When will your next competitor arrive?
The way other companies compete with you isn’t always about you.
We have already considered replacement competitors, generic competitors, and budget competitors.
What about your direct competitors? And in particular: the new ones that will show up just around the corner?
How difficult is it to start your company?
Barriers to entry
What does the next person need to have or do, to enter your competitive space?
Do they need particular patents? Does inventory have to be created and stored? Is a certain amount of space a prerequisite? How much does this all cost before day one?
Is there a special certificate, diploma, or qualification required? Are there licensing requirements?
What vendor or supplier contracts do they need starting? How does this affect pricing flexibility?
Is the market already highly saturated? Are there any geographical restrictions on providing the service?
Each of these issues constitutes a barrier to entry. What you want to know is: is the barrier to entry low, or is it high?
Is it fast, simple, and cheap to get started in your market? Or is it cumbersome, expensive, and takes years of preparation?
Know your competitive position
A low barrier to entry means people can create a new business quickly and painlessly. It also means they could do so with fewer credentials or a smaller portfolio.
Make sure you can point to your experience, knowledge, case studies, and similar content and stories to show your qualifications in this role.
A higher barrier to entry does not necessarily mean a less saturated market. Think of attorneys: each licensed attorney must attend years of law school, pass the bar, wait years to complete all this… and yet there is no shortage of law firms.
In this scenario, add demonstrations of customer loyalty and appreciation to your messaging. Buyers will trust the stories from other buyers.
And in either case: always know what makes you different. People will, after all, always enter your market.
Create a value proposition that is all about your clients’ wants: this is part of my Loyal Customers consulting: click on Training Program.