How to Succeed in a Crowded Market (part 1)

If there’s one thing affiliate marketing teaches you, it’s how to survive in the face of fierce compatition. As an affiliate marketer, I frequently found myself competing against hundreds if not thousands of affiliates, all of them promoting the same product to the same customers on the same traffic sources.All of the fundamental principles of traditional marketing, like differentiation, a USP, price testing, etc mean nothing, because everyone is running the same ads for the same exact product, linking to that same landing page.There is no fluff like branding or engagement. This is raw, pure performance marketing, where the only things that matter are clicks and conversions. Even the most successful affiliate campaigns are fleeting- blink, and someone with a slightly more optimized campaign will destroy you.Affiliate marketing in a competitive niche is something of a trial by fire. Words like “traction” or “angel funding” are unknown. You either convert enough of your traffic into sales to turn a profit immediately, or you die and a hundred marketers who are hungrier than you vie to take your place.If you can build a profitable business in that space, you can do it anywhere.This is the business environment I cut my teeth on marketing in, so you could say I know a thing or two about succeeding in the face of stiff competition.It may seem impossible to succeed in a space that already has established, better funded competitors. But, as a newcomer, you have several incredibly powerful advantages over your competition. Utilize them, and you will be able to outmaneuver the most determined competitors every single time.Here’s exactly how I was able to enter the most saturated verticals out there- dating, insurance, fitness- and build $1000-a-day campaigns despite the presence of sophisticated, entrenched competitors.

Don’t Educate The Market: Capture Traffic at a Later Stage of the Buying Process

You probably know that customers go through several distinct phases when researching a product and committing to buy. Remember Glengarry Glen Ross:[youtube=]The stages of the buying process are:

  1. Attention
  2. Interest
  3. Desire
  4. Action

If you’re in a competitive market, you will have competitors advertising to customers at every stage of the buying process. Many of your competitors, particularly big brands, are spending a lot of money to educate the market – to show potential customers that they have a problem their product or service can solve. Before committing to a purchase they will research all the alternatives, especially if they are B2B customers. While these people are doing research, they’re costing your competitors serious money in ad clicks and impressions, but are not converting into sales, because they’re still in the research phase of the sales cycle.Don’t bother trying to educate the market- let your competitors spend money convince customers they need a product or service in your industry. Then, when they’re finally ready to buy, when they’re finally at that ACTION stage, swoop in and get the sale. Here’s exactly how you can do this:

  • Consider buyer intent Bid on keywords that demonstrate strong intent to buy- “buy voip service” vs “voip service provider comparison”. Generally, the later you get into the sales cycle, the more expensive keywords become, but the jump in conversion rate usually makes up for this.
  • Don’t bid for top position There are many reasons why you shouldn’t bid for the #1 position in a group of ads, and this is one of them. Frequently, consumers will click on the top 2-3 ads for a search result as part of their research process, just to understand the marketplace. Then they will click on another, lower position, ad and actually make the purchase. For this reason, many more sophisticated advertisers test how bids and ad position affect conversion rates. Many find that position 3-4 is the “sweet spot” that actually converts better than being in position #1.

Next week, I discuss how to convert your rivals’ greatest strengths into unbeatable competitive advantages you can use to dominate the market.

  • Joe

    Awesome article Ilya, I really appreciate you taking the time to write them. Our web startup is at that point where we feel like we are educating the customer a lot of the time and this post rang true. Perhaps we need to focus more on creating the interest and desire.I currently am in the process of writing a ‘long sales letter’ but I shouldn’t even call it that. I am just trying to make my potential clients aware of what they are missing out on by not having a nice website and google adwords :). I brainstorming a lot of cool ideas such as screen shots of the google screen w/ adwords and then comparing 2 websites showing how much nicer one is compared to the other…leading the buyer to make a choice with the former. Do you have any experience with regards to stuff like this?Keep up the good work!-Joe

  • Ilya Lichtenstein

    I’m not sure what your question is…When you post a comment, you should link to your site, it’s not considered spammy. Not only does it give you traffic, but it also brings context to your posts.

  • Sasmito Adibowo

    Hi Ilya,We’re selling text-to-speech software for the Mac. Although text-to-speech have been around for more than 20 years now, it looks like most of the market is not ‘educated’ yet despite the big brands efforts. Is there a better way to market these kinds of software, which is already for niche users and for a niche platform (Mac)?Thanks

  • Ilya Lichtenstein

    Depends on how well-defined and segmented your target market is. If you’re framing it an evolutionary step for heavy media consumers, that’s an approach that will probably require more PR. If it’s positioned as an accessibility tool for older users, you can definitely run tightly targeted media buys effectively. In any case, you need to align your copy with your target market(hint: Many people using accessibility software don’t know what RSS is).