Discover your blue ocean

blue ocean. Image: iStock.com/Trifonenko
Image: iStock.com/Trifonenko
A blue ocean. Image: iStock.com/Trifonenko
Image: iStock.com/Trifonenko

Imagine a world without competitors, where you are able to charge whatever you want and get it. Imagine having highly qualified personnel, customers who are patient and strong positive cash flow. Welcome to the premium market.

The premium market is a different world than what most of us operate in. In the bestselling book “Blue Ocean Strategy,” author W. Chan Kim paints a picture of the premium market world as a blue ocean. The blue ocean is an undisturbed body of water where the water is clear and where you have the entire ocean to yourself. Kim compares this scenario with the typical world most of us live in: a red ocean, corrupted, shark-infested and bloodied by years of vicious competition. I wonder why more companies don’t seek out blue oceans.

Recently, my wife and I were looking for a service provider for a window in our home that needed to be repaired. After spending some time on the internet and making some calls, I learned there was only one company in my area authorized by the manufacturer to make repairs on my windows. I called the company and learned there was only one person who handled repairs. Clearly, he has found a blue ocean, if not a monopoly.

I was prepared for what came next because I understood the normal rules of the red ocean no longer applied. We were in a blue ocean. I knew I would have to wait, and I did. Demand for this company’s services was strong, and there was a delay at every step along the way. I knew I was going to pay a premium, and I did. The repair cost was more than twice what I had anticipated it would be. However, I was completely satisfied after the repair was made. Let me explain why and you will have a glimpse into the mind of the premium buyer.

I could have made the repair myself if I had wanted to do even more research, order parts and spend my time on this type of thing. There are plenty of home repairs I handle myself, but this was out of my comfort zone, and my time is limited. Another option was to find someone else who was not authorized by the manufacturer, maybe a handyman who was available right away and much less expensive. None of these options appealed to me because I wanted the repair done correctly the first time by a professional. I knew that would come at a cost.

The communication was outstanding at every turn. Between phone calls, emails, text messages and smartphone photos, I was able to provide all the information requested for the repair without unnecessary visits to my home. This was valuable to me due to my heavy travel schedule. In addition, the repair was flawless. The work was meticulous. Even the cleanup was amazing. Overall, this was one of the most pleasant service experiences I’ve ever had. Needless to say, I would hire this company again in a heartbeat.

My experience illustrates some important lessons about the premium market. First, this repair service provider has positioned itself in a narrow market where there is little competition, aside from DIY (no time), unqualified handymen (no thank you) or imposing on my friends (not this time). Where can you find a market segment with almost no competition? They do exist.

Second, there’s less—or nonexistent—price pressure in the premium market, and it’s important to charge a premium price for a premium service. If this company hadn’t charged what it did, it may not have had the ability to be staffed with such a knowledgeable professional, and he may not have had the extra time to spend in my home to ensure that his repair was perfect and that he cleaned up after himself before he left. He may not have thought it was worthwhile to communicate with me the way he did. I paid a premium, and I’m glad I did.

Third, value is not the same as price. Benefit minus price equals value. In my case, I paid a high price, but I received an even higher benefit and so there was value. We often think of “value pricing” as pricing on the low end of the scale. Value can be created at any price level. Because we often are only working in highly competitive environments, we lose sight of the fact that price is not all that important in the premium market.

As you consider your strategic plan, perhaps going after a premium market makes sense for you. Where is a premium market? Where is your blue ocean? Look around. They’re not in the most obvious places. You’re not going to find one on every corner. Premium markets are by nature exclusive. They often require specialized training, certifications or authorizations. This is exactly what minimizes competition. Open your mind, do some brainstorming with your team and keep your eyes open. You just might find what you’re looking for.

Featured Image: iStock.com/Trifonenko

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