- How Unbundling Can Lead To Multi-Million Dollar Businesses
Try this marketing tactic to carve out your own niche
Photo by Jessica Lee on Unsplash
“There are two ways to make money, you bundle or unbundle.” — Jim Barksdale
Today’s marketplace is a ruthless battle for survival. You need differentiation to stand out and slash your way out of the jungle. You don’t need to reinvent the wheel or come up with some mind-blowing innovation, though.
Try the unbundling technique to find new ideas and capture market share instead. Your next big project might just be around the corner.
In the new passion economy era, successful businesses serve narrow niches. As opposed to industrial age corporates that provide generic services, passion brands deliver specific value which only they can offer.
Unbundling lets you do that.
Unbundling is a marketing tactic where a new market entrant strips away elements of the main incumbent’s product or service. The result is often a leaner provide that better meets the needs of disgruntled customers.
Simply put, unbundling takes a bundle (a combination of small offers or features into larger ones) and breaks it back down to smaller units of value.
Splitting an offer into small but hyper-relevant units of value ensures that each customer gets just what they need.
You might think bundling more features together is a good idea because it increases the perceived value of the offer. However, bundling only makes sense if the extra benefits baked into the offer are relevant to the customer.
The days when brands could jam long lists of features in customers’ faces, to lure them into buying a product that doesn’t truly fit their needs, are over.
Customers want total relevance. They’re not interested in fluff and clutter — they want lean.
When a solution is so big and does so much, bits and pieces of it can be broken off and become multi-billion dollar businesses in and of themselves.
The beauty is every industry on the planet can be unbundled. And you don’t need to create anything new to come up with a product that will be perceived as superior — because it will be more targeted.
You can apply the unbundling technique whether you supply physical or platform-based solutions.
For products and services
- Break down the constituent parts of the main player’s offer in the industry you’re targeting.
Listen to their customers’ feedback. Pay attention to negative comments about certain parts of the product or service.
Iterate on the competitor’s offer based on that feedback. Take away elements customers don’t value or add features they want but can’t find in the existing offer.
Amazon reviews are a great place to start. Zone in on the top products in your category and review lukewarm customer feedback. Look for ways to address the feedback.
For communities and platforms
- Analyze the large social media and professional platforms with engaged audiences.
Spot specific groups that could be better served via a bespoke, smaller-sized platform.
Build the platform that will best serve that community.
More often than not, the audience you seek to serve is already hanging out somewhere. Find out where that is and reach out to them.
A great way to look for communities of interest is through subreddits and Slack groups. These channels tend to have active members who care about their subject matter.
For example, if you wanted to reach copywriters and business owners, you might use:
- r/Copywriters: “A subreddit for learning, discussing, critiquing, and sharing resources about, advertising copy… BY copywriters, FOR copywriters.”
r/Entrepreneur: “A community of individuals who seek to solve problems, network professionally, collaborate on projects, and make the world a better place.”
r/SweatyStartup: “A hub for entrepreneurs of all kinds with a skew towards regular old-fashioned businesses.”
Top Slack channels for marketing and copy-related topics.
Immerse yourself in these groups to understand their needs, challenges, and frustrations which you could help solve. Monitor the conversations and see if there’s a pattern.
If many users tend to talk about similar issues, you could both 1) validate the demand for a solution that solves this issue, and 2) find a testing ground of early adopters who can give you feedback.
You can also scan the fastest-growing communities via Redditlist to gauge interest levels and target those groups directly.
The key is to find an issue that’s specific enough.
Don’t build a course on “how to get fit”. Do one on “how to get fit for moms after giving birth”. Instead of an e-book about healthy diets, write a book about healthy foods for diabetics.
Generic segments tend to be much larger in size, but have much lower engagement rates. The more engaged the niche is, the more your offer will resonate.
Harry Dry, the creator of the case-study platform Marketing Examples, launched Yeezy Dating. He scanned the internet to find where Kanye West fans hung out.
Turns out, there are a few places such r/Kanye (which has 250K members) and r/HipHopHeads. The size of those groups proves there is a market for fans of Kanye West’s music.
Those are likely hardcore fans who devour any content related to the artist. They can also generate network effects for Yeezy Dating because the group has a vested interest in other fans joining.
The key factor is the site wasn’t a dating offer for music fans, or even hip hop fans generically. It was specifically targeted at Kanye West fans. Because it’s so unique and taps into a passionate niche, it’s easier to get the word to spread around.
The internet is loaded with broad dating sites and apps like Tinder, Match.com, etc. There are sites that specialize in certain religious groups (Jdate, Muslima) and sexual orientation. Yet no one serves a group of people as passionate about Kanye West’s music as this community is.
Dry spotted a gap and unbundled the dating industry to serve a super-specific group of fans and received major coverage doing so.
Facebook unbundled the big blue app by breaking it down into smaller apps. This allows users to select what feature of the wider Facebook ecosystem they’re most interested in.
This way, they can access exactly what they need and nothing extra.
The “sub-bundles” include:
- Facebook Groups, Slingshot, Rooms, and Riff: for individuals and creators who want to stay in touch and collaborate.
Facebook Pages Manager, Adverts Manager, and a range of API-specific apps: for business owners and marketers who promote their brand on the platform.
Smaller apps serve very different segments who’re looking for different benefits from their use of the platform. This lets users define what they get notified for and have a distinct interface for planning ads, for instance.
It’s unbundling a big offer to make it more relevant to individual users.
Tight-knit communities within larger ecosystems can be unbundled, too.
Reddit is a goldmine when it comes to finding super-engaged groups and understanding what makes them tick.
Some examples of successful businesses built out of Reddit groups:
- Discord was built on the back of gaming subreddits.
Grailed is a men’s fashion brand that started out of r/malefashionadvice.
Imgur was created as a tool to share images on Reddit.
Affiliate site GarageGymReviews.com was built on top of fitness communities r/bodyweightfitness, r/scoliosis, and r/posture.
These companies target a specific group and build solutions that meet the group’s needs. This way they can make sure there’s real demand and validate their product quickly.
The point is not to compete directly with larger platforms like Reddit — but to better serve the constituent communities that live on them.
To carve out your own niche in competitive industries, think about how you could provide hyper-specific value to a group of highly engaged fans.
Don’t underestimate the power of a passionate tribe that shares a common, specific interest.
Unbundle your competitors’ products and communities to provide exactly what customers want, and they’ll be willing to spread the word. Amazon reviews for physical products and subreddits for communities are great places to start.
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- Date of publication:
- Fri, 06/11/2021 - 10:01
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