On November 12, Disney launched its long-awaited streaming service Disney Plus. Though the company boasts unparalleled brand recognition and enormous capital — as evidenced by the fact that 10 million people have already registered — there is no doubt it has joined an incredibly competitive field.
More than 250 online video services are already available to American consumers, and with tens of millions of households cutting their cable every year, that number is likely to continue growing. “I get asked all the time, ‘Where does this stop? When does it stop?’” industry analyst Brett Sappington told The New York Times. “The truth is that it is only getting started.”
As the streaming wars unfold, they will provide an interesting case study. How can businesses stand out in a crowded market? How can businesses win customers when they do not have the cachet or resources of a behemoth such as Disney? For leaders in any field, here are three forward-looking keys to weathering a sea of competitors.
1. Provide an Unmatched Customer Experience
No matter the product and no matter the competition, customer experience is a prominent driver of success. One study published in the Harvard Business Review (HBR), for example, found that “customers who had the best past experiences spend 140% more compared to those who had the poorest past experiences.” When applied to subscription-based products, the study found that members with the best experiences stay for an average of six years, whereas those with the poorest experiences only stay for one.
At Bain & Company, Tom Springer and his colleagues affirmed these findings with well-known examples. “Look at companies such as Apple, Costco, American Express, Philips, and Allianz,” they wrote. “Different industries, different business models. But they have one thing in common — large and growing groups of passionate customer advocates, earned by delivering an experience competitors can’t match. That, more than anything else, is why these companies lead their industries in profitable organic growth.”
The Bain analysts identified Charles Schwab as a company that transformed its trajectory by transforming its customer experience. Between 2003 and 2006, Schwab had a compound annual growth rate of –3.6%. In an attempt to stanch the losses, leaders began focusing on customer experience: They developed a system to obtain customer feedback and integrated customer service into strategy discussions, employee training, and company communications. Over the next few years, Schwab grew an average of 17.5% — and by 2008, was once again a leader in an industry rife with competitors.
2. Articulate a Distinctive Niche
When faced with abundant competition, it is also vital for leaders to pinpoint — and highlight — what sets their businesses apart, both in terms of product and target market. Put another way, leaders must pick their battles. “[Y]ou simply can’t fight head-to-head with your larger competitors on all fronts,” Emeric Ernoult, founder of social media tool Agorapulse, wrote on Medium. “But you can win specific battles by focusing your agility on getting one thing better than them.”
Expanding on this point, Alex Turnbull, CEO of the customer service platform Groove, wrote: “A competitive marketplace means that there’s a need for a solution, and there’s no way the biggest players are solving the problem for everyone. There’s almost always a (potentially profitable) niche to carve out, with the caveat that you can’t simply build another solution; you must build a better one for a targeted audience.”
Turnbull would know. When he founded Groove in 2011, several companies, including Zendesk, already offered similar services. Yet Turnbull found them to be overly complex and cluttered, and thus positioned Groove as a simple tool that was free of extraneous features. By doing so, he appealed to a subset of small business owners with straightforward needs. Within two years, the company’s monthly revenue had grown from $0 to $200,000; today, Groove has more than 8,000 customers. “[W]e don’t have to be better than Zendesk,” Turnbull wrote in 2016. “We just have to be better than Zendesk for our specific audience.”
3. Develop a Brand Story
Brand storytelling has become a popular marketing tactic over the past several years — and for good reason. Stories can attract media attention, create a loyal legion of customers, and even increase a product’s perceived value. A 2017 Origin survey, for instance, found that consumers placed a higher value on products that were paired with compelling brand stories. As Ilya Vedrashko, Origin’s director of research, told AdWeek: “Stories move not only people, but they also move product.”
While stories can be a boon to any business, they are particularly beneficial to those struggling for attention in a crowded field. “Many brands fight for the same space, but none share the same story,” Jennifer Reed explained in a blog post for Khaana Marketing. “A unique and powerful narrative differentiates you from the competition and allows customers to connect with your brand in a way selling can’t.” (That emotional connection boosts customer loyalty, too, with some researchers calling it more important than customer satisfaction.)
One company that has become known for its brand storytelling is Warby Parker, whose mission is to “offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.” It illustrates this story both through its communications, with a Do Good section on its YouTube channel — and through its actions, with its commitment to donating one pair of eyeglasses for every pair it sells. “[P]eople underestimate the importance of brand,” said co-founder Neil Blumenthal, “and the importance of really defining who you are and what you stand for and having a very distinct point of view.” The 9-year-old company, which has already donated 5 million pairs of glasses, is currently valued at $1.75 billion.
In any field — from eyewear to software, financial services, streaming entertainment, and everything in between — competition is inevitable. Yet ambitious leaders should view competition as a validation of consumer demand rather than a roadblock. “I don’t think a market is ever too crowded,” Brad Feld, managing director of the VC firm Foundry Group, told Inc. “That is, of course, as long as your product isn’t just another ‘me too’ offering… Instead, build a company that does something unique.”