Three Actionable Strategies For Your Startup To Overcome Market Saturation
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Establishing a startup can be a very daunting experience, even when it’s a fresh industry with a lot of potential and an untapped market. When it comes to a market that’s already saturated with products and services similar to what you’re bringing, it’s infinitely more challenging. The established players in the market will likely have much more resources than you do, and the customers will already be spoilt for choice.
There’s a lot of good news on the flipside, however. First, a market that is saturated is one that has strong, consistent demand, meaning that even capturing a small chunk of it could be very profitable. In addition, you’ll be able to access a treasure trove of data to analyze how best to penetrate the industry, by learning from what your competitors are doing and seeing how best to improve it. So, here’s what you can do to maximize those advantages and break into the market successfully:
1. Identify your selling point and play it up
When asked “How are you different from all the other chocolate brands out there?” in an Entrepreneur Middle East interview, Mirzam’s Chief Chocolate Officer’s response was that the amount of effort and attention to detail they put into making their chocolate was their standout feature, helping them create products that had much better taste than what customers would usually find.
You’ll get asked that question too, and it’s essential that you prepare your answer properly, so you’ll be able to give a clear explanation of why it’s true. Beyond personal interactions, that unique element must permeate your marketing so much so that customers will come to identify your products by that specific advantage.
It’s also crucial that as much as possible, you back up your claims with verifiable stats. The lesson is that you must be objective in identifying your unique selling proposition and the stats to support it with because making a brand promise and disappointing customers would mean that you’d lose their trust immediately and probably won’t be able to get it back.
2. Focus on customer service
High quality customer service is one of the things that quickly gets lost when companies expand, and in many industries, customers are stuck with the products and services of some companies despite the fact that they are not happy with the quality of customer service they get.
As a new entrant into any market, offering personalized, efficient and truly helpful customer service is a great way to build loyalty among customers and spread the word about your company. Apart from the immediate benefit of helping you carve out some market share, it’ll be helpful even further down the line, since your customers will be more reluctant to leave if they feel attached to your company.
There are several ways to go about providing exceptional customer service, depending on your industry. What you need to remember is that the more personal it is, the better. Even if you have to spend some extra money, the ROI will more than justify the expense in the long run.
3. Consider going premium
The first instinct when you come across a saturated market is to attempt to undercut your competitors in pricing. While this might work in some instances, it won’t work in most. The reason is simple: Unless you have a new technology or a uniquely efficient process, you won’t be able to maintain the lower prices for long, and you’ll risk alienating your customers when you increase them.
Since the market is already saturated, there’ll likely be a race-to-the-bottom situation when it comes to pricing, and you can take advantage of that by targeting the higher end of the market. From Starbucks to Grey Goose, there are several examples you can model when it comes to targeting premium customers.
By effectively marketing your unique selling proposition and providing better customer service, you’ll be able to shift focus and build premium credibility, as shown in this study by Millward Brown.