Hey on today’s episode, it’s a good one if you want to run a great business. We’re talking about how you become a niche player, the 800 pound gorilla in a business, and how you actually develop a niche and get known as the best in the business. You got to remember this and we talk about it on today’s podcast. Experts get paid and amateurs get crushed. There is tremendous importance to develop a niche rather than being a generalist and we give you six tips on how to do it, execute it on it and get known for it on today’s podcast. We hope you enjoy this one as much as we did doing it for you.
Welcome to Driving Success Podcast. I’m your host, Matt Monero. This podcast is sponsored by Commercial Fleet Financing in Dallas, Texas. We’re coming to you out of our CFF studios. Today’s podcast is entitled, “Experts Get Paid and Amateurs Get Crushed.” What do I mean by that, and what’s the primary takeaway for you? It means you have to develop a niche. You cannot be a generalist. You have to be specific. You’ve got to find out what problem exists in the marketplace that your competitors are not doing or are not good at, and develop your niche around that problem. The niche will get you rich. You have heard the saying, “A jack of all trades and a master of none.” Of course you’ve heard that saying, and this happens every day in business. Businesses are trying to be all things to all people and they can’t. You have to do a few things better than anyone else.
Now I get it. I know why we as business owners are afraid to be a niche player versus a generalist and the reality is we need revenue. Why on earth would we say, “No,” to business? And in that question lies the secret, the Holy grail, the Holy grail, that being a generalist is not as good as being an 800 pound gorilla dominating your niche. I’m going to give you the story that proves this out. When Commercial Fleet was started 25 years ago in 1995, I started it in a one bedroom apartment, dumpy apartment with a phone and a folding table and a yellow pages. I called anyone that I thought might need truck financing: landscapers, and electricians, and plumbers, and trucking companies, and construction companies and towing covers, anybody that I thought might need a truck.
After a while, a long while, years, it was awful, nasty, getting beat up in the marketplace, losing deals to the local bank and to the big banks and the publicly traded banks and the small credit unions and hell, losing deals all time until I began to start to figure this concept of niche out and started to look at our customers and say, “Who have we had the most success with?” And it began to actually play a unique story, a story that I didn’t expect. The story played out as follows. Our best customers were successful transportation companies in four industries: trucking, towing, construction and moving industries, who had 700 credit scores and above who bought used equipment. The data proved out this theory. So what did I do? I started calling our customers. I started calling successful trucking, towing, construction, and moving companies who had 700 credit scores, who bought used equipment that we financed and asked them, “Why did you buy used equipment?”
And they told me the story, “Used equipment’s tough to get financed. My bank doesn’t like to finance used equipment. The large finance companies, Wells Fargo, Bank of America, GE Capital don’t like to do used equipment, but I like to buy used equipment. Why? Because my customer doesn’t care. My customer doesn’t care whether I tow their car in a 2019 tow truck or I towed in a 2005 tow truck. You know what they want? The car towed. So what do I want as the business owner? Do I want a $500,000 truck or do I want a hundred thousand dollar truck? If my customer doesn’t care, why do I need to buy the most expensive truck?”
Bingo. Right then and there, it became the niche and Commercial Fleet in all these years later is known for doing good credit customers in four industries who buy used equipment. Our most successful customers who come back to us over and over and over are good credit customers who have been in business for a number of years, who love to buy used equipment. Now what happens? I just took a ton of competition out of the marketplace. The local bank doesn’t like to do used equipment and if they do finance used equipment, they do it with a big down payment and they do it for a short term. The shorter the term bumps up the monthly payments.
So if I could do a low down payment deal for a five year term instead of a 24 month or 36 month term, I became unique to the customer. Now we’re in the credit business at Commercial Fleet, so we have to be concerned about credit quality. The thought process from the big banks has always been, “Bad credit customers buy used equipment,” but our data didn’t prove that. Our data proved that good credit customers buy used equipment. So that’s what we went after and that’s what we do, and we do it pretty much as well as anybody, if not better than everybody; used equipment for good credit customers who have been in business in a while. We developed our niche. What are we great at? What are we better than the competition at? How do we serve the clients? How do we fix a problem that exists in the marketplace and how do we get paid?
