Often the question comes up, “How do I compete in my niche when there are so many others selling the same product or service and they are doing it for less than I can?”
In this particular case, the frustrated site owner was trying to sell his graphic design services, mainly logo design. He was lamenting the fact that there were also hundreds of logo designers selling $5 logos on Fiverr and that he couldn’t compete based on the prices that logos were currently bringing.
I don’t want to get into a long discussion about competition in this post . . . we will save that for another day.
Instead, I would just like to mention the approach to this dilemma that I take and the reason why it works so well.
I think the key for every business faced with steep competition is to somehow, meaningfully, set the business apart from all the competitors. Some call this differentiation. I like to simply refer to this as positioning your business in a unique way so that you stand apart from the crowd.
You must adopt the mindset that you are positioning your business to appeal to your prospects and customers in a certain way. You can’t be everything to everybody. Businesses that try this approach usually fail because they tend to become “watered down” or so general (trying to please everyone) that what they provide doesn’t give the level of detail and insight that is wanted by people seeking particular solutions in the niche.
A much superior approach, in my mind, is to focus on a corner of the overall market that will allow your business to stand out above all others. Drill down in the niche until you can identify a way to position your business in some meaningful way – just don’t try to be the cheapest alternative – because as soon as you do, someone will come along and undercut your prices. Then what do you do … claim to be the 2nd cheapest seller in the marketplace? Then more competition comes to claim the bottom slot and now you’re the 3rd cheapest in your niche! This is a losing battle and shouldn’t even be considered, in my opinion.
Explore the different ways that you might offer something unique to your prospects so that you aren’t competing with anyone else.
When you do this you won’t appeal to everyone … and that’s just fine … you will appeal to a particular segment of the market. There will still be plenty of prospects and customers in this sub-niche to gather as your audience and keep the income flowing catering to their needs.
Online business is huge and the reach is worldwide. Every niche has many prospects – more than you would ever guess.
Carve out your own niche and business positioning. You can do that by surveying what’s out there currently and seeing if you can identify an unmet need/want/desire in the industry.
The unique thing about your business could be anything that you specialize in that sets your business apart. It will be something that you can promote as your “brand” or USP. Here are just a few examples:
- Cater to a particular sub-industry and become known as the “go to guy” used by all the top firms in that single space
- Provide a unique set of services that other designers don’t offer
- Make your designs, or products, or services stand out as, by far, the very best money can buy
- Give better personal customer service than anyone else
- Include add-ons to your offers that make them very valuable to the client
- Offer to upgrade your products/services at a discount in the future for your loyal customers
- Don’t just do logos, (if that’s your business) include designing letterhead, business cards, web site headers, etc
- Provide the fastest package turn-around time in the industry
It could be anything. Some call this establishing a USP – Unique Selling Proposition. If you persist and you have a value-added proposition to what you offer and it’s something that is seen as very desirable by your prospects, you will begin building a brand that will become recognized for its uniqueness and value in the niche.
As you can imagine, folks on Fiverr are mostly competing against each other in the very low end market. Their uniqueness (cheap price) brands them all within the same general market crowd of vendors. Most will make very little money and if they spend any time at all on their designs, they will be working for pennies on the dollar compared to the higher end designers.
Believe me, competing on the basis of a cheap price alone is a tough business strategy, especially given the low entry dynamics of the Internet and the foreign labor that is willing to work for a tiny profit by Western standards.
I like the idea of polling the potential prospects (one day they will be your customers, right?) in your industry to find out what they want. Pay particular attention to any “holes” or “gaps” in the types of services that are generally being offered in the niche. See if you can fill any of these gaps with a specifically positioned product or service.
Your quest to compete becomes so much easier as you identify and offer the things that are most desirable to the prospects within your industry niche. Be sure to focus on your uniqueness … the things you do that set you apart. Your brand will be established by the way you stand out in the “sea of sameness” which includes all the other vendors in the niche who don’t do something special!
To your online business success!