If you’re a business owner, you’ve likely heard the statistics on new business success/failure rates.
Only 50 percent of businesses survive their first five years. Look out a little further, and you’ll find only one-third make it beyond the 10-year mark.
With numbers like this, it seems even riskier to launch a business in a marketplace already flush with competitors. But don’t let this dissuade you from your dream. Even in crowded markets, smart companies can find their niche, uncover unique value, or succeed through a mix of savvy business decisions, passion, and hard work.
In many ways, opening up an entirely new market has its own set of risks. The idea or business model could be unproven, or you could be asking customers to spend money in a space they’ve previously ignored.
Blazing a new trail might be exhilarating, but it comes with a level of grunt work that could prove unsustainable. The hard work required to convince consumers to take a chance on something they haven’t seen before can drain even the most enthusiastic entrepreneur.
On the other hand, riding the momentum created by established competitors can be a smart way to jumpstart growth for a new business. Customers already understand the value proposition, so you can expend more energy on growth and marketing.
A number of factors can help or hurt you when you start or grow your business – especially in a crowded market. We’ve previously talked about the importance of branding, for example:
A strong brand increases the value of your company, creates an identity and motivation for your employees, and makes it easier for you to acquire new customers. A brand represents how people know you (or your business), and how they perceive your reputation or the reputation of your company. In today’s noisy world, a strong brand is more important than it has ever been.
A great brand starts with a strong name and logo, but there’s more to a brand than just the visual elements. Unfortunately, many small businesses don’t prioritize branding early in their company’s history. This is a mistake. Poor branding impacts your business in many negative ways – and can even threaten the survival of your business.
Assuming that you have the basics in place (name, logo, branding), how can you maximize your chance to succeed when starting or growing a new business in a crowded market? Here are seven proven strategies to help get you started.
Innovate to win customers
A critical part of any new business’ success is understanding the competition and finding new and innovative ways to disrupt the market. You need to know what your core differentiator is and show how you differentiate in your marketing and sales strategy.
Another strategy is to find an area or niche where your competition hasn’t established themselves and make that your core focus. Many of the most prominent companies got their start in a much narrower niche: Facebook was initially a social network for just college students, and Google specialized in search when all of the other big players at the time were building one-stop portal websites.
Small business owners often work under the misconception that innovation belongs to large companies and that you can’t innovate without deep pockets for significant research and development. This belief is limiting for many small businesses, who then miss out on great opportunities to present new and exciting ideas in their markets.
Don’t let this thinking prevent you from exploring and capitalizing on ways that you can be an innovator in your industry. Small businesses are in an ideal position to move on great ideas quickly, giving them a competitive edge over larger corporations. When you work with a more modest team, you can avoid the red tape and departmental process that slow big businesses down.
Let the bigger companies play catch up with your smaller, nimble business – get your innovations out there first.
Keep it simple
One of the biggest mistakes new businesses can make is trying to grow too quickly. It’s better to start simple and keep your value proposition concise and easily understood.
Have a laser focus on what solutions you bring to market. Not only will it make your value clear to new customers – it will help keep your marketing and sales efforts focused as well. A company like Native Deodorant has one clear, simple offering: great deodorant made with natural ingredients shipped to your door. That clarity also carries through to their well-written email and marketing copy.
It’s a lot easier to scale up and expand your business’ scope than it is to scale down. Don’t overreach too soon and stretch yourself too thin. Instead, make sure you keep your attention on perfecting your core product. Less is usually more – and you can always add on later.
Your business has a personality, and that’s a major selling point for consumers. Understanding how to take advantage of your business’ human side is crucial in a crowded marketplace.
No one wants to do business with a faceless, cold, unfeeling corporation – people want to feel a personal connection with a company. Emphasizing the humanity behind your company will help your company stand out from the crowd because it will genuinely connect your brand to the people you’re trying to reach.
Everyone remembers how bad Domino’s pizza used to be. Apparently, even Domino’s itself knew – and used this to showcase a human side to a huge company. Domino’s ran an ad campaign boldly facing the widespread belief that their pizza just wasn’t good, and they showed real employees acknowledging that criticism and reinventing their product because of it.
The campaign was authentic, honest, and relatable – who hasn’t made a few mistakes? – and proved the company was willing to change to fix them. The success is in the numbers: after the campaign ran, Domino’s fourth-quarter profits were more than double the previous year. That’s amore!
Prioritize customer service
“Although your customers won’t love you if you give bad service, your competitors will.” –Kate Zabriskie
With increasing competition and choice, companies have to extend exceptional services to set themselves apart. According to an American Express survey, 3 in 5 Americans (59%) would try a new brand or company for a better service experience. That means that focusing on providing excellent customer service is a smart, surefire way to strengthen your consumer’s experience – and build a loyal customer base.
