I was leafing through my old issues of Business 2.0 magazine and I came across a 2004 article on Western Union and how it has successfully reinvented itself by going after a new market: the foreign-born workers.
Western Union was at one time the monopoly national communications company, especially in the 19th century up until the 1930s. During the heyday of telegrams, Western Union was the mammoth company of its times.
But as modernization ensued, the company struggled and even went into bankruptcy in the 1990s. By then, they have refocused their business to moving cash from one part of the country to the other, done through credit cards, ATMs, and other forms of electronic payment. Alas, even this business failed to push Western Union back into the black. The company sent its last telegram on January 2006.
Until Western Union decided to change its target market. Charles Fote of First Data Corp which acquired Western Union (then spun it off to shareholders in 2006) saw a great opportunity for Western Union: become the chief money-mover for foreign-born workers, one of the fastest-growing segments of the country.
The number of immigrants in the US is rising dramatically, and while “cashless society” is the mantra of Americans used to carry plastic all the time, cash still reigns supreme to many immigrants. And immigrants often send money back home (in cash) to their country to support the parents, families, and children they’ve left behind. Thus, they need services that could facilitate this transfer of money. Being an immigrant myself, I know this for a fact (though I don’t use Western Union because of the fees :o).
The good news for Western Union is that this market has long been ignored by most banks and businesses. And the results showed that they were right. Way back in 2003, the company earned $3 billion in fees on cash transfers and the market continued to grow as the company posted transaction growth in the international business of about 23% in the Q4 of 2006. Western Union had become a trusted household name among foreigners.
So what lesson can this give us small businesses? If you want the room to grow, look for a market or a niche that is largely untapped by the industry and your competitors. Western Union found that among the foreign-born workers. It may be an offbeat market or even an unglamorous market, but see its growth potential. If the market seems to be getting bigger and stronger, then capitalize on that market. Be different, and serve that market really well and your business can find its way on the road to success.