A quick anecdote before we begin our discussion on the B2B marketplace: one of my favorite travel destinations is New York City, and I make it a purpose to see as many Broadway shows as possible when I visit.
If you’re a musical goer like me, then your mind is automatically altering the above headline to: “How to Succeed in an Oversaturated B2B Marketplace…without really trying.” Unfortunately, when discussing the issue of an oversaturated marketplace in relation to the heartwarming, satirical comedy How to Succeed in Business, it makes me wish there was a solution easily achieved in a three-minute song and dance.
The reality is that today’s manufacturers and distributors must endlessly try in order to stand out in the B2B marketplace. Like Times Square in peak tourist season, market saturation is at an all-time high, and seasoned businesses can attest to the ever-evolving, infinite rat race of achieving differentiation. Despite the challenges faced, it’s important to acknowledge that a sector of business with high market saturation is a sign that demand is strong. In other words, competing in an oversaturated marketplace is not impossible; it is simply a chance for businesses to put their flexibility and creative skills to the test.
Before we get into the “how” of combating market saturation, lets start with defining market saturation and identify what manufacturers and distributors are up against in today’s B2B channel.
What is an Oversaturated Market?
At its most basic, market saturation can be defined as a point when the availability of a product or service is greater than its demand. In an oversaturated market, a business is at risk of being unable to acquire sales, and can only remain in business by completing one or more of the following options:
- Acquiring competitor’s customers, often through adjustments in pricing.
- Altering or enhancing a product or service.
- Communicating a unique value proposition through the enactment of a creative and effective marketing campaign.
Market Saturation in the B2B Channel
So what are manufacturers and distributors up against in terms of competition? A whole lot, to say the least.
- Global markets and offshore competition: In the world of manufacturing, China has maintained a strong lead since the turn of the century. Of the 5 million US manufacturing jobs that were offshored between 2001 and 2011, China was able to acquire about one third due to cheap labor costs. While there have been calls for greater supply chain flexibility in light of the coronavirus pandemic and its effect on production, this will not be enough to combat the strong-hold of cheap labor from overseas factories, leaving U.S. companies at a disadvantage.
- 2. E-Commerce and Accelerated Digitalization: With millennials taking on the role of B2B purchasing, the push for digitalization in the B2B marketplace has never been higher than when these digital natives are behind the wheel. Combine this preferred shopping experience with the data collection capabilities of an E-Commerce platform, and businesses without the means to adapt digitally are at risk of going extinct.
- Amazon Business: While Amazon is the poster-child of E-commerce, it is worth notating this threat to distributors in its own bullet point. Amazon’s unending resources and household name is enough to crush its competition, threatening customer loyalty and forcing distributor brands onto the backburner. The threat of Amazon Business alone is enough to spark distributors into action in order to remain competitive and relevant in their customer’s eyes.
Combating Market Saturation: The How
As notated earlier, life is not a musical, and the solution to achieving differentiation in the B2B marketplace isn’t a clear cut, one-size fits all. When faced with a large wave while swimming in the ocean, the key is to dive deep. For businesses, this means investing in research, data analytics, technology, and a killer marketing strategy. By understanding what motivates your specific target market demographic, you can remain agile in your marketing efforts to increase mind share and retain loyal customers.
A customer loyalty program is the perfect creative solution to gaining influence, differentiation, and coveted channel data. With the right program provider, loyalty program software provides:
- An integrated digital hub where customers can explore the latest incentive promotions while learning more about your brand;
- Frequent and automated communication touchpoints, such as SMS, email, push notifications, and product announcements to keep your brand top of mind;
- Custom enrollment forms and survey tools to collect valuable customer data;
- Education-based platforms to keep customers and channel partners better informed on your product’s capabilities; and
- Advanced reporting dashboards and administrative tools that enable manufacturers and distributors to easily manage their programs and monitor success.
The best part? Personalized reward options that make customers feel valued, and as a result, more engaged with your brand.
Customer Loyalty in an Oversaturated Marketplace
The harsh reality for many businesses in the B2B sector is that trends toward digitalization are not going away. In many ways, the motto in an oversaturated marketplace is as severe as “adapt or die.” The good news is that there are actionable steps to be taken to help differentiate your brand in the vast B2B landscape. With a customer loyalty program, you can evoke the power of a digital ecosystem dedicated to growing your business and meeting customer needs. The question is- when will you get started?