How To Succeed In An Over-Saturated Market
You’ve taken the leap and decided to turn your passion into a thriving business. The problem is that your passion lies in an industry that’s already over-saturated with businesses just like the one you envision. There’s value in finding an untapped market, but you don’t have to toss your dreams aside just because you’re not the first person to have an idea. Startups are emerging as industry leaders in saturated markets by carving out a niche.
Saturation Means Strong Demand
Seena Sharp, founder and managing director of Sharp Market Intelligence and author of Competitive Intelligence Advantage, points out that a saturated industry is a sign that there’s a lot of opportunity in the market. If entrepreneurs avoided entering markets that are already served by other businesses, consumers would have far less options.
Consumers today choose from more than 600 vehicle models—but in the 1950s, there were only about 65. Likewise, there’s not an overwhelming need for more restaurants, yet new dining venues are emerging every day, Sharp notes. It’s possible for any company to succeed in even the most competitive industries by creating a product or delivering a service that’s distinctly different or better than what’s available—or by catering to a specific subset of the target audience.
Tap Into Change
The key to success in a saturated market, according to Sharp, is change. “Change is a synonym for opportunity. If you don't know what's changing—with your customers, competitors, distribution channels, alternative uses, features and more, your customers will buy from those who do,” she says. And that’s precisely where new businesses have an edge.
“New companies often recognize the gaps that established businesses don't. If they're correct, they gain customers and grow,” Sharp says. “The challenge is not to become like the established businesses who think they know better than the customer. This applies to B2C, B2B and nonprofits.” Larger companies that have been in business for decades are sometimes set in their standards, and it’s more complicated to modify long-standing practices. Small businesses with less rigidity and a smaller organizational hierarchy can often make quick decisions and turn on a dime.
Deliver Value-Added Service
In any entrepreneurship course, you’ll be advised to choose a business model and figure out how to do it differently or better than existing companies. In some cases, though, you might already be in business and experience a sudden boom in competition. That was the case for Kyle Willis, CEO of No to the Quo.
“I started my social media consulting company three years ago when Facebook advertising was just kicking off and businesses were finally utilizing social media as a viable marketing channel,” Willis says. “Social media managers came out of the woodwork and everyone called himself a social media expert.”
Even though he had previously served as a national account manager for a social network, Willis needed a competitive advantage. So he offered low-entry, no-commitment contracts to clients who wanted to see if social media was a viable marketing tactic for their companies. “If clients weren't happy with my work or they didn't receive what they expected, then they weren't locked into any long-term contract and could cancel immediately.”
It was an incentive for clients to try No to the Quo over other social media consulting agencies that required long-term commitments. “This required me to constantly be delivering great results and make sure that I exceeded their expectations,” Willis says. Once clients experienced success with No to the Quo, Willis earned their business over his competitors.
Differentiate Your Business
If you’re really good at keeping your finger on the pulse of the industry and the waves of change, that often sets you apart from the competition. Small businesses that differentiate themselves are able to thrive in the most competitive environments.
“My advice is to do your homework, define what makes you different and embrace that difference wholeheartedly,” says Bob Myhal, CEO of NextHire. “My company, NextHire, is part of the competitive outsourced recruiting niche, yet we've been able to gain a lot of attention and traction by reinventing recruiting for the digital age and offering a disruptive flat-fee model.” NextHire allows busy executives to hand off the hassles of hiring for a flat fee, saving them both time and money in the long run while allowing them to find better talent.
No matter how crowded your industry, even if it's full of major brands, you can achieve success by setting yourself apart. Whether that means reinventing industry standards, taking a new approach to the business model or offering something customers can’t refuse, carving a niche in the most saturated market is possible with commitment and creativity.
Angela Stringfellow is a freelance writer, social media strategist and complete content marketing junkie obsessed with all things Web, written word and marketing.
A version of this article was originally published on January 9, 2015.
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