You need to do the same thing in your business. What would be an example in the transportation business? Well, what if I only hauled dealer trades of class eight big rigs? If that’s the only thing I towed, then I get to market my business as the single greatest towing company on the planet for doing dealer trades for class eight big rigs. Nobody does that better than we do it. So what are the benefits? What happens when you become dominant in your niche? A million things happen and I’m going to give you six of them right now that hope continue to prove my point that amateurs get crushed and experts get paid.
Number one benefit of being in a niche: you can market yourself as the best in the industry. We cannot say we’re the number one finance company on the planet, but we could say we’re the number one finance company on the planet for customers that had been in business five years who have five units in the fleet and a 700 credit score who buy used equipment. I’m down with that. We’ve got tons of testimonials that confirm that.
Number two: you can train your people easier. Think about it. If McDonald’s has to train somebody on how to make French fries, and how to make coffee, and how to make shakes, and how to make hamburgers, and how to make a filet a fish, and chicken sandwiches and nuggets, it’s a tough thing to hire, but McDonald’s doesn’t do it that way. You know what they do? They take the high school kid and they pay him $12 bucks an hour and they say, “Here’s your job. You’re going to work the fryer later today, buddy. And you’re going to go to the walk in and you’re going to take the bag of fries. See how the bag says, ‘fries,’ on it? You’re going to pull it out. It’s on this shelf. It’s always on the shelf in the walk in freezer. You’re going to take it out and you’re going to open it. Here’s the knife that you’re going to open it with and you’re going to put this many fries in the fryer later and you’re going to drop it into grease.”
“You’re going to push this button. When the red button turns green and the buzzer goes, “Beep, beep, beep,” you’re going to lift it up and you’re going to shake it three times. You’re going to take the salt and you’re going to shake that three times, and then you’re going to dump it in the hopper. Then you’re going to take the scoop. You take the small scoop if they want a small fry, you take the medium scoop if they want the medium fry, you take the biggest scoop if they want biggie fry and you’re going to put it in a red container. Then you’re going to put it in the warming light and you’re going to do that all day long, my friend. At the end of the day, you’re going to get a check that clears and we’re going to tell you, you did a great job making the fries.”
You know what the customer says? “Man, it doesn’t matter what McDonald’s I go to. I can go to Lexington, Kentucky or Miami, Florida and the damn fries tastes the same.” By the way, when that high school kid doesn’t show up tomorrow, it ain’t a problem because you just hire another high school kid and you say, “Hey, here’s how it works here. You’re going to go to the walk in and you’re going to take that bag that says, ‘fries,’ on it and you’re going to pull…” You get it? It’s easy to train your people when you’re a niche player. It’s virtually impossible to train your people when they have to be a generalist. That also comes through on the telephone or in the face to face engagement. Your customers know whether you’re really great or if you’re just average and it’s very difficult to train people to be generalists and make them great as a generalist. It’s much easier to train people to be experts if you can train them on a niche.
Number three: you can attract money easier. We’ve experienced it in our business. Some of the big publicly traded banks come to us because they want to get into the tow truck financing business and they know that we’re experts in financing tow trucks. They want to get in towing, so they partner with us to buy our tow truck loans. It makes it easier to find niche money and big money. When you’re great and you’re an expert.
Number four: you can attract great people easier. I want you to think about this for a second. There’s a competitor who does a lot of the same things you do and they have a number one salesperson. That company gets bought out and a new management team comes in and the new management team, most of the time, you know what they do? They cut comp. So that top performing salesperson in the niche working for your competitor who just got bought out, got his or her paycheck slashed, their comp changed, or they cranked up the volume requirement, they cut the commission percentage, whatever, and that person just became unhappy.
