10 Proven Ways To Increase Your Market Share
In business, the big firms get to have all the fun. They usually have better bargaining power, lower production costs, access to more funding, and tons of other advantages that make it hard to compete against them.
But it’s not impossible. If you’re willing to put in the work, there’s plenty that you can do to increase your market share and put your competitors on notice, who may become more than a little anxious to see their portion of profits being taken. In this article, we explore the most effective ways to do so.
But first, let’s quickly cover the definition of market share and how to calculate it.
What is market share?
Market share is the portion of sales a company has for its industry, expressed as a percentage. For example, if an industry is worth $100 million a year in sales, and your annual sales were $25 million, your market share would be 25%.
This definition is known as market share by value, and it’s calculated with the following formula: (company sales value / total sales value for industry) * 100. You can also measure market share by volume, which uses product units instead of sales. Volume can give you insight into how many products you sell compared to your competitors, but measuring dollar value is a much more accurate measurement of your overall business success.
Measuring your market share can be a valuable benchmarking exercise, because it tells you where you rank among your competitors, and whether you may need to make some much-needed improvements. This is a form of gap analysis that can lead to powerful upgrades for your business.
Surprisingly, increasing your sales won’t necessarily increase your market share. This is because market share is relative to the size of the industry, which can shrink and grow throughout the year. If the industry “pie” is shrinking and your company sales are stable, you could be gaining market share without doing anything. Conversely, if the industry pie is growing and your company sales are stable, you could be losing market share.
Measuring market share for your industry is notoriously tough, and an entire topic on its own. We plan to cover this in a separate article soon. In the meantime, let’s talk about how you can increase the market share for your business.
How to increase your market share
When we talk about increasing market share, what we’re really talking about is increasing sales for your business. Provided the market doesn’t grow faster than the extra sales you make, you’ll increase your market share.
These are some of the best ways to boost sales for your business.
1. Boost customer satisfaction and loyalty
There’s a surefire way to sell more products and increase your market share: make your customers happier! Happy customers keep on coming back for more, and can eventually turn into loyal advocates who generate the vast majority of your revenue. It’s estimated that loyal customers make up about 20% of your base, but generate a massive 80% of revenue.1
Companies can spend fortunes on marketing (which is necessary) but neglect the customers they’ve already attracted. If you focus on enhancing customer loyalty through actions like improving your products and services, your customer service, and implementing loyalty programs, you can tap into a powerful force for increasing your market share. When you over deliver, you’ll reap the rewards.
You can also boost customer loyalty by getting to know your customers better. Do surveys (like Net Promoter Score), conduct interviews, and complete regular focus groups to learn about their wants, needs, and challenges. The better you know your customers, the better you can service them.
2. Use profit-based marketing
Profit-based marketing is a marketing strategy driven by campaigns that can show a measurable profit, like advertising and SEO. These campaigns form the foundation of your marketing strategy, and provide funding for campaigns that cannot be directly measured for profit, but provide business growth nonetheless. This combination of “foundational” and “supplemental” campaigns ensures that your marketing never makes a loss, and is able to be accurately measured for its success.
If you’d like to learn how to create a strategy based on this method, check out our step-by-step guide on how to create a marketing budget.
3. Create a new product
Nothing will drive up your profits faster than a successful new product. When Apple released their iPhone, it was a revolutionary product that transformed the mobile phone market, and helped to turn them into one of the richest companies in the world.
Anyone can create a successful product if they know what their customers want or need. It requires lots of rigorous research (both qualitative and quantitative), and so becomes a time investment in itself. But the rewards can be immense.
Be sure to also market your new item in line with its product classification, as this can make a big difference to your success.
4. Improve your existing products
On the other hand, why go to the trouble of creating a brand new product or service if you can improve what you already have? Even the most successful products can be upgraded, and in fact it’s necessary to avoid being left in the dust by your competitors.
As with new product creation, you’ll need to get extensive feedback from your customers to understand what they love about your product, what they hate about it, and how it can meet their needs more effectively.
5. Increase brand awareness
If you have an excellent product, brand awareness builds naturally. But there’s always more people to reach, and social media happens to be one of the best ways to do so. There’s so much that can be done. You can create a social content calendar made up of enticing posts for your target audience, both original and curated content. You can create social media adverts that land directly in the feeds of your most valuable customers. You can create tempting competitions and gather thousands of followers in one swoop.
Social media is an incredibly powerful tool for getting your brand out there, and the more people you reach, the more likely you are to increase your market share.
6. Lower your prices
If your product isn’t considered “premium,” you can consider lowering your prices to capture more market share. This is known as a market penetration pricing strategy, and it can be an effective way to capture initial market share for a new product. It does have its downside though—you’ll attract less sticky/loyal customers who are driven by price, and there’s a risk of people viewing your company as a budget brand that doesn’t make good quality products. Still, it’s a strategy worth considering if it fits with your market placement.
7. Try new sales channels
The internet opened up swathes of new selling channels to be utilised by businesses. You can sell your products and services on a social media platform like Facebook, on a digital marketplace like eBay, through email, Google adverts, and many more. If your target audience spends any amount of time on these platforms, you have a potentially effective way of reaching them.
Forming strategic partnerships can also help with this kind of thing, because your new partner may already be successfully selling on other sales channels.
8. Sell in a new market
In addition to new channels, there’s also entirely new markets that you might consider breaking into. Maybe your reach is restricted to a particular area of your city, with more customers waiting to be found in surrounding areas. You could consider opening a new shop location, or repackaging your product or service for a different target market.
Selling in a new market is known as a market development strategy, and it requires lots of market research to be effective.
9. Learn how to close sales
If your product or service requires its own sales process, you’ll know the grim frustration of wasting time on lost sales. That’s why learning how to close sales is so crucial—it makes your salespeople’s effort actually mean something. Being persistent, authentic, and summarising the benefits of your product are just a few tactics they can use to close more sales, which can give a hefty boost to your company’s market share.
10. Improve your website
A high quality website is absolutely essential for modern businesses. They are usually the first port of call for customers, where they buy your products or services, make enquiries, and find out more information. At the bare minimum, your website must be highly usable with great content, SEO-optimised, and styled to promote your company branding. It should also be refreshed every few years to ensure that its coding foundations are kept up to date, to avoid falling down Google rankings.
A killer website will lead to more enquiries and more sales for your business, making it a potentially potent way to increase your market share.
How to increase your market share—summary
With the right strategies, even the smallest company can steal market share from their large competitors. Whether it’s boosting customer loyalty, improving your products, or doing something else to increase sales, you can grab a bigger slice of the pie and increase your competitive advantage in the process. We hope our suggestions on how to increase your market share bring you plenty of success for the future—good luck!
- 2019, The Importance of Customer Loyalty – 5 Benefits, Emarsys