Owning your own business is about more than just day-to-day business operations online or in your stores. In order to beat out the competition, it's important to consider your company's growth and the size of your market share in the overall industry. When you focus on how to increase market share, your daily business activities are more likely to produce income and lead to the longevity of your business.
Market Share Verses Market Size
Market share refers to how much of the industry your company claims. For instance, the camping and RV industry is a $3 billion industry, comprised of some 41.8 million people. If your camping store did $1 million in sales last year, that's your piece of that $3 billion industry, otherwise known as your market share.
Perhaps the only other local competition did $750,000 in sales. Since their sales were lower than yours, you're the local market leader in your industry because you have more market shares. In contrast, if your local competition did $5 million in sales last year, they're the local market leader and not you.
Increasing Market Share
If you're an expert in your industry, but not necessarily in business, increasing your market share might sound kind of intimidating, but it's not as complicated as it seems. You likely maintain relationships of some kind with your current customers. Increasing your market share is about nurturing those relationships and creating new ones. If you can maintain personal relationships and enjoy a good conversation with your customer, you already have what you need to learn the skills necessary to increase your market share.
For instance, imagine a customer who comes into your nail salon after a particularly stressful week at home and on the job. Your services are the much-needed relief she has been hoping for and she shares all that has been happening, thankful for a willing listening ear. As you listen, you take particular care to pamper her, maybe throw in a complimentary moisture treatment for her hands, offer to book her next appointment before she leaves and hand her a discount card for her to share with a friend.
Your customer has formed an emotional bond with you and your services that will cause her to come back and tell her friends about you, therefore increasing your market share. Repeating this scenario time and again as a standard of practice helps build stability into your growing business as it gains ground in the local market.
Winning Market Shares Over Competitors
When your competition is ahead of you in market share, it takes being intentional to gain market share reliably over time. This isn't an overnight process, but it's one that's doable, especially when you map out a plan with your business leaders and managers so that you can work together. Here are some things to consider:
- Innovation: Apple is the market leader over many other cell phone manufacturers largely because of their innovation and determination to come up with new ideas that nobody else has thought of. To gain market share in your industry, focus on thinking the way nobody else is thinking and hiring creative people. Give your workforce regular space in their schedules to be creative and think up new ideas.
- Customer satisfaction: Chick-fil-A is the market leader in customer satisfaction because they're intentional about creating a unique customer experience. When you pull up to the drive-through, you're greeted by people with tablets who are ready to take your order with a smile and a, "My pleasure!" They handle large crowds with efficiency and quality. In your industry, think of ways you can make your customers feel cared for, remembered and treasured. This could be as simple as polite language, a well-timed message or a faster check-out time than the competition.
- Acquisition: Sometimes the competition isn't performing as well as they hoped and they get into a bit of hot water. You can gain market share through acquiring the competition. For instance, AT&T acquired Time Warner in its march toward a higher market share in multimedia services. When you acquire your competition, it's important not to acquire all the competition so as to create a monopoly.
Improving Customer Satisfaction
Improving customer satisfaction in order to increase market share is about finding ways to keep your customers happy while still protecting your bottom line. Your strategies are likely to vary by your industry, so consider these four tips for upping your game:
- Ask for feedback: Your customers are likely to appreciate the use of surveys, comment cards and feedback questionnaires, especially when they've encountered a problem with your services or products. Let your customers have your blind spots and invite them to communicate what they want and need.
- Check out the competition: Go undercover to do a little shopping at your competition, especially if they're beating you out in market shares. Experience for yourself what it's like to shop with them and to use their products. You're likely to discover one or two things to incorporate into your own business.
- Hire a mystery shopper: Sometimes it's hard to see things objectively from the inside, so consider hiring a mystery shopper to purchase some of your goods or services. Have them take note of what was good, bad and ugly. The results of their experience can help you make much-needed changes.
- Invest in focus groups: When you're unsure of what your customers want but know what their demographic looks like, consider putting together a few focus groups to study business practices or products. Ask your customers what they do and don't like, as well as what they'd like to see in the future.
