How to Grow Market Share

by Contributing Writer; Updated September 26, 2017

Growing market share is a fundamental goal of most businesses. There are several ways to grow market share: you can steal it from a competitor, or you can grow your business faster than the overall market. Growing market share involves conducting a rigorous analysis of the markets in which your firm competes, analyzing consumer preferences and designing a marketing plan. While there are many ways to grow market share, you should start by analyzing your existing customer base to see if there are ways to increase sales with your best customers.

Step 1

Segment your existing accounts into various groups based on their level of product purchases. Ask the sales force to conduct detailed surveys with these customers to determine what needs, if any, are not being met by your company, and develop new products that will meet these needs.

Step 2

Engage a market research company such as Nielsen to determine the size of the market that is currently not buying products from your company. A good market research company can tell you how consumers in specific age, income or geographic brackets view the types of products your company produces and how much they spend on these products each year.

Step 3

Direct your market research company to conduct a consumer preferences survey. Focusing on your products, the survey should ask consumers whose they're buying, and why; or if they're not buying at all, why not. It should also ask the factors that contribute to the purchase decision, including, for those who aren't buying the product at, what factors might persuade them to enter or re-enter the market. Existing customers should also be asked what factors, if any, would compel them to increase their purchases. .

Step 4

Design a marketing campaign to target potential new customers. Use the information you have gained from your market research to develop your campaign. For example, if potential customers perceive your product as being low quality, you should target these consumers with a campaign that emphasizes product quality.

Step 5

Develop an incentive program that will reward your sales force for bringing in new accounts. Increased rewards could be given to salespeople who sell to competitors' customers.

Tips

  • The incentive scheme for your sales force should reward them based on the profitability of their sales and on the company‚Äôs ability to collect on these sales. Many companies reward salespeople based solely on purchase commitments from new customers. The result is often low-quality sales that do not generate profits and, in some cases, are never collected from the customers.

Warnings

  • Make sure that your consumer preferences survey is anonymous so that the consumers do not know it is being conducted on behalf of your company. Consumers are less likely to be honest if they know the survey is being run by a competitor of one of their suppliers.