The Different Stages Of Market Saturation

By Jamie McSloy / January 26, 2018
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The Different Stages Of Market Saturation

Sometimes, I write a title for these blog posts and I just know that I’ll get about ten views on the article ever… even when the content is great.

This is going to be one of those times.

So important side note before we start: take time writing your headlines, people. You’ll probably want to avoid writing them at 7pm on a Friday too.

But let’s get into the topic of the day, which is the level of saturation within a market.

This should be part of your research for any project, and I’ll talk about this more in detail in private projects later, but in this topic, I’ll give you the quick rundown of how to ask the right questions.

Here’s the case in point: This is what the cryptocurrency market is going through right now. We’re experiencing a shift from “Wow, New Thing!” to “It’s a Scam!”

Before you chop my head off about Bitcoin being real, please read the article.

(Time Out: If you’re enjoying this article, then you should probably sign up to my mailing list, where I give out ideas and business tricks that I don’t share publicly. Click here, fill out your details and get yourself on the list! You won’t leave this page.

Now Back To The Regular Programming Schedule…)

Stage One: Before Anyone Knows About It

Most people in the world will only get exposed to something when it’s in its third or fourth generation.

Let’s assume you’re a total nerd for a certain subject. Think about a subject that’s got some sort of mainstream appeal.

It might be a TV show, computer game franchise or hobby that’s gone slightly mainstream in that you can talk about it without people immediately falling asleep or changing the subject.

Remember when that wasn’t the case?

Take Bitcoin, for instance. I remember reading about that back on a handful of forums when it was worth $0.001 and people could mine them with their standard computers.

It was geek city, and the general consensus was that it was a weird hobby and it might make some money.

I wasn’t one of those people. I didn’t hit the target market buttons – and those target market buttons were people interested in the tech mixed in the with the odd gambler.

Here’s the craziest thing. Everyone in the later stages says dumb things like, “Well, if I’d known about it, I would have done it and I’d be a millionaire now!”

I’ve even had some guy say to me when I told him about my knowing about it from years ago laugh and tell me I was stupid for not getting in at the early stages.

Here’s why that’s crazy: Because if you’d have known about it back then, you probably would have done nothing about it.

If you were the sort who would have known about it, then you would have heard of it.

This characterises the first stage. Very early adopters purposefully seek out information and use it.

Stage Two: What You’d Call “Early Adopters”

The marketing for the above market speaks for itself. Think late-90’s pick-up sales letters. The people don’t need a hard sell. They are seeking out the fringes due to a desperate need or peculiar interest.

Stage two is what you’d call an early adopter phase. This is where something starts to gain traction.

Here is where you spend a lot of time telling people what something is, why it’s valuable and what they should do about it.

The approach will range from soft-sell infomercials through long video sales letters.

Throw in a little bit of “You’re smarter than the rest, because you’re an early adopter” and you can sell a new $1000 phone every year despite it having worse features than the last model you sold them.

Stage Three: Holy S(%T! This Is Awesome!!!!

Once something has gained traction, it’ll start to permeate the cultural awareness and this is represented by normal folks finally taking an interest.

In other words, it’s like when all your bar-hopping, pop-music listening friends start talking about your favourite sci-fi show and saying things like, “I’m totally such a geek!”

Of course, this is irritating as a consumer, but as a marketer, it’s money time.

Why?

Because you get a lot of people who know next to nothing about a product and they are driven entirely emotionally by the need to fit in.

This is where Bitcoin has been the last couple of months.

The marketing for this stage involves going big on the fear of missing out, throwing dream stories into the mix and otherwise making it seem like you’re on a once-on-a-lifetime ride to the moon.

Note: In reality, there’s no such thing as “once-in-a-lifetime” but that doesn’t matter.

Think about teenage girls who have to have the latest fashion accessory. That’s a perfect example of this marketing. To an outside observer, it seems pretty tame and the obsession looks stupid. But in the target market’s head, it’s the sign of impending dreams coming to fruition. Fame, fortune, good looks and wow.

Of course, this has a downside.

Stage Four: It’s A Scam

Let’s throw the baby out with the bathwater, because by this point, scammers, spammers and quick-buck makers have piled into the product or niche.

They ham up the dreams at exactly the moment where people from the last group are realising that there was obviously going to be more to it than putting in the credit card details and hoping.

