Double Your Salary With This Simple Strategy
I recently attended a personal finance conference keynoted by Suze Orman. As always, I found her advice to be clear, candid, and insightful. She covered a wide variety of topics and encouraged the audience to ask questions.
One twenty-something stood and asked what she should be doing to achieve long-term financial security. Suze first encouraged her to participate in her employer's 401(k) program, and to make sure she contributed enough to receive the employer's maximum match amount. Then she offered some career advice. She essentially said to work harder than everyone else. The current competitive environment demands it. That means working extra hours, and keeping up with changes and innovations in your field — all of which are happening at an increasingly rapid pace.
I agree. Working harder will help to keep you near the head of the pack.
But I would add one more thing: Also work smarter. And one way to do that is to find a niche. If you can do that effectively, you won't just keep up with the pack, you'll separate yourself from it. And that could translate to a big boost in career earnings.
It's All About Positioning
Finding a niche means specializing in something that is distinctive and valued — it means uniquely "positioning" yourself. The concept of positioning was first introduced by Jack Trout who, along with Al Ries, wrote the 1981 classic Positioning: The Battle for Your Mind. It remains one of my favorite marketing books.
Car manufacturers position their brands (Honda reliability, BMW handling, Volvo safety, Lincoln Continental luxury). So do department stores (Wal-Mart is all about low prices, Target is a middle market chain, Neiman-Marcus is high-end). In fact, almost anything can be positioned — countries, cities, books, companies, departments within companies, and most importantly, people.
The challenge, of course, is in choosing the right positioning. To do this, begin by thinking of ways to specialize. Take hardware stores for example. Big box home improvement chains like Home Depot and Lowes have put most traditional mom and pop hardware stores out of business. After all, how can the little guys possibly compete with them? Well, when you think about it, the box stores are generalists. Each is a jack of all trades but master of none. So one way a mom and pop can compete is to narrow their focus and specialize in one type of product or service and do it exceptionally well.
Case in point: When I need anything plumbing-related I don't go to the box chains; instead I go to a specialty plumbing supply store 20 miles away. I've been their loyal customer for over 25 years because when I walk in the door with a broken fixture, they know the make and model number before I get to the counter, they always have one in stock, and they go to great lengths to explain how to install it. I'm happy to pay a premium price for that kind of expertise.
Positioning can (and should) also change as conditions change, or if the initial positioning doesn't work. For example, as more competitors emerged and alternative media and delivery methods became more widespread, UPS re-positioned itself from a mail and package delivery company to an expert in logistics. It now consults major corporations and even governments on ways to make their transportation and distribution methods more efficient. By contrast, the U.S. Post Office hasn't adapted to the same marketplace changes. It hasn't changed its positioning, so it is antiquated.
How to Position Yourself
What about positioning a person? How do you position yourself uniquely as an employee? The same principle applies. Start by thinking of ways to develop and offer a specific type of expertise or special skill that adds value compared to other employees.
For example, early in my career I joined a market research department that did things similar to other market research departments. We did customer surveys, created reports on industry trends, and wrote up competitor profiles. These reports and analyses contained useful information, but there was never any attempt to show how to use the information to help our company become more profitable… to either save money or increase revenue. As a result our department was viewed merely as paper pushers, and that meant we were always at risk of being downsized.
So I set out to make the connection between research data and company profitability. Doing that would make the research actionable and relevant to field sales people and to senior management.
I began meeting with a colleague in the finance department to learn which of our customer segments and products were most profitable and which ones were least profitable. I learned that 20% of our customers generated 80% of the company's profits. We used that information to develop programs that attracted and retained more of the profitable customers while also wasting fewer resources on the unprofitable ones.
With this focus on profitability we re-positioned the market research department from a report-generating cost center into a direct contributor to the company's bottom line. Just as important, by doing so I was also able to reposition myself. My specialty became profit-focused marketing activities.
That opened up opportunities for me, including an invitation to work for another department that offered greater advancement opportunities. I owed it all to finding my niche.
The Salary Connection
Did my move to the new department translate to a higher salary? Actually, yes. Within three years my salary doubled. And I found myself in a niche that was highly valued both inside and outside the company, which created even more career advancement opportunities later on.
Physicians who specialize earn, on average, 50% more than General Physicians
Source: Medscape Physician Compensation Report 2014; Leslie, Carol Peckham
Specialization pays. Not just in my case but as a general rule. For another, broader example, let's take a look at the medical field.
As you can see in the accompanying table, physicians who are generalists — family doctors, or "GPs" — are near the bottom of the chart when it comes to compensation.
Specialists, on the other hand, earn on average 50% more. The top two specialists, cardiologists and orthopedic physicians, typically earn 100% more.
So find your niche. It will take your career — and your salary — to a different level!
What's your niche?
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