Startups or new businesses often enter the market to solve a problem, meet a need, or fill a gap in the economic value chain. Most startups show up with a uniquely new product/service or they could come up with an innovation on an existing product/service. However, the arrival of your new/innovative product will challenge the dominance of existing players in your target market.
Hence, your business might find itself facing stiff competition from existing bigger players who probably have a bigger market share and more marketing dollars. These bigger competitors also know how to throw subtle disparaging comments that undermines or waters down the importance of your new/innovative product. This piece provides 3 practical tips for startups to compete effectively with bigger competitors.
1. Understand your target market
The first step towards competing successfully with bigger competitors is to understand the competitive landscape—an understanding of your target market will make it easier for you to introduce products/service that is compelling enough to break the loyalty of users to the existing players in your space. To understand the competitive landscape, you’ll need to research the competition – and this goes beyond the cursory Google Search. You may want to set up Google Alerts to stay abreast of what your competitors are doing or use Google Trends to follow developing stories in your industry.
Social networks can also be great tools for monitoring the competition. Michael Meschures, the president of Spaphile , a weekly deals site that shares high-end spa and beauty offers in an interview with Inc. notes that "we track our competition by keeping a very close eye on review sites, such as Yelp and Citysearch. We scour through reviews to find mentions of our competitors' deals, and then target that particular Yelper or Citysearcher's other favorite businesses so we're always one step ahead of the competition." You can also conduct research to get information about your target market by conducting surveys, patronizing these competitors yourself, or reading market research studies.
2. Carve out a unique selling point
When launching a new business, you should be deliberate about forging a unique selling point that gives you a competitive advantage. Many new businesses often think that offering cheaper prices is the only way they could compete with bigger competitors. However, you could compete by offering better customer service, faster delivery times, bundled offers, and significantly better products/services.
You can also find a competitive advantage for your business irrespective of the industry in which you operate. HQ Trivia is arguably the biggest live trivia mobile game in the market – it attracts more than one million players twice a day who compete to win a slice of prize money starting from $5,000 and sometimes as high as $25,000. That’s Right is an emerging competitor, but it has differentiated itself from HQ Trivia by providing players two chances to win a slice of the prize money by offering a raffle at the end of the game. In the last three months since its launch, That’s Right has achieved over 25,000 downloads and hosts more than 6,200 players simultaneously. Looks like being different does the trick, huh?
3. Be deliberate about gaining brand awareness
Generating and sustaining brand awareness is an important tool for competing effectively with bigger brands who probably have been in the market before you and have a stronger brand recognition. Many big brands sponsor sports teams and sporting events in the hopes of fixing their brand imagery in the minds of potential customers. A new or small business might not have the funds to sponsor sport teams but you can make T-shirts with strong brand messaging and have all your workers, friends, and family wear it all over the place to drive conversations about your brand.
Ikonick is an interesting example of how you can drive brand awareness by leveraging the virality that social media provides. Iconick provides some of its art to social media influencers who pose with the art and there share such pictures on their social media accounts In the words of Iconick co-founder, Mark Mastrandrea, "our relationships are an important part of our business… Our relationships make up our community, and the community is how our brand grows."