Market sophistication is sort of a barometer for figuring out how many marketing messages, tactics and strategies a market has already been exposed to.
Every single market has a different level of market sophistication.
As the market becomes more mature, tactics and strategies will stop working or not deliver the expected results.
Does that mean the market is dead? No, but your marketing tactics are.
To better demonstrate the concept, I’ll be focusing mostly on the fitness industry – it has been pounded to dirt and is one of the most difficult markets to break into.
Welcome to the Jungle
1st to market is the stage one sophistication level which is a pretty rare situation, but if you are lucky enough to be in such a market, best approach with your claim is to be direct.
The market is fresh, you don’t need to elaborate your messaging here.
Next is 2nd to market (Stage two).
If your business is in this market, then it’s probably best to look at what ‘1st to market’ are already doing, how they are advertising, what claims they are making, and then enlarging on their claims.
In fitness, the 1st to market must have been claiming “reduce 5 kilos”, the competition came along and said “reduce 5 kilos in 10 days”.
By the way, another thing that happens with market sophistication is the change in marketing terminology – from “fat reducing” to “weight loss diet” to “paleo” – when all of them are the same thing.
Alright, you got the point.
When a market reaches 3rd stage of sophistication, this is where the problem arises – businesses have already copied the competitors 10 times and claim-enlarging cycles have been repeated all over again.
The market repeatedly hears it to the point that they stop believing. Your best claims are like firing bullets on a Kevlar armor!
Even if your ad said that “this will float fat right out of your body” – it wouldn’t sell your product.
This is one of the drawbacks of the so called “competitor analysis”. Most marketers get stuck there and are unable to move or breakthrough.
So, what do you do when the market is in its 3rd stage of sophistication? Which is probably the market situation of your business.
You need to shift the tactics from simple competitor analysis (doubling down) and start showing how the product works. Specially how it will work in your customer’s life.
Something from “floats fat right out of your body” to maybe “blocks the absorption of fat in your intestine.”
Not Out of the Woods Yet
Here’s the bad news though.
Your competitor will see what you’re doing, copy it, double down on it, until rest of the market falls in line and educational content becomes the norm, leaving the best of your customers with skepticism.
Unless you were the 1st to adopt this tactic, simply educating your customers will not cut it.
This is when the market reaches stage 4, it is just a continuation of elaboration and doubling down. And at stage 5 it’s safe to say your market is completely saturated or nearly dead. Nearly dead because it’s very rare for a market to completely die off.
Start bringing in some uniqueness to your content, instead of simply educating your customers about the product like everyone else in your market.
In fitness industry one of these content tilts can be “self-image identification”.
It means, you’re not just telling people about the process of becoming what they want to become, but you’re taking them on the journey with you.
Perception is reality after all!
I really like the example of Kino Body’s, Greg O’Gallagher.
Greg is selling lifestyle not fitness products – his mission statement is “transforming civilians into movie star shape in the simplest way possible”.
He not only delivers on the promise, but makes you self-identify with himself and rest of his clients, who found success with his products and training methods.
So summing it up:
- Figure out where your market is in terms of the sophistication level.
- Don’t get stuck in the doubling-down “competitor analysis strategy.”
- If your market is saturated, i.e. “nearly dead”, find your content tilt.