Increasing Customer Engagement
Increasing customer engagement on social media can be a vital component of increasing market share in an ever-growing tech-focused world. In order to keep the comments, likes and shares coming, make sure you're posting regularly and that your content is current and relevant to them. Consider following the 80/20 rule where only 20 percent of your posts pertain to your business and services while the rest are educational, fun or encouraging to your potential client base. Social media experts can help you design a posting schedule that aligns with when your audience is online, as well as help you tweak your tone so that it better connects with them.
Customer Referral Programs
Customer referral programs increase market share by making use of word-of-mouth advertising. If you have a coffee shop, you could offer half off a beverage for new customers referred by a friend. For an online subscription service, perhaps the first month is free when the new customer uses a referral link to sign up.
For a direct selling business, there might be a free gift with first purchase for friends and family members of current customers. Your referral program should be tailored to your industry and offer rewards that your client base finds valuable.
Improve Branding and Company Identity
Wishy-washy company identity and unclear branding can create a scenario where customers don't choose you simply because they're unsure of who you are and what you offer. In instances like this, consider hiring a coach or consultant who can help you clarify your mission, vision, services, products, goals and measures of success. A clear logo, tagline, website and social media presence are important ways to communicate these things to potential clients so that you can increase market share.
Know Who Your Customers Are
If your market share is getting weaker even though most aspects of your business seem strong, it might be time to consider who your customers really are. Perhaps you've been focusing on teenagers but missing out on baby boomers as you advertise your products. Maybe you've been marketing to mothers when fathers would be equally interested in your early childhood toy line. If you pare down your niche to smaller than it needs to be, you could be missing out on market shares, so widening your niche might help you increase it.
Hiring the Best Staff
Hiring the best is about finding the best people in your field. If you want top quality professionals on your team but don't know where to find them, consider seeking the help of a head hunter. These professionals can search online and attend events where they can recruit the best people possible to apply for your open positions. When you're staffed with highly qualified people in customer service, product/service development, human relations, marketing and social media, you can increase market share to get ahead of the competition.
Maintaining Market Leadership
When you want to maintain market share, remember that nothing in business is stagnant. If you're not growing, it's likely you're falling behind. So, to maintain market share, you must retain current customers and acquire new ones at a rate that's faster than the competition.
For existing customers, use rewards programs, well-timed emails and, in smaller businesses, consider personal phone calls or handwritten notes. You can entice existing customers with occasional discounts or membership in a VIP club with special benefits.
To acquire new customers and gain market share to maintain brand leader status, your business needs a well-rounded innovation and marketing plan. You want to become the go-to people in your industry, so ensuring that web and social media information is current is vital. Consider strategic advertisements on social media or in nearby local businesses where your customers are likely to shop.
Seeking Help for Growth
Sometimes, our strategies to grow market share don't play out the way we thought they would and we need a bit of extra help to get ahead. More than just trying to maintain market share, you're working to capture or maintain market leadership, and this isn't always easy. Coaches or consultants can help you in these areas and more:
- Business Overview: Your business overview needs to include a strong mission and vision statement, as well as a snapshot of where you've been and where you're going as a company. Knowing this information helps you make decisions to do only what is in line with where you want to go.
- Customer Care: If your company doesn't know which customers they're following up with and when, a coach or consultant can help you categorize your customers into groups by spending. You can then decide how frequently to follow up with each spending group and how, in order to retain and gain market share.
- Funding Plan: Financial experts in your field can look at where you are, where you want to be and growth projections to help you craft a realistic plan for introducing your next product, hiring someone new or offering discounts.
- Forbes: Four Ways To Expand Your Target Audience (And Increase Market Share)
- Web FX: Five Effective Ways to Increase Market Share Online
- Investopedia: What Strategies Do Companies Employ to Increase Market Share?
- Forbes: How to Effectively Determine Your Market Size
- Entrepreneur: Looking for Ways to Improve Your Customer Engagement on Social Media? Here are Eight
- Inc.: Seven Steps to Launch: How to Run Your First Referral Program
- Tony Robbins: How to Create Your Brand Identity: It's who You are and What You Value as a Company
- Ministry Ventures: Three Simple Things to Express Appreciation in a New Way
- Fast Company: Why Apple is the World's Most Innovative Company
- QSR: Study: Chick-fil-A Has the Most Satisfied Customers
- AT&T: AT&T Completes Acquisition of Time Warner
- Statista: Camping & RV industry - Statistics & Facts