I was invited to speak at Actualise Lagos – a one-day workshop for entrepreneurs to discuss the various issues entrepreneurs face. In consulting with different entrepreneurs that are just starting out, I find that more often than not, some entrepreneurs believe their business would not succeed because there are too many people doing the same business. However, the number of players in an industry should not deter you from building your business.
Some people think it’s best to avoid a saturated market. They feel the market is too crowded with competitors and it will be difficult, if not impossible, for them to penetrate, but I disagree. Imagine if Rihanna decided not to launch her business, because there are a lot of makeup brands, she won’t start Fenty beauty. She would not have a billion-dollar makeup business today.
Testing an unproven market can be costly, time-consuming, and risky. On the other hand, in a saturated market, there are clear signals about where opportunities lie. However, most people don’t read those signals properly.
When a market is saturated, many competitors sell similar products and services in one industry. That is a clear signal that the market has many eager buyers. Otherwise, it wouldn’t be sustainable for so many players to be in it. This is amazing because it says a lot of entrepreneurs are venturing into this industry because there are a lot of opportunities there.
So, why are people afraid of saturated markets?
The presence of many competitors means many businesses are trying to get the attention of these customers in this industry. The most important thing is to do an in-depth market research and have a proper marketing plan. Most entrepreneurs feel pressured to spend more in marketing, when in fact, the real challenge is just to do effective marketing and come up with unique sales strategies.
Businesses will try to compete by using cheap pricing tactics by driving prices down. Do not enter this trap. Compete on the value you add to customers, not on price. Your goal should be to offer something so valuable that people will pay what you’re charging.
The best strategy for succeeding in a saturated market is to create a great product. A saturated market keeps everyone creative, and always improving on their products; otherwise, their products would soon become irrelevant. Like what happened to Nokia when other phone companies – Apple and Samsung, started innovating, Nokia got left behind. The challenge for you is to keep listening to your customers and let them guide you in iterating and making your product better.
There are at least 3 ways you can stand out in a saturated market:
Differentiated Brand Personality
Different approaches and styles resonate with different people. When you have a distinct style, voice, or brand personality, you’ll appeal to specific types of buyers. Your brand personality encompasses your values, your mission, and your vision – what you stand for.
That’s enough reason for people to buy from you instead of a competitor, even though you may be the more expensive option.
So, be true to yourself. Communicate your brand personality in everything you do, and use it as a beacon to attract buyers.
Finding Your Niche Market
In a big market, you can stand out by serving a specific segment or niche. Look for a sub-group whose specific needs aren’t being met.
For example, the hair industry is a massively saturated market. There are so many business owners selling hair extensions. However, if you focus on a niche product, maybe just focus on selling hair extensions for African textured hair, you attract a different customer segment that would be loyal to you because your product is exactly what they need. This is exactly what Natural Girl Wigs did, the company focused on a niche and created their own market.
These potential customers are probably buying what’s out there, simply because they haven’t found a better alternative. But when they see an offering that’s created especially for them, they’ll happily buy it instead.
Make Customers An Offer They Can’t Refuse
Finally, you can stand out by addressing a gap in the market
The real estate industry, for instance, is an incredibly saturated market globally. Entrepreneurs in this industry have realized this and used that opportunity to create a different service offering for their customers.
The issue of paying annual rent in Lagos can be a hassle for young people living and working in this city. A
Sometimes you look at an industry and see a gap. You notice things that should be offered but are not available or not being provided in an effective way. That’s a great signal to you that, not only is there a demand in the marketplace, but that demand is not being met, despite the offerings out there. You need to create something to fill that gap.
Go ahead, step in and fill that gap and lead people to the outcomes they want.
Don’t bother yourself about saturated markets. Focus on what you can contribute to that saturated market that everyone else is missing.