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Being In A Competitive Market Ain'T Bad News!

Small-business-blog-competitive-marketingI've heard so many entrepreneurs lament about the fact that their market has multiple competitors. Contrary to popular belief, that's not the worse news in the world. It means there's actually a market for the product or service you're selling and an opportunity to find a niche for success.

I've also heard folks tell me they have no competition. They're either not paying attention (because if the market is viable, there are competitors out there, they're just disregarding them), or their market niche is infinitesimal or one that nobody else really cares about. Competition is healthy...even when it comes from very large competitors. By their very presence, they give credibility to the market. However, surviving in a competitive market is another thing entirely.

As an entrepreneur, you have to pick and choose your spots. You have to think of yourself as a guerilla warrior, always outmanned and outgunned by larger competition. But that doesn't mean you can't win. It means you can't fight every battle and expect to win. You need to carve out a niche where you can succeed and, in keeping with our military metaphor, "own the high ground."

Typically, in any market, there are segments that are underserved, either because the customers are small (but usually numerous) and, therefore, the initial contract value is small.  So for the larger competitors, it's just too inefficient to chase them. This provides an opportunity for the small business to acquire new customers and potentially grow them over time, through upselling. Or it could be that the particular product that you offer is more suited for a specific niche that has been left underserved because only a few competitors have the ability to provide that solution. In any event, if you can find that niche that has sufficient opportunity for you (market size), it will typically have less competition and more chance for success. Conversely, however, trying to play in the competitive mainstream, is often a huge mistake.

A perfect example was a recent client who was a successful niche player in their market. They spent countless hours (and precious resources) to respond to an RFP that represented a huge revenue opportunity with a prospective customer in a market segment where they had no previous success, and therefore no track record. They were up against several much larger competitors, among whom was the current provider, who had both history and track record in that segment. The company felt their success in their niche market segment would translate and good product would win out. Nope and nope! Not only were they shocked and dismayed by their crushing defeat (finishing near the bottom of more than a half dozen competitors), but it cost them other business, because with limited resources, they couldn't pay sufficient attention to some niche prospects that they ended up also losing. So, it proved to be doubly costly.

So, competition is good for the market because it defines it. It also provides a major opportunity for the entrepreneur to find niches in that market that are underserved, for whatever reason. And niches are where entrepreneurs, as guerilla warriors, can best fight their battles, "own the high ground" and the path to long-term success!

"The Entrepreneur's Yoda" knows these things. He's been there. May success be with you!

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2013-02-19 06:11:25 by Andrea Feinberg

Without competition how would I know what marketing messages, colors work? Where there's a gap to fill? Where there's an opportunity to grab? Where there's a policy to improve? Competition can be a huge source of what to avoid, emulate or focus on; bring it on - it's a great teacher or validation!


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