Breaking Into an Oversaturated Market
Above every question we get, the most popular without a doubt is “How do I break into an oversaturated market?” Now this question is actually complex but, today, I will attempt to answer this question that has plagued almost every business owner at one time or another.
What is an Oversaturated Market?
The best definition I have found actually comes from Investopedia and states . . .
“Market saturation is a situation that arises when the volume of a product or service in a marketplace has been maximized. At the point of saturation, a company can only achieve further growth through new product improvements, by taking existing market share from competitors or through a rise in overall consumer demand.”
Think about this point, in a TRUE SATURATED market you can’t grow organically at all. You have to create new products or take market shares from your competitors. The reason we bring this up is that in order to break into this type of market, your marketing and branding strategy has to change. Below are some of our best tips to conquering an oversaturated market.
Figure out Your TRUE Market Status
When are consulting new clients we always ask people who state they are in an oversaturated market to prove it. We do this to make the point that sometimes our perception and inward mindset will destroy our ability to see a way to market in a highly competitive market. The only way we know if we are in a TRULY Saturated market is through market research and to see if most of the market is truly operating at the level of service I provide.
Find Your Niche’
In a saturated market, everyone is operating at the same level and serving the same type of client. This creates huge opportunities to serve clients at different levels. A good example of this is the t-shirt industry (Great example of a SUPER SATURATED MARKET). There are high end t-shirts with nice fabrics, super hero shirts, and even work out shirts. Go further, there are even year genre’s of t-shirts like the 80’s and 90’s. So as you can see, each type of niche is serving a different part of the market.
Value is like air: you never really think about it till its not there. This strategy can quickly separate you from your competitors with little to no cost to you. Some good example are rewards programs, phone conferences, consultants, or frequent buyer programs.
This one is a little tricky for some business owners. The incorrect way we see people implement this strategy is to drop their price so it is below the average market. The bad thing is in a saturated market, your competitors will do the same thing and then the “Race to the bottom” cycle starts and everyone goes out of business. The better way is to look at your product and see if it matches the needs of your market. Maybe you look to offer a different pricing structure to include more packages. When we got to our new market we offered one baseline package and then people could a la carte other items. It was a horrible failure. We changed our pricing structure to include three packages and the market responded very well. The important thing is we didn’t lower our price at all but changed how we offered our product.
This one is usually the most effective but can be costly. Innovation is what will make you stand out from your competitors. If your product is better than everyone is the market will shift in your favor. The only downside for the business is that your competitors will soon catch up so you are forced to constantly innovate. In a free market this gives your customers the best product at the best price. I would encourage you to innovate with things that are at a low cost so if your innovation does not work you won’t go out of business for it. A good place to start is look at your process and see what the customers want from your business. Getting a focus group of some of your customers of varying levels is a good start to this process.
Saturated markets can be scary things. The important thing is to make sure you assess your market correctly and come up with a game plan. Take on one problem at a time and you will find your business thriving. Above all. LISTEN TO THE CUSTOMER.
Let’s Stay Connected
I hope you have enjoyed this post. Do you want to dive deeper into how to be successful in new markets or are relocating your business and need some help? Come join our course Break into a New Market.
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