If your company prioritizes customer service, you’ll be way ahead of your competition. It should be obvious but it’s worth a reminder: retaining customers you already have is more efficient, profitable, and impactful than having to seek out new ones.
Want to find a way to get in touch with your customers and make sure they have no complaints? There are plenty of ways you can encourage them to get in touch with you. Any of the following ways are easy, convenient, and inexpensive:
- A phone survey,
- An email survey sent from your CRM tool (We recommend MailChimp!),
- Making sure you’re interacting on social media sites,
- A way to connect on the “Contact Us” page of your website.
Authentic feedback is a critical component of customer service. Make sure it’s easy for your customers to get theirs to you – it will make them feel heard, and it will make it clear you have a genuine interest in their experience.
Outwork your competition
Web artist and video blogger Ze Frank ran his Internet famous “The Show” in 2006, where one of his best-known videos was on what he termed “brain crack.” It wasn’t the drug he was referring to, but the tendency for people to hold on to ideas in their mind instead of going out and doing them.
If you don’t want to run out of ideas, the best thing to do is not execute them. You can tell yourself that you don’t have the time or resources to do them right. Then they stay around in your head like brain crack. No matter how bad things get, at least you have those “good ideas.”
His advice? When you get an idea, get it out into the world as quickly as possible. That might not work for everyone, but the idea that you should try to push past your fear of failure and execute on your ideas is an important one.
When you’re trying to carve out space in a crowded market, you have to work harder and not let yourself become complacent. Every business has problems and challenges. The best way to improve and grow is to figure out what areas need improvement and then work hard to get better.
Even once you’ve become successful, don’t succumb to platitudes like “we need to improve every day.” Don’t just tell yourself you have to improve. Compete with yourself to find ways to work harder, allow yourself to make mistakes, and keep growing.
Finding the right people to add to your team can be a daunting process. Hire the right person, and your entire company will feel the benefits of the new addition. Hire wrong, and your company’s thriving culture could take a serious hit.
In a small business, every employee’s voice can be heard. That means it’s vital that the voices you choose create more than just a lot of noise. We’ve all dealt with that one employee whose energy crippled the workplace – and the employee who energized the entire team.
Take some time to reflect on your company’s culture, aspirations, and values. Make it clear to your candidates what’s important to you, and prioritize the qualities your team upholds in the people you hire.
Skills can always be taught later to the right person. The best employees are the ones who will welcome the challenge of learning something new. That kind of adaptability and initiative will foster positive growth for everyone and will encourage innovative thinking for your team going forward.
Have a powerful guarantee
Having a guarantee gives customers a sense that your company is trustworthy and that they can feel secure in what you’re offering – be it a product or a service. Guarantees create a purchasing environment that feels safe, and eliminating any anxiety surrounding the purchase process inevitably will lead to an increase in sales.
Zappos, in addition to their top notch customer service, offers one of the best guarantees around. How many of us would purchase a pair of shoes without ever trying them on without a guarantee backing us up? Probably not many.
They latched on to this understanding that having a great guarantee alleviates much of the hesitation a buyer experiences when thinking about buying something. Their guarantee allows you an entire year – a year! – to try out their products and provides free shipping both ways in the event you decide the shoes just don’t, you know, fit.
Your willingness to provide a guarantee elicits feelings of confidence – both from you and for your customer. It shows them you feel assured in your ability to deliver something high quality, while simultaneously giving them a security blanket to hold on to. It’s a great strategy, and it’s one your customers will be sure to appreciate.
For the most part, we live in fortunate times, where many of us are lucky to have the opportunity and privilege to take an idea to market. Even knowing the statistics we talked about earlier, the fact is that entrepreneurship and the rate of new businesses have grown over the past decade, especially in the last three years. This is according to the Kauffman Index and their annual Growth Entrepreneurship Index.
We know that around 45% of new businesses survive their first five years of operation, with the rest of the new businesses ceasing operations or being absorbed into other businesses. Others have described this as a process of experimentation, as entrepreneurs seek to find their markets and certain businesses continue operating and expanding.
Starting or growing a new business in a crowded market may seem daunting at first, but the presence of a crowded market usually shows there is a demand. Find your niche, innovate within it through hard work, hiring smart, and keeping things simple, and focus on providing the best customer experience through service and guarantees.
Are you ready to break away from your competition? Get strategies to make your business shine brighter, grow faster, and stand apart from the rest. Download our free ebook by crowdspring CEO Ross Kimbarovsky, Stand Out: An Entrepreneur’s Guide to Starting, Growing and Managing a Successful Business.
Design Done Better
The easiest way to get affordable, high-quality custom logos, print design, web design and naming for your business.Learn How to Grow Your Business With Beautiful Design