You know what they do? “This is all I do, man. I only know how to finance tow trucks. That’s my job.” But guess what? Who’s the number two best tow truck finance company? It might be us. Who does that person call? Us. Why? Because he doesn’t have to change anything. He can still be the expert and get paid again. It’s easier to attract great people when you have a specific niche. It’s virtually impossible to attract great people when you’re a jack of all trades and you have experienced that. You have hired people who are okay at a lot of things and not great at anything and it creates chaos and confusion.
Number five: it allows you to attract great customers easier. Listen, if I want to buy a watch for my wife for Christmas, if my wife is listening, that is not a real example, all right? You’re not getting a watch for Christmas, but if I was and I wanted to buy a certain watch, I would not go to Craigslist for it. I would go to the dealer that specializes in this kind of watch that I know she likes, that that condition is always good and it’s going to be under warranty because if I’m buying a watch, I only buy used watches. Hell, never buy a new watch. It’s insane. Crazy to buy a new watch.
Buy a used watch, but I want it certified. I want it nice. I ain’t going to give my wife a scratched up old watch. I want it done from somebody who specializes in the type of watch that I want to get her. So I go to the expert. I go to the company when I type into Google, whatever type of watch it is with whatever type of accents it is in whatever area, Dallas, Texas, it’s going to pop up the expert. That’s the key piece. You get to position yourself as the expert.
The number six piece is: your clients expect you to know about their business. They really don’t want to train you on how they make their money. They want to make one phone call to someone who actually can answer their questions as an expert. There’s an amazing book on this topic called, “The Challenger Sale.” Guy’s name is Matt Dixon. If any of you are readers or audio book listeners, you want to pick this book up, “The Challenger Sale,” and in the book, Matt Dixon says that 57% of customers now do research on your company before they ever return your phone calls. So your sales force might be banging on these customers all day, “Hey, call me back, call me back, call me back. Call me…” 57% of those people are doing research on your company before they choose to return that phone call. That means when they’re researching you, they have to find what it is they’re looking for. What they’re looking for is no light trust, “Do I know these people? Do I like these people? Can I trust these people?”
How do you make no light trust happen? By being a freaking expert, by showing them that you understand tow truck financing better than anybody or you understand towing cars, towing class eight big rigs for truck dealers better than anybody. It’s what you do. So I get the fact that you’re scared about revenue, but I’m just here to help you and educate you and convince you that revenue happens when you pick the niche. You pick the niche by figuring out what are my customers want? What’s the problem that exists in the marketplace? What are my competitors not doing? What hole in the cheese can I begin to fill? The last piece of why that all works for you is because you forget this and I forgot it countless times. It’s a huge marketplace.
In our business of transportation equipment financing, Wells Fargo is the behemoth. This year, Wells Fargo will do $3.5 billion in transportation equipment financing. I’m not talking about commercial mortgages, or residential mortgage, or online banking, or warehousing or accounts receivable. I’m just talking about in our space, they will do $3.5 billion. We don’t need $3.5 billion. Heck, we’d like to pill about $50 million away from Wells Fargo. That’d be nice. Do you think if Wells’ goals of $3.5 billion and we need $50 million of market share, they care? It’s crumbs to them. That’s my point. There is enough business to go around. It’s a huge marketplace. It almost doesn’t matter what the niche you pick is. There is enough business to make it worth you being the 800 pound gorilla in that niche.
That’s the takeaway for today on Driving Success Podcast. Niche will get you rich. Experts get paid, amateurs get crushed. Your job is to figure out what is the problem that exists in the marketplace that your customers need filled that you can do better than anybody else and that the big boys aren’t doing well and bam. That’s how you create your niche. I always have to finish with this because if I won’t promote myself and I won’t promote our business and our podcast, why would I expect you to? We need you to help us. Share it, like it, comment on it, tell people about it. There’s 3 million truckers in the United States. Heck, I think 2.9 million of them ought to be listening to this podcast. Help us get the word out. Put it on the CB. Say, “Hey, anybody like podcasts? There’s a great podcast that’s out there called, Driving Success. It helps you run a better transportation business. If you like podcasts, listen to this one. We love this one. We would be grateful for that. Happy holidays, everybody drive safe and we’ll see all down the road.
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