PI Niche Method 301


Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
American Marketing Association 2007

A critical element of the above definition is “value”. If you provide limited or no value for your customers you are going to have big problems. Additionally, if you are a “me too” business (a business that offers and provides nothing different than the PI down the street) you are going to have bigger problems. You will be viewed as a “commodity” and when you cannot differentiate yourself among the competition your perceived value decreases. Your customers will in turn make buying decisions solely based on price and the lowest bidder will win, sort of like buying batteries at Target or Walmart (lowest bidder wins, a commodity, nobody cares).

Low perceived value + Commodity = Troubled Service Business

If you are not viewed as a commodity, your customers will see unique value in your business and the services you provide. How many times have your heard the phrase, “they’re a dime a dozen”? Realtors are a dime a dozen, attorneys are a dime a dozen… on and on. You or your business do not want to be included in any of those phrases. There are so many  dime a dozen, “me too” PI’s out there – so warning #1 is:

You want to be much different or better than the average PI

You can differentiate yourself form the average PI in many ways. Try a unique pricing structure based on results or use a hybrid billing method. So many PIs use “industry standard protocols” and fail to experiment with unique methods its hard to differentiate one from the other. Another way to differentiate yourself is develop a USP (Unique Selling Proposition). What is your USP? Do you have one? Do you think you need one? Does your competitor have one? Your USP should be unique to your business only. For Dominoes pizza its “fresh hot pizza delivered in 30 minutes or less”. Here are a few more:

  • “The thirst quencher” Gatorade
  • “The chocolate melts in your mouth, not in your hand” M&Ms
  • “Diamonds are forever …” DeBeers
  • “The ultimate driving machine” BMW
  • “The breakfast of champions” Wheaties
  • “When your package absolutely, positively has to get there overnight” FedEX
  • “Safety” Volvo

While a superior product/service is the foundation for growing a company, there is an opportunity to use differentiation as a competitive advantage in order to separate yourself from competition.

“Differentiate or Die” is a good read on this topic:

Jack Trout

PItrainingHQ.com original USP is “Start-up and Marketing assistance exclusively for retiring law enforcement by PIs“. Your USP can change over time to adapt to changing conditions. Originally this site was designed only for retiring police officers who were contemplating entering the private sector. Because this mini-course has helped many ex-law enforcement transition, the initial retirees have referred the site to other people outside of law enforcement. The Unsolicited word-of-mouth can spread faster than ever in today’s business environment.  In 5 years we have helped thousands of aspiring PI’s with different phases of the business cycle solely on word of mouth.

Your USP will determine how you position yourself in the market. A positioning statement is a detailed description of your target market as well as a clear picture of how you want that market to perceive your brand.

Positioning: the way by which the marketers attempt to create a distinct impression in the customer’s mind.

A background screening firm that specializes in doing pre-employment background checks solely for one sector of the food and beverage industry can position their marketing efforts and services for the needs of their target customers. Providing background screening services to one specific industry or group is a great way to position yourself as an expert/authority.

USP, differentiation and positioning are very important concepts to grasp when starting a new business or entering a different market. These concepts should be addressed early in the business phase and be consistent with the overall goals of the organization.


OK, lets briefly focus on your goals.  Why are you going into business?  Most people go into business for all the wrong reasons. Is it because its time to do something new?  Is it because you saw someone else transition to the private sector?  Whatever your reason for going into business, it is of no concern to your customers. All successful businesses are market-driven.  The market determines whether your idea or business will succeed.  The market will also steer you to where your business is going!  So, listen to your customers they will provide valuable insight!

In 2001 an online pre-employment screening company practiced the PI Niche Method and was providing screening services exclusively to a small sector of financial advisory industry. The screening co. had a completely separate website from their parent company which made their financial services customers feel they were being serviced by a specialized screening provider.

One day a customer in New York requested a referral for a background check on a nanny they were considering hiring.  After a thorough search, the screening company determined there was no market leader or no company servicing this demographic. The research also determined the overall screening market to be somewhat small, but significant market share could be obtained due to the lack of competition.  After the research was completed the e-business was started in 2001 and went on to become a leading provider in the market for over a decade. In 2011 the business was divested after 10 years of operation, all because one customer had a problem and the business listened to their unmet needs.  This is why businesses value continual feedback from their customers so they can fulfill their unmet needs and anticipate emerging or vertical markets. Listening and evaluating your customers comments and insights are extremely important on how you are doing and where you may be going.  So, Solicit Feedback, all the time.

