When to Develop Neptune Services

Neptune Memorial Reef” is a branded service of SCI Corp, whereby a loved one can be cremated and laid to rest at the bottom of a reef off the coast of Miami, FL. As a Midwesterner this type of funeral service might be considered rare. Although, I’m not in the funeral home business, I think this is a pretty neat service. There is a place for these super specialized services. When considered within our portfolio, I affectionally call them “Neptune Services” as a nod to this offering. Any teammate that cares to dig deeper might find this blog post and grasp a deeper appreciation for how and why I use that name.

For our blog subscribers, many of you are fellow business owners. When is it appropriate to create a super-niche offering? How do you know when the time is right? What prevents this from becoming a huge distraction or just another low margin, engineer-to-order offering in an otherwise smooth make-to-order operation?

Two cases and one method: Cases: A dense population or broad geographic footprint justify development of a Neptune Service. There is but one method, and that is customer centric.

  1. Dense Population : if your business is located in a tier 1 city your ability to compete with a broad, under differentiated service offering is weak, and grows weaker as you diversify. Find the interstice and strike with more might on the narrower space. Your weaker competitors will be fearful to niche down so tight and will appear bland to your customer. My example? A body shop is broad. A autoglass shop is narrower. Ballistic glass for police is a niche. The customer centric method requires the founder or owner to seek out the largest, most profitable customer among the populous that has a deep pain that you can resolve profitably. Then, hone your offering to them, with them. Once nailed, build processes to go to the most similar to them.
  2. Broad Geographic Footprint: if your business has many locations spread across numerous tier 2,3 or smaller communities you can get away with a broad offering. Think of Wal-mart attacking the small towns of the Midwest. Or today, the Dollar General store has gone to even smaller towns. They essentially hermit crab into a community and root in. In service industries, a niched down Roto-Rooter cannot survive in a town of 10,000 or fewer. A generalist plumber makes more sense in these small towns. But, if you own a company like SCI Corp with many funeral homes all over the nation, you can justify aggregating the few a decade ocean burials into a kitted system and printing that in every brochure of every funeral home. When the customer asks, you can send along the order form to HQ and they guide you through your local role in the offering. The customer centric method requires the leader of these multi location service companies to seek out the unusual with margin and present to others. This typically happens in one fairly progressive location that has the talent and circumstances to start it. This entreprenurial spirit is fed and expanded across the network.

More times than not the phenomenon above must iterate until the processes are honed. This trial and error period may appear less profitable at first because of the overhead demand, but the project owner has rough idea of how the contribution margin works and the leverage available if it is nailed. These product and service launches can expand rapidly and add meaningfully to the whole, or they can be pruned without much fanfare.

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