For a business that started with few competitors and unlimited markets, the domain name registration trade has certainly become quite difficult and price sensitive. As the owner or manager of your firm, you have a basic choice to make: You can pull back and ride out this difficult period, or you can use this disruption to your advantage. Can a savvy owner or manager bring profitable growth to his or her company? One positive answer may not be in familiar spaces, but in new markets.

Many corporations work to create new markets because they offer some wonderful attributes that apply just as well to domain name registrars. When you create a new market, you get to be the only player. With no competition you can price to the needs of your customers, not to the desperation of your rivals. This usually brings you higher margins.

For some owners, the best news about new markets is that you can get the satisfaction of creating something new. Fewer competitors provide you room to experiment. Satisfying the creative urge is more than just good for you, it can help you revitalize your team and retain key employees.

New markets need not be expensive. Both FedEx and Palm Computing started with almost no cash. AOL created a new market without investing in much new technology. “Creating and Dominating New Markets” details many new market successes. From that work, you can get four proven strategies that work to improve your odds at a lower costs:

1. Don’t assume a new product will build a new market. New markets come from solving problems that really perplex customers, not problems we wish would perplex them. Don’t be a company with solutions looking for problems.

2. Don’t put speed ahead of accurate targeting. The first company to try something does not always create a market. The key is first to market acceptance, not first to market. Be the first to solve the problem as the customer sees it if you want to be first to success.

3. Involve your customers in “self tailoring” your product. AOL’s early success came at least partially because they made the customer a part of the product. Members (customers) tailored their experience, and AOL watched and learned from that. Don’t just provide the product; let your customers adapt it while you watch and learn.

4. Perhaps the most important success practice is to invest in the right problems, not technologies. To build a new market, start by finding the most important problem.

Don’t assume that you know what those problems are. During the height of the economic troubles we surveyed 400 owners and managers to identify the top two operational issues they faced that day. We wanted to know what issues would be most likely to open pocketbooks. Given the economy, you might expect “cost control” to be the most frequent answer. It wasn’t; controlling money appeared only 1 percent of the time. What topped the list? The most common issues were internal day-to-day functional problems, roadblocks that kept the business from being able to go after revenue (read the article on the survey).

In the survey, about a quarter of the executives were most concerned about revenue and market-positioning issues. This focuses on the external view, problems around making deals happen, marketing to groups of customers and ensuring that the committed revenue booked.

In both cases, the problem was not cutting costs, but in investing more wisely. You can drop the price of registrations, but is that the right problem to solve? The empirical evidence is no.

How do you find the right problem to solve? Consider asking your customers what they want most to solve that has nothing to do with your present work. Then consider asking the same question of companies that have never been your customer. Look for the three absolute worst problems, and then ask what you can do to help solve them. What if you work to solve cost issues for customers and that is not a top problem? Should you expect high-margin business as your reward? No. But, if you can identify a top problem that no one else is solving, you have an opportunity to grow your business and your sense of satisfaction while others retreat.

This strategy is not limited to large companies. An ICANN accredited registrar can take advantage of this, and domain name resellers are in an even better position to implement this process. Who else is closer to the customers than the reseller? What is required is no more than taking the time to ask the questions.

With smart operational choices and considerable customer involvement, you can differentiate your business, create that new market, and then work to dominate it. The choice is yours: You can retreat or you can take advantage of disruption.