The few other things  to consider:

Is there a market that’s big enough willing to pay for what your business is offering.  Can it be scaled?

What is your personal the long-term goal of your business or new specialization? Are you willing to put in 10 years to grow a business?

Are you simply trying to supplement a pension?

Is it to draw a full-time salary?

Is it to build the business to eventually sell?

Is it simply to gain some business experience?

Everyone answers these questions differently. This is why custom plans are important and cookie cutter plans are not recommended.  Your long-term goal determines your business strategy.  The main reason this site is designed exclusively for investigators who want to grow their businesses to profitability, is because it takes skill, hard work and a strategy to build a profitable business. Any retired cop can submit the paperwork to become a PI and then hang his license on the wall and stare at it (don’t laugh, it happens).  There is nothing wrong with PIs that are simply supplementing their pension or picking up a few cases here and there, this specialized training is just not geared for them at all.  A part-time PI usually gives a part-time effort and may not be too concerned about revenue, competing or eventually selling a business.


Once you have determined your market is worth pursuing you must decide on your business model. A business model is the method of doing business by which a company can sustain itself – that is, generate revenue. For example, the broadcasting business uses an advertising business model. Radio and television programming is broadcasted over the airwaves for free while it charges fees for advertising. Google provides free access to their searches while making money off advertising with Adwords. While your business model strategy should be addressed during the business plan phase, it may change during the course of the business life cycle.

Your model is also determined by the services you offer.  A process server is in a high volume, extremely low margin business.  A PI that does due diligence investigations for mergers and acquisitions is probably in a low volume, high margin business.  Burger King is in the high volume low margin business.  When you are in a high volume business your customer service needs are typically greater. Make sure you know and acknowledge what type of business your getting into and look for ways to either increase volume and/or margin.

Overall, the P.I. business is generally a labor intensive business which will limit your choices for business models. The vast majority of PI agencies use a one or two person service-based business model. Which means you provide services to your customers for a fee, usually hourly. In keeping with our long-term goals, this long-term business model strategy is flawed for several reasons:

Difficult to scale the business when the owner is doing all the work

Difficult to bill over 100K/yr.  in services as a solo operator – there are only so many billable hours in a day/week/month

Owner is doing the labor and is the most valuable asset to the business. If owner doesn’t do the work, it makes no money…not a good strategy for long-term growth or to attract investors/buyers.

While there is nothing wrong with starting out with this type of business model, if you want to increase revenues or attract potential partners/buyers you must eventually transition your business model to something that will sustain growth/revenues. Call the nearest McDonald’s and ask for the owners.  They probably will not be there because the business makes money without them being present. Most savvy investigators recognize this and transition their businesses by automating or subcontracting assignments to other investigators. Some will transition to the brokerage business model or a hybrid model where they do some of the work some of the time. This strategy has positives and negatives:

Positive: Able to take on more cases and increase revenues. Pick and choose cases you want to work.

Negative: Customers generally do not like use of subcontractors and view you as a middleman. You do not have as much control if subcontractor is a 10-99 contractor.

As previously stated, business models and strategies can change significantly during the course of operating your business. The PI that started out doing opposition research services by taking orders manually and is now using technology to automate his business, has gone from a labor intensive service to a business that can be taken to the next level. While there is always customer service and customer interaction that will be required, automation is a good way to scale some aspects your business. So think about your business model and make sure it is adaptable to meet your ultimate goals.

OK, now that you have determined your long-term goals and considered business models, then you may proceed with your marketing strategy. The main reason this website is geared toward full-time investigators over part-timers is new entrants generally do not market their services like a PI who has a long-term goal of increasing business profits. Its is estimated most Fortune 500 companies invest 10-12% of gross revenue on marketing and advertising. The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising. Most P.I.s surveyed spend less than 2% on marketing.*

*First Research


Scroll to Top