How to Reduce Your Competition and Increase Your Pricing at the Same Time

When 2022 Tour De France champion Jonas Vingegaard of Denmark began the defense of his title earlier this year, 175 other cyclists started the race.

Other than simply making sure to avoid accidents, he could have cared less about most of those 175 cyclists. He wasn’t competing against them.

There was arguably only one other cyclist he had to be concerned about, Tadej Poga?ar of Slovenia. Poga?ar won the Tour in 2020 and 2021 and finished second to Vingegaard in 2022. Prior to this year’s Tour, these two cyclists dominated the 2023 racing circuit, combining for 21 wins.

When Vingegaard crossed the finish line at the Champs-élysées, Paris to win this year’s race, Poga?ar, sure enough, was second.

Depending on freak conditions, accidents, illness, or some other unforeseen factor, other cyclists could have challenged Vingegaard. In the end, however, Vingegaard only had one other primary contender for the yellow jersey he was seeking: Poga?ar.

The Problem with Positioning Too Broadly

If you’re a solo or small firm professional services provider, the competitive landscape in which you operate can work the same way, if you allow it.

If you operate as if everyone is potential client for you, then you risk being not particularly special to anyone. When you're not particularly special, your pricing isn't that special, either.

Once, I was on the phone with a consultant ready to launch his solo practice.

“Who do you serve?” I asked him.

“Businesses between $5 million and $50 million in sales,” he replied.

Later, out of curiosity, I looked it up. According to NAICS, there are over 300,000 businesses in the U.S. with sales between $5 million and $50 million. Can you imagine how many consultants there are operating in that space?

This segment isn’t a niche. It’s the entire field.

This consultant's response is the business equivalent of a Tour De France cyclist who sees himself having 175 competitors in the field. Who are the cyclists who would have this perspective?

It’s the ones at the back of the pack.

Beware of the Scarcity Mindset

This kind of broad positioning is a common fallacy when starting out in professional services, and I understand what’s behind this guy’s thinking. You’re afraid to be specific with who you help because you might exclude yourself from potential new business opportunities. This is a scarcity mindset in action.

Positioning yourself to serve everyone, if you’re brutally honest with yourself, is a bit selfish. There’s no possible way that this consultant, no matter how brilliant he might be, would be the right fit for every one of those 300,000 businesses. Each one involves a unique set of problems. Each one of them has an owner or owners who have their own personality, management style, and background. Yet this consultant was essentially claiming he was the right fit for every one of those businesses.

To be fair, he didn’t make that claim. If I had been rude enough to ask him why he thought he was qualified to serve such a widely diverse set of businesses, I’d like to think he would have told me he wasn’t.

The problem with such an overly broad positioning, is that it comes across as needy. He came across as a brand-new consultant who needed business to get things going instead of a seasoned professional who just happened to be starting up a new business. Unintendedly he seemed more desperate to get revenue than an expert patient to get the best-fit clients.

Reducing the Competition

When you specialize effectively, you reduce the competition, sometimes quite significantly. Bookkeeping for Painters is a North Carolina-based accounting firm whose niche is in its name, as they work with painting contractors across the country. According to their website, they have over 200 clients, which for the bookkeeping industry is significant. (The typical soloist bookkeeper, by comparison, has about 20-30 clients, according to industry data.)

If you’re a bookkeeper and decide to specialize in the painting contractor niche yourself, then your competition isn’t the 316,000 or other bookkeeping firms in the United States. Your competition is Bookkeeping for Painters and the other handful of bookkeeping firms who might specialize in painting contractors.

Further, with that specialty, you become the expert accountant among painting contractors. In doing so, however, you really haven't restricted your growth prospects. In this instance, according to industry data, there are over 178,000 house painting and decorating contractors in the United States. That's way more than you, Bookkeeping for Painters, and the other handful of other specialist firms (if they exist) can ever service in a lifetime.

When you operate from the Generosity Mindset, you surrender the idea that you can serve every client who comes your way. Here’s the irony of that generosity: You define your expertise so specifically that it becomes a client attractor. When people know what you do, the intangibles you solve for, and specifically who you transform, you become a magnet for the exact, perfect clients who want to work with you and who value the services you provide.

As the Niche Gets Smaller, Your Pricing Goes Higher

Who would you guess has a better shot at being able to command premium pricing in their field, the consultant trying to appeal to 300,000 wildly different businesses, or a firm like Bookkeeping for Painters?

It’s the latter, of course. When you have a specialty, you are the go-to resource for members of your chosen niche. You know all the particular issues and concerns that business owners in your niche are consumed with. You’re the professional who members of your niche go to when they’ve had enough of other providers who aren’t so deeply grounded in that niche as you are. They don’t have to explain their business to you. You get it, and they come to you knowing you will.

Sure, there are exceptions, but most of them will come to you knowing that you’re the proven authority, and they’ll need to be willing to pay the price for that expertise. They're ready to stop messing around and pay for the transformation they crave.

#competition #niches #pricing #positioning #professionalservices

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John Ray advises solopreneur and small professional services firms on their pricing. John is passionate about how changes in mindset, positioning, and pricing change the trajectory of a business and the lifestyle choices of a business owner. His clients are professionals who are selling their “grey matter,” such as attorneys, CPAs, accountants and bookkeepers, consultants, marketing professionals, and other professional services practitioners.

This post is adapted from John’s forthcoming book, The Generosity Mindset Method for Business Success: Raise Your Confidence, Your Value, and Your Prices, which will be released in December 2023. The book covers topics like value and adopting a mindset of value, pricing your services more effectively, proposals, and essential elements of growing your business. To receive updates on the book and its release and other information, go to thegenerositymindset.com.