How can you win in a saturated market? This is something I hear a lot about through our social media platforms and through emails from Secret Consulting, a program I created to help mentor aspiring entrepreneurs. Throughout my experience creating multiple businesses and helping others do the same in saturated markets, the odds always seemed to be against me — or so I thought back then. People often ask me if an idea is worth pursuing when the market growth already seems to be maximized. This is a great question, but an invalid one. Here’s why:
Saturated Markets Are Everywhere
There are millions of companies out there, and many are doing exactly the same thing. Think about the simplest of businesses: retail outlets. They are competitors selling the same products. Or, think about computer companies: Apple was born as a competitor to Microsoft. Ferrari enjoyed its market share until an unhappy customer went on to found Lamborghini; today, Lamborghini has surpassed Ferrari in revenue.
Saturated markets just require founders to compete using different strategies. One of my students opened a carbon fiber business that grosses over $50,000 a month. He always brings up the idea that competition saturates the market, and revenue goes down in the long run. I think of it as the exact opposite.
A Saturated Market is an Active Market
The more competitors there are, the more awareness there will be on the product. More marketing messages will reach consumers with more purveyors competing in an industry. This will validate the idea that a particular class of products or services is something they need. It also leads to a bigger pie of marketing dollars instead of competitors just fighting for a larger slice of the same one. A growing market is good for competitors.
Market Saturation Forces Growth
Competing in a saturated market provides a balance in pricing for consumers and helps create a better work environment by pushing companies to remain innovative and conscientious of customer service. It also forces companies to grow, rather than become complacent in the comfort of short-term success.
The Key to Competition Is Product Differentiation
The worst thing you can do when entering a saturated market is mimic the work of others or to copycat the strategies they use. Most consumers get a feeling of distrust right away and feel they are being tricked if this is the case. Consumers are always looking for something fresh. But often, we misunderstand what that means. We assume they are tired of the current trend and want something completely different. The reality is that a simple twist on a great existing concept can go a long way. Jordan Swerdloff of ADV.1 Wheels built an eight-figure wheel business in less than three years in a competitive space. He simply took a concept that existed but was never perfected, and he targeted a completely different clientele, making his wheel line a huge success and his company profits soar.
Don’t look at an industry to see what your competitors are doing. Look to see what they are not doing. Then find a way to provide that exact thing in a perfected manner that cannot be rivaled. Something as simple as offering enhanced customer service in an industry known for poor service can go far. For example, DIRECTV knows that Xfinity customers struggle getting tech and billing support, so they’ve catered to that issue much better than other cable companies.
Bringing a brand to life takes time regardless of how saturated an industry or market is. The market saturation is only a testament to the need for such products and services. The fact that so many large players want to play within the same field is a good thing, but it is important to note that consumers still love a twist on an existing concept. They’re willing to be supportive of smaller competitors as long as they trust you.