With accessible technology and advances in communications, more people are attracted to the notion of starting a business than ever before. When many people have very similar ideas to start a business in the same sector, this creates a ‘saturated market.’ Operating within a saturated market can feel daunting, but there are ways to make yourself stand out against competitors if you’re prepared to do your homework, learn, and adapt. Let’s take a closer look:
Does any of the following sound familiar?
- You’re in a race to the bottom price war.
- Your competitors are using cut-throat business tactics.
- There’s strong demand with low barriers to entry.
- It’s hard to tell the difference between one competitor and another.
If you answered yes to any of the statements above, chances are you’re operating within a saturated market!
This isn’t necessarily cause for alarm – but to move forward you need to clearly identify three important factors.
Firstly, you need to clarify what you’re offering and competing with, then clarify who you’re competing for, and lastly, establish how you’re different from the competition. I’ve broken down each of these items below.
Understanding the value exchange
The easiest way to compete in a saturated market is to find the strongest point of value exchange between you and your target market, especially when compared to your competitors. To do this, start by listing your unique business capabilities, your key target markets, and your most direct competitors.
Your business’s capabilities are those characteristics, products, services, skills and insights that make you the best at what you do. To hone in on your core capabilities, it can be useful to reflect upon the results and outcomes you’re uniquely placed to achieve for your customers. You may also wish to shine a light on the intrinsic characteristics that set your business apart, such as your brand personality or brand values.
Next, turn attention to your target market. A target market can be described as the group of customers that a business can service. While it might be tempting to assume that your target market is everyone within a given marketplace, realistically you’ll need to focus on a serviceable segment of the whole. To narrow this down, consider what type of customers offer the greatest value for your business – this may be in terms of job satisfaction or profitability.
Finally and most importantly, you’ll need to spend some time reviewing your competitors. Competition can take many forms, including direct, indirect, or substitutions. Consider what your competitors do better than you, what they do worse, what their current marketing activities are, and what messages they’re sending to prospective customers. These insights will enable you to decipher the ways you can deliver greater value than your competition.
By this point you’ll have a clear idea of what your undeniable value is, who the people are that are seeking your value offering, and where your competition falls short. Congratulations! You have now uncovered your Unique Value Proposition (UVP).
Take the time to create a seven-word or less statement that clearly and firmly sums up your UVP.
Your unique value proposition
Now it’s up to you to claim your distinct position in the market, and begin building brand equity by being known for that UVP.
Think of your brands position as a carpark – you’ll need to stake your space inside a consumer’s mind before someone else takes it!
To be truly successful, your entire business’ operations must align with your position and your value proposition. With a clearly defined UVP that clearly articulates the value on offer to your market against the competition (your position) you’ll be on the fasttrack to success, and even in a saturated market you’ll stand out against the pack!
Remember, having a direction is more important than having speed. Without a position or similar guiding principle, you’ll be heading nowhere fast.
The greatest brands in the world exist in the minds of their consumers. Know the position you wish to own in the mind of your consumer.