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Making Me Too Products Work

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Being first to market always bring advantages You get to set the standard, establish your brand, create demand, and associate your product with the market. When there are no competitors, you’ll have 100 percent of the market share and the loyalty of satisfied customers. And when competitors do arrive, they’ll have to battle hard to push you off the top. But being second has its advantages too. You get to build on the mistakes made by the pioneer and enjoy a market that’s already been told the benefits of the product. With the right planning, the creators of a “me-too” product can quickly find themselves overtaking a tired front runner and moving from second — and even last — to first.

Stealing that position though will mean some smart preparations and creating a product that doesn’t just copy what’s already out there but which improves on it, exploiting the weaknesses of the current market standard and filling gaps so that your product can compete.

The best way to do that is to offer better quality. When industrial designer James Dyson created a new model of vacuum cleaner, he was entering a market dominated by large companies and in which “hoover” had become a byword for the act of sucking up household dust. By redesigning the product so that suction rates improved by 45 percent, Dyson was able to offer a vacuum cleaner that went on to become the market leader by value in the United States and the fastest-selling cleaner manufactured in the UK. And he was able to do it even though his me-too product is about eight times more expensive than that of his competitors.

When you compete on quality — and offer a significant improvement over competitors — it can be possible not just to steal market share but to change the pricing of the market too.

Be Nicer to Customers

Unlike manufacturers, retailers don’t have the option of offering higher quality products: the items on their shelves will be the same as the items on their competitors’ shelves. But they can beat the pioneers by looking for flaws in their customer service, and filling the gap.

That’s what Zappos did after founder Tony Hsieh had reviewed Amazon’s online bookstore and copied the model to sell shoes and clothing. After making almost no sales in 1999, the company was grossing over $1 billion ten years later. That growth came as a result of a focus on customer service that included return shipping assistance, a 365-day return policy and a call center that was always open and always helpful. So effective was the attempt to help customers that Amazon, which had enjoyed a five-year head start, bought the company last year for $1.2 billion.

Competing on customer service works best for me-too retailers because service is their main product. When customers can buy the same items in a range of different stores, both online and on the high street, the choice of seller will come down to convenience, trust and ease. When your me-too product is identical to something that already exists, then just offering to treat the customer better can be enough to pull ahead — at least until your bigger competitor pulls you in.

Apple is Always Second

Improved customer service usually concerns the relationship between the seller and the buyer. But when you can improve the relationship between the product and the buyer, then a me-too product can really steal the market.

Apple is the master of this technique. The company is never the first to bring a product idea to the market. It wasn’t the first to create an MP3 player, nor the first to use a touch screen nor even first company to offer a tablet computer, which have been around since the early 1980s. It did however improve the quality of products that already existed, but no less importantly, it made them easier to use.

iPods took off when music lovers realized they no longer had to click a button multiple times to find the songs they needed; the clickwheel meant that they could just roll their finger. And the sliding pages and large screen on the iPhone finally made changing functions and surfing the Web — something that other phones had been offering for years — convenient and easy. Although Apple had come in for criticism when it announced it was entering a crowded mobile phone market, its focus on ergonomics and user interaction meant that it was quickly able to dominate the field with a product whose core functions — communications, picture-taking, music playing and Web surfing — were the same as those of established competitors.

Of course, much of Apple’s success is also down to hype and marketing, but that’s another important way for a new product to beat a similar competitor with a first mover advantage. Users of Tivo, for example, may take the company’s dominance in its market for granted but the development stage was characterized by stiff competition from Mountain View pioneer ReplayTV. While Replay picked up the praise from critics and users at tech shows across the country, Tivo’s more business savvy executives were busy showing their player to broadcasting companies, making deals, and assuring them that their advertising revenue wouldn’t be affected. As Replay struggled to sell its player to customers, Tivo already had deals in place with retailers and broadcasters.

According to one survey, me-too products that differentiate themselves with unique customer benefits and superior value enjoy on average, five times the success rate, four times the market share and four times the profitability of the competitors that lack that key ingredient.

Whether you’re planning to mark yourself out with a better quality product, a superior customer service, revolutionary usability or some smart marketing, there’s no reason that being second to market means that you can’t conquer that market. Creating a successful business always means doing better than your competitors. That’s always easier to do when you know what your competitors have been doing — and what they’ve been doing wrong.

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