Be Different or Die: Find New Business in Your Crowded Space
Entering into a new space isn’t easy, whether by a conglomerate or a brand new startup. Take Uber, for example: The ride-sharing company has taken a foray into the world of food delivery, and the service -- which, according to The New York Times, is available in 120 markets worldwide -- sometimes earns more than Uber’s original offering.
The company reported in July that the new service, called UberEats, was already profitable in 27 out of 108 cities in which it operates. Uber’s newly appointed CEO and executive team are optimistic that the food branch will increase growth and revenue.
So how can startups emulate Uber’s successful new offering when entering into already tightly packed spaces like food delivery? Entrepreneurs should get to know their audiences -- before even reaching out. There’s no way a startup can attract its target audience if it doesn’t know who those people are and what they want.
But edging successfully into nearly saturated spaces, as Uber did with food delivery, requires entrepreneurs to think outside the box. Differentiators don’t need to come from out of left field, but they should be subtle and thoughtful differences that meet customers’ needs and delight them.
When Marketplace Homes, for example, first made its way into the $117 billion real estate industry, its founders decided to narrow the company’s target audience to new construction in their home city, Detroit. The founders also identified their ideal customers as people with homes for sale who would be trading up to larger houses. By targeting thousands of customers instead of millions (or even billions), Marketplace Homes ended up selling the most new construction homes to people buying a bigger house in the Detroit region.
Entrepreneurs hoping to achieve similar results when taking on a Goliath-filled industry should keep the following tips in mind:
1. Research till you drop.
As mentioned above, targeting customers only works if a startup knows exactly who it’s targeting, what they like, how they behave and which channels they prefer. Entrepreneurs should identify customers who frequent the industry they’re entering, have a specific problem their startup can solve and exhibit behavior that indicates they would be interested in the startup’s offerings.
The next step? Secondary research. Entrepreneurs should segment customers, research their behavior and determine the appropriate touchpoints for their respective business to engage with these ideal customers. Personalization based on customer research can make or break a company. StockBrokers.com awarded Scottrade its Best Overall Client Experience title every year between 2012 and 2017. Why? Because of its stellar, personalized customer service.
2. Create a language and news board.
This board should contain relevant news from all sources: companies big, small, public, private as well as any other type of news that could inspire or influence the direction of the startup. Entrepreneurs should take special note of industry trends, store closings, growth, or especially good or bad reviews. This board can serve as a reminder to listen to customers and stay agile as the industry changes.
Think of it as a sort of ongoing research to follow along with the first step. Word clouds can also help keep an eye on how the industry is shifting. But that’s not all they can do: Popular word combos can lead to new SEO terms to implement in online efforts or even make prevalent customer and employee feedback emerge in a clear pattern.
3. Put the customer first.
Don’t forget to listen to the customers rather than talking at them. Entrepreneurs should communicate regularly with customers, weaving successes into case studies and other content that showcases exactly how their respective companies provides value and solves problems.
Justin Croxton suggests on CustomShow making 90 percent of a conversation with customers about how the startup can take care of consumer issues while reducing talk about entrepreneurs themselves to 10 percent. Focusing on the problems customers are having emphasizes a startup’s expertise in the field.
4. Show enthusiasm for customers’ work, not their business.
Above all, entrepreneurs should make customers understand that their business is not the only item of interest. Show interest in customers’ work, both relevant to your industry and not. It will flatter customers and show them you’re seeking them out because of who they are, not because of the paycheck they can provide. This is another good way to stay apprised of new developments in the space, too.
Spaces with lots of competition may seem impenetrable, but with careful research and customer nurturing, any startup can thrive. Put these four tips in action to stand out -- no matter how big the crowd is.