You’ll thrive if you’re the only business around offering critical products or services people want. However, once a competitor enters the fray, you must do everything you can to maintain a competitive edge.
How to Tell Your Market is Saturated
Any market can be saturated, even niche ones. This is because as soon as someone has a great idea and it takes off, others will take notice and, yes, copy you. That’s why it’s so important to keep track of interest and sales in real time with Google Analytics and event streaming architecture.
Event streaming architecture tracks all events (logins, purchases, website clicks, etc.) and processes them immediately so that you can benefit from live analytics. You’ll want to use this analytics to fine-tune your brand, but you can also use it to identify market saturation—and if your business is ready for the competitive edge.
Signs of market saturation include:
- Slow or decreasing sales growth
- Decrease in web traffic
- Lower click-through-rate
- Increase in competitors
- Reduced foot traffic
If you notice these issues (especially if you were previously thriving) then the market is saturated, and your business is not ready for the competitive edge. To give your business that competitive edge back, you’ll want to use the top tips outlined in this guide.
How to Carve Out a Competitive Edge for Your Small Business
Whether you’re doing everything on your own or invested in business consulting services, follow these best practices to carve out a competitive edge for your small business:
Try to Fill a Niche
If at all possible, try to fill a niche. Look at what your closest competitors are doing, and workshop ways that you can stand out from them. If you are a gift boutique on a high street with multiple similar shops, think of what would set you apart. You could create a striking visual identity to stand out, or offer services, like craft workshops, to bring more people in.
Whatever new idea you have, however, do expect others to copy it if it’s successful. That’s why you’ll also need to use the other tips in this list to continue to stand out in the long term.
Improve Customer Service
Offering superior customer service is an easy way to stand out from the crowd, especially if you’re in a market where your products or services are similar to your competitors.
To offer that high level of customer service, you need to personalise and tailor the customer’s experience to each person. The best way to get started is with either a CDP or CRM. CDP and CRM are two essential customer data collection systems.
A customer data platform collates customer information from multiple sources into a single customer view to help you better understand your customers and, in turn, serve them. A customer relationship management tool helps you better manage those relationships directly by keeping sales data, preferences, birthdates, addresses and more saved and ready for access.
Combined, you’ll be able to better market, serve, and excite your target audience, helping to draw their attention away from your competition and toward you.
Be Secure, Gain Trust
One of the most significant challenges to gaining a competitive edge over your competition in a saturated market is gaining—and keeping—trust. Trust isn’t just some feel-good benefit to offer your customers, either. If your target audience doesn’t trust you, they won’t shop for you. In an Edelman survey, 71% of respondents stated that it’s more important they trust the brands they buy from than in the past, and 88% said they need to trust a brand to buy from them.
While building trust takes time, you can kickstart the process quickly in a few ways. First, ramp up your website’s security. Use all the tools available to you, including options like phone verification or SSL encryption. These standards work to physically protect customer data and help assure the more tech-savvy that their purchase data is in safe hands.
You’ll then need to work on building a brand awareness campaign. This will involve social media, influencer, and PR marketing throughout the customer journey. The full-scale approach will work to get your name, product or service, and USP in front of your audience.
Finally, you’ll want to use qualities of assurance. Awards, reviews, and certifications are just a few ways to assure your target audience of the quality of your product and brand.
Be Sustainable
Younger generations are more eco-conscious than ever before. This means that brands need to do one of two things:
- Be extremely affordable. Younger generations are still happy to buy from brands that don’t prioritise eco-initiatives if the price is right. For example, 30.29% of Shein’s customers are in the 25 to 34 age bracket.
- Be sustainable! Adopting ethical, sustainable, or circular practices, especially with a competitive price point, can give you a competitive edge. A Harvard Business Review study found that Gen Z and Millennials are 27% more likely to purchase from a brand that cares about its environmental and societal impact.
Your business can go green in several ways, from partnering with sustainable suppliers, to using recycled materials, or enrolling in a carbon capture program. If eco-initiatives aren’t on the cards right now, consider social ones that support your local community.
Be Forward-Thinking
This is an inevitability. The best way to deal with market saturation and its effect on your revenue is to prepare. You can do this in several ways, starting with how you use your data.
To start, you’ll want to create a comprehensive financial model that will help you predict the general flow of income and costs for your business. This will help you understand when a downturn is simply a slow market period or a sign of market saturation.
You’ll also want to invest in research and development continually. For small businesses, you’ll want to take advantage of trend reports and other vital resources. Follow think tanks, attend talks and conferences, and generally work on building up your business skillset and market know-how so that you can better pivot when you notice the market has saturated, so you can keep your business feeling fresh for your customer base.
Final Thoughts
Market saturation means that there are too many businesses offering the same thing. You can still succeed in a saturated market, but it is going to be harder. That’s why you need to constantly look for new ways to stand out.
This can be done by filling a new niche, by improving customer service or trust, or by adjusting how you operate your business. So long as you are constantly looking to improve your business and are on the hunt for new ideas, you will be better positioned to come out on top of the market saturation.
