If you can come up with a truly unique idea, this is a gateway to success with enormous potential. With no competition, you’d have exclusive access to your target customers. But truly unique ideas are rare.
Entrepreneur’s New Year’s Guide
Let the business resources in our guide inspire you and help you achieve your goals in 2021.
5 min read
Opinions expressed by Entrepreneur contributors are their own.
Some of the wealthiest and most successful entrepreneurs have been those who broke entirely new ground. They created markets where there previously were none or invented lines of products and services that never existed before. For example, the first social media platform, SixDegrees.com, technically arose in 1997, but no social media platform was as robust or commonly accepted as Facebook was when it became popular in the mid-aughts.
If you can come up with a truly unique idea, this is a gateway to success with enormous potential. With no other businesses to compete with, you can gain almost exclusive access to your target customers.
The trouble is, truly unique ideas are ridiculously difficult to come by. Unless you have clairvoyance or both innovative thinking and luck on your side, the chances of coming up with a new business model are slim.
Most entrepreneurs end up slightly modifying a model that already exists, or rise up to challenge an existing competitor. In other words, they try to flourish in a competitive industry. How can you compete in such a situation?
Related: How Can I Tell Whether My Business Ideas Are Good or Bad?
Appeal to a different demographic
One of the most straightforward strategies is to target a different demographic. You can serve mostly the same purpose, but target an entirely different selection of customers to avoid competing with other established companies directly. Leaning back on our Facebook example above, LinkedIn attempted to capitalize on an audience of career-focused professionals, rather than college students (though by that point, Facebook’s appeal was already expanding).
Consider targeting different people based on factors like:
- Age. Is there a product for teenagers that may also appeal to middle-aged adults if it’s branded or packaged differently? Oftentimes, a small tweak is all it takes to completely shift customer perceptions.
- Income level. Try targeting a different income level. For example, if there’s a cheap, readily available product that can improved and marketed as a luxury version? Or is there a luxury product that can be made cheaper and more accessible?
- Geographic location. You may also distinguish yourself by targeting people in a specific geographic location. This is especially powerful if you’re investing in local marketing strategies like local SEO, since you’ll be able to reduce your competition to almost nothing on these platforms.
Make your products better
This is somewhat obvious advice, but you can get the edge on your competition by making your products better in some important way. If you’re charging the same amount of money but your product offers a distinct advantage, you’ll win a significant share of customers over from your competitors.
Related: 10 Business Lessons I Learned Studying My Competition
“Better” is an ambiguous term that can be interpreted in many different ways, depending on your goals and access to resources. For example, you may be able to offer a more durable product that lasts a longer time or a product that is somehow more efficient.
Oftentimes, improving product quality means increasing costs. You’ll spend more time developing it, use higher quality materials, and/or spend more time on production. But there’s another avenue to be competitive; you can reduce costs and offer products at a lower price.
Lowering prices is a complex strategic move because it can sometimes work against you. However, offering a similar product at a lower price will definitely attract at least some customers away from your competitors.
Consider reducing expenses, or making up for the lost profitability in other ways (such as with value-added services).
Add value in other ways
Most customers make purchasing decisions based on the expectation of value. They understand that they’ll get some benefit from purchasing this product and that it will cost them a fixed amount of money. You can improve this equation by improving the quality of the product or by reducing costs, but there’s another method as well: adding value in secondary ways.
For example, you can invest heavily in customer service, or add free peripheral services as a bundle with your core products.
Related: 6 Reasons Every Company Needs a Customer Service Roadmap
Strengthen your brand
Finally, you can make a push for more customer appeal by strengthening your brand in the following ways:
- Highlight your distinguishing features. Rework your branding by highlighting the features that make your company unique. What can customers get from your brand that they can’t get from other companies? Make this evident.
- Remain consistent. Branding only works if it’s consistent. Invest in solid marketing and advertising to make sure your customers understand what you’re about.
- Build familiarity and engagement. Use social media and ongoing customer engagements to build relationships and familiarity.
Launching a business in an industry that’s already competitive isn’t a death sentence. In fact, competitive industries can be valuable opportunities. No matter what, you’ll need some way to distinguish your business, but you’ll have ample flexibility to find a route that works for your model.