particularly new team members). Focusing on a sector accelerates how quickly your staff can become fluent in your chosen market. This will allow you to delegate customer relationship management faster and more successfully.

How Specialization Led to a 20x Increase in Revenue?

For example, consider the story of UK-based founder Raman Sehgal, founder of a small marketing agency called remarketing that he started in 2009. By 2015 the business grew to the Pound Sterling equivalent of around $650,000 CDN in revenue, but the company was losing customers as fast as they were winning new ones.??

Frustrated with the company’s lack of progress, Sehgal decided did a complete analysis of his business. He found that ramarketing’s?most valuable?customers (low maintenance, sticky, high gross margin, etc.) were in the?pharmaceutical industry. Sehgal pivoted his business to specialize in the pharmaceutical supply chain.?

This specialization triggered a sequence of positive events for ramarketing.?

By specializing, ramarketing could stay up to date with industry trends, learn the jargon, and ultimately improve the quality of their work. The resulting increase in customer satisfaction led to more referrals and a strong reputation in the sector. ?

Employees began to understand the intricacies of the pharmaceutical industry, especially the many rules and laws to adhere to. Understanding the regulations allowed Sehgal’s employees to better serve their customers. ??

The business thrived.??

The Evidence is Clear

Sehgal’s once stagnant marketing agency grew from around $650,000 CDN in turnover in 2015 to over $13 million CDN by 2022. That is when Sehgal accepted an offer from NorthEdge Capital of more than 10x EBITDA.?

Sehgal’s bold decision to specialize in the pharmaceutical industry led to a 20x increase in revenue and, ultimately, a lucrative exit.

Narrowing your product or service line is the most common way to increase your company’s value but specializing in one industry carries many of the same benefits.

Do you want to improve the value of your business?

Please reach out to us if you’d like to discuss our proven methodology for maximizing the value of your business.