How To Compete In A Crowded World

How To Stand Out And Get Noticed

In the marketing and sales space alone, there are 9,932 vendors. That's a lot of competition. So how do you gain customers in a crowded space and stand out so your marketing doesn't sound like an imitation of your competition?

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Considering The Competition

Most people, when they get into business, look out into the world and find a company that is doing something and tell themselves they could do it better.

Although this does work in some cases if you're trying to build a national or global brand unless you 100x the results and reduce the time and effort it takes to gain those results, you're most likely not going to win enough market share to run a successful business.

When people calculate their total addressable market (TAM), most forget to consider the competition already in the space and don't realize how difficult it will be to displace their positions.

The Law Of Category

If you look at any nationally or globally recognized industry categories, you'll often find that three companies dominate each category.

Providing a new service in the same category isn't as simple as providing a similar service or something slightly better and thinking you're going to persuade their customers to leave and purchase your platform, even if you offer it at a lower price.

Competiting on price is a race to the bottom, and in the end, you won't have the margins necessary to continue developing and innovating on your platform and will lose.

Instead, the best way to win isn't competing in the same category, but instead creating a subcategory and positioning yourself in that space so that you can be the #1.

Yes, this means you'll have a smaller market to serve but at least you'll be recognized as the leader of that subcategory.

And, before you write this idea off, consider how it already plays out in the world.

Classic Examples Of Subcategory Marketing

General Motors, Ford Motor Company, and Chrysler are the top three manufacturers in the US for automobiles. If you wanted to compete in the type of automobiles they offer, you'd be going up against giants.

So what do new car makers do, give up?

If you look dig into the car market, you'll notice there are subcategories for days and when you think of each category, you think of entirely different car makers.

There are sports cars, trucks, SUVs, off-road, utility, electric, hybrid, and many others, each with a different leader, not always General Motors, Ford Motor Company, or Chrysler.

Subcategories Create Specialization

Furthermore, when you specialize in a specific subcategory, you usually get to charge more because, in the minds of the buyer, you become a specialist.

This leads us to the doctor's phenomenon.

When you go to general practice, you know this doctor knows a bit about everything.

But when things hit the fan, you require something specific, so you go to a cardiovascular surgeon, dermatologist, endocrinologist, or other subcategories of a doctor.

Yes, you can say, "Well, they have more education, so of course, they can charge more."

But that same mindset applies when you subcategory your brand to a subcategory.

What Happens When You Focus Your Brand

Now, all of a sudden, when you focus on something specific, instead of the main broad category, people conclude that you know more about this specific subject than the main category leader who targets a broad audience and serves a large group of people.

Remember the fallacy, you can't be everything to everybody. The moment your try, you become nothing because no one understands what you really offer.

Going back to cars, who would you rather buy a high-performance car from? Toyota had the most sold car in 2022, the Corolla, but when you think of high-performance cars, does Toyota come to mind? Even with the new release of their Supra, other cars come to mind before Toyota.

Subcategories Have Subcategories

To take it even one step further, once a category's subcategory gets crowded, you'll find brands focus even more. For example, for high-performance cars, you'll find you could purchase a Chevrolet Corvette C8 at $64,500 or a Bugatti Divo at $5,700,000.

Both could be considered "high-performance," but that subcategory has subcategories that create a big difference in revenues generated.

The high-performance car manufacturer decided they would design a car for a very particular type of person, hence the reason they make so few of these automobiles. But because of the quality and engineering, their customers are willing to spend millions.

Having a smaller market doesn't always mean you'll make less money. Most times, you highlight your focus and say this is who we serve and those people come running because they clearly understand that you made your software platform exactly for them.

Both get from point A to B but one delivers that result really fast and with tons of status.

Putting It Into Practice

The way you put this into practice if you are operating in a crowded space is by researching all your competition and understanding how they position themselves in the market and who they say they are.

Afterward, look for gaps that need to be addressed that none of your competition is talking about but you know it's a problem prospects are trying to solve or a specific type of audience that isn't being addressed accurately.

Pepsi vs Coke

We saw this same play when Pepsi introduced the marketing campaign, Pepsi Generation, and addressed a specific market, the youth. Coke could try to market to the entire world, but Pepsi focused on serving only the youth.

You see this same playbook played out with many brands like Red Bull targeting extreme sports, Gatorade athletes, Target with the upscale mother, and Apple with creative people. Instead of trying to be all things to all people, they narrowed down and said, "These are our people."

Where these brands often find themselves getting into trouble is when they try to gain more market and tap into other markets because the core market gets upset that the brand isn't just for them anymore and the new group is confused because they only know the brand to serve a different type of person.

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