Cryptocurrency is like this. You have well-known internet hustlers revving up their $995 programs, the lamborghinis and pizzas. This is all coming at the same time that the first generation of non-tech-nerdfaces sold their houses, stacked their credit cards and moved into tents in order to put it all into Bitcoin two days before it got chopped down thirty percent.

This all adds up to a climate where you find yourself trying to sell stuff to a market that’s jaded and out for blood.

It’s tricky to sell in this market but you can do it.

Stage Five: Bubble Popped

After the furore, these things normalise.

Remember when Pick-Up Arts material made global news everywhere because that guy from RSD told everyone to go to Japan and just grab Japanese women, forcing them to perform oral sex?

Or when Roosh V got debated in the Houses Of Parliament because of some musings he had in a $5 ebook?

… I don’t blame you if you don’t remember, but that was peak “Oh my god they’re gonna ban men from talking to women!” mode.

Yet now you can still buy dating products. Guys still run dating bootcamps and people still get murdered by catfishing psycho-crazies on Tinder.

(Be safe people – I just figured seeing as I’m going to get weird SEO terms from the above sentences, I might as well go all out.)

In short, the dating market still exists because there’s still a need. But it’s not headline news and the bubble has popped. This is business as usual for marketing guys, but you can take the foot off the accelerator because at this point you have a target market and they know what they are going to get.

Stage Six: Hyper-Niche

After the “scam” thing and widespread adoption or alienation of the niche, you’ll find that any given market splinters.

A good example of this is the music industry.

Apart from outliers like Gangnam Style and the huge corporate entities who can lie set their own statistics, there’ll be no mega-mega sales numbers for single acts ever again.

It’s not like the 1980’s where a handful of bands could sell records in the hundreds of millions, and it won’t ever be.

Why?

Because the market is fractured. In 1985, if you liked heavy metal, for instance, you could go to your record store and buy from a choice (depending on where you were) of probably five bands.

Ten if you included people like Bon Jovi or Kiss, who weren’t really heavy metal.

So a handful of bands were what people were into and if you were into something very specific, then scroll up and see Stage One of this article.

On the other hand, now it’s a different story.

With a click of a button, you can find Black Metal. You can even find Christian Black Metal. You can find Christian Black Metal specifically in the Polish language and you can have all of the two bands that have ever existed send you their whole discographies within a couple of minutes and for less money than it’d take you to have imported one cd fifteen years ago.

What this means is that consumers don’t have to make do. If you love Polish Christian Black Metal, then you don’t have to walk into a record store (LOL What’s a Record Store, Grandpa!) and think, “Oh well… those Kiss blokes are wearing dumb make up, guess that’s as close as I get.”

Overall, if you’re marketing in this stage, the audiences are lower and the profit ceiling is lower, but it’s lucrative and you can be the king of the niche much easier than for any of the other stages.

Final Thoughts

Of course, there could be sub-stages of all of this, and there’s also the reality that it’s all a bit cyclical.

But generally, this’ll be the biggest mistake (or one of them) that people make in their marketing.

If you start your project thinking, “Hey Customers, Let Me Introduce You To This Thing You’ve Never Heard of Called Coca-Cola!”

… then you’ve got a non-starter out of the gate. If people are sceptical and your campaign doesn’t take that into account, your campaign is dead in the water.

Yet if you are marketing the other way, and assume people have knowledge when they don’t, again… no deal.

So make this all a part of your research component.

P.S. This post is awesome, and it’s one of those posts that’ll go behind a password-protected wall in the future. Read it, learn and leave comments. You know the drill.

  • Walt says:

    Great post, Jamie. Leads me to think that even if you’re late to a trend, all is not lost. You can jump in after the bubble bursts by identifying the micro-niches that have splintered off and do well in one or many of those.

    • Jamie McSloy says:

      Absolutely. In fact, it’s probably the best time (short of investing a ton of time and money at the start of the bubble) because you have less competition and the market is stable enough for you to predict your success.

      The problem people have is that they go into a niched-down market with the expectation it’ll boom again, which is unlikely.

      For instance, you could write music now for say, a death metal band, and make a living. You probably won’t be the next Beatles though. The niches are more dependable but have lower ceilings.


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