Competing in an Oversaturated Market

Competing in an Oversaturated Market

Going up against competitors in an oversaturated market takes ingenuity, boldness, imagination, and probably a little bit of luck. Just because a particular market is crowded doesn’t mean an innovative, value-added approach won’t get you in the door. Finding the best ways to differentiate your business might be just the ticket to dramatic new growth.

Consider the “built-in” advantages a small business has in a crowded marketplace, specifically in terms of agility. A small business can “pivot and reshape their game plan when the market changes” with far greater ease than a big company. The same is potentially true with regards to updating a business website or launching a rebranding campaign. In a well-run small business, there are simply less institutional hurdles and obstacles that get in the way.

Here are other tips and insights to help you craft your aggressive strategy:

Know your own business and customers, inside and out.

Probably the most effective place to start your quest is by revisiting your current customer base. How well you understand how your customers’ preferences might have changed since you first began your business. If you’re not keeping up-to-date, you risk losing that customer base to a competitor in your crowded market.

As you continue to grow and before breaking into a new market, objectively assess these factors of your business:

  • Changes in customer desires or “pain points”
  • New ideas on how to market your products or services
  • Innovations in your online presence (website, social media, etc.)
  • A forecast of where you expect the industry to be in 3-5 years

All of these factors can play an important role in your strategy to compete in an oversaturated market.

Survey your customers.

Building on your “self-assessment,” now’s a good time to reach out to your loyal customers. Learn first-hand about why they stick with your business over time. Put together a simple email survey or online questionnaire that aims to identify precisely how customers look at (a) the quality of your offering; and (b) the relative ease (or lack thereof) of the purchasing process.

Not only will your customers’ responses serve to enlighten you regarding entering a competitive market, but they could help address any existing shortcomings in quality, customer service, and/or delivery.

Don’t attempt to differentiate by pricing.

A common tactic among newcomers and those who suddenly feel pressure in a quickly growing segment is offering sharply reduced prices. In theory, this is meant to attract cost-conscious prospective customers who put price above all else.

As a long-term differentiating factor, though, it’s risky at best. Why? Because another business will come along soon enough and attempt to undercut tu low prices.

For this reason, notes Cía., “resist the temptation to commodify your own product by competing on cost and winning customers by being the cheapest option.” This potentially compromises your brand and distracts from the goal of offering a product or service “so valuable that people will pay what you’re charging.”

Stay laser-focused on customer satisfaction.

Never lose sight of the value of a satisfied customer. Evaluate every customer touchpoint along the buying journey to ensure you’ve left no stone unturned with respect to customer satisfaction. How effective is your customer service department? Are complaints addressed in a timely manner? How consistently does your team meet and exceed customer expectations?

All of this information can help set you apart in the crowded marketplace. After all, as the business advisor marketplace Consultants 500 notes, “Satisfied customers are more willing to give testimonials, good reviews” and recommendations to family and friends. Plus, “word-of-mouth recommendations can go a long way in helping you penetrate an overcrowded market.”

Exploit gaps in the market.

There are still areas where customers’ needs are either being overlooked or not met, despite an oversaturated market. There might be a lack of efficiency in how products or services are developed or delivered to customers. In other words, an upgrade takes place, but with a lack of viable customer support.

Taking a close look at the supposedly crowded market might unearth opportunities like these, ripe for the taking by an imaginative, risk-taking business.

Reach out to niche customers.

Within any oversaturated market, there are “pockets” of niche customers who want more from the businesses they frequent. This particular demographic (which can vary in size depending upon the industry and market) might well be worth targeting–if you can find it.

The challenge is closely analyzing the current state of the market and determining if a significant enough portion of that customer base is receiving the special attention it wants and demands. If not, you can exploit this opportunity and make it work in your favor.

Look for opportunities to add value.

Customers are always looking for “value.” whether in terms of product quality or the array of features and benefits a product or service offers. Focus on how you can do better than competitors when it comes to value. What features and benefits might be missing from the competition? Are there ways to enhance the reliability and dependability of a product or service? Can you do more in terms of customer service and support?

Look at where you can create new value where it previously didn’t exist. This could be your “wedge strategy” to enter that crowded market.

Keep it simple!

Lastly, an important differentiating factor is simplicity. Too many businesses in a crowded market have overly complicated websites or other customer-focused processes that discourage customer participation. By simplifying things, you will make your business more attractive to prospects and others.

Business2Community notes, “far too many businesses who don’t put themselves in the customer’s shoes [end up creating] a less-than-satisfactory customer experience.” Your business can stand out “by ensuring you have the easiest buying process out there.”

New market opportunities do exist in an oversaturated market. The key is closely analyzing conditions, with a special focus on value, customer service, and delivery of new benefits. If you zero in on one or more of these missing elements, chances are good you’ll stand out in that crowded market.

 


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