Are you in a search of the ways to increase your small business market share? This article explains how to calculate and improve your presence in the market.
What is market share and why it is important?
Market share is one of the most important indicators of business success. represents how well a business has been engaged in various revenue-generating activities and engagements, such as marketing campaigns and branding positioning, innovation, product developments and expansion. This metric can help a business owner to see if marketing campaigns, branding initiatives, or CRM programs are tracking in accordance to plan or need any adjustments or abandoning.
How do you find a company’s market share?
Market share represents a percentage of total sales generated in a particular industry by a particular company. It is calculated by taking the total revenue a business makes over the period and dividing it by the total revenue made within that defined industry over the same period. Basically, it is used to give the general idea of how big or small a company is in relation to its markets and competitors. A company with the largest market share is considered a market leader. Therefore, in order to increase a market share, a company needs to make more sales than its competitors. Which is, of course can be hard and tricky for small businesses. What are the options and what could we done to help your small business grow? There are some standard ways to help you with that.
How do small businesses gain more market share?
At first, it may seem that this idea goes against the logic to target a small market while you are looking to expand your market share. But what many small businesses do not understand is that money is in the niche. The synergy of small markets together, creates a bigger picture. Try to focusing on one specific product, one idea, and one group at a time and it might help you to find real customers and the market where your business’s strengths are more likely to be valued.
Market segmentation involves dividing proposed customers into different unique groups which they are homogeneous within. The segmentation process begins by identifying all potential segments that the market can be broken into. These segments can later be used to advance products and target advertisements to various customers. This is followed by diving further into creating sub-segments if applicable. Lastly, each segment will have different elements that have to be identified and described.
Generally, there are four common variables that your market segmentation could be divided into: demographics, behaviours, psychographics, and geographics.
If you are a bit lost and do not know where to start your segmentation analysis, Planium Pro includes segmentation tools designed to help you assess your target markets fast and easy, all you need to do is to follow step-by-step instructions, input simple parameters about your segments and let our Planium Pro take care of the graphs and projections for you.
Innovation is an effective way of increasing your market share. There are different forms of innovation that you could potentially engage such as product innovation, production method innovation, or simply introducing a brand-new product to the market that no one has offered yet. This might help you to obtain your competitor’s customers. Customers who are attracted to your company’s innovative potential have incentive to become loyal customers, adding to your company’s market share.
Referrals happen when one person recommends a business or provider to another person. Going out and looking for new customers is a very time-consuming and laborious task, while it is much more time and cost-effective to resort to existing clients, and incentivise them not only to return again and repeat sales but to share their good experiences with their family and friends. No matter the industry you are in, whether you operate a clothing brand or software company, referral programs can bring in a steady stream of new customers.
Some customers do not mind providing referrals, but others may need some additional motivation. In that case, offer them a discount on a future purchase or an entry into a drawing to win a vacation or a cash prize.
Buying out a competitor is a one of the old and trusted methods to make business visible on the market. The benefits of acquiring a competitor include the access to a new customer base as well as reduction of the competition, ultimately establishing dominance in the market and increasing your market share. The process requires a bit of research and capital to make sure that you obtain a positive asset that suit your product or service.
Prioritising strong customer experience can also help businesses increase their market share. Striving for positive word-of-mouth, it can help to boost sales and grow market share. Many business owners, however, are uncertain how to build strong customer relationships. The process is actually simple, and there are some proven techniques to employ such as:
There are numerous ways to overcome the competition, but market share is one of the most important. On top of generating more revenues, it also provides greater loyalty, engagement and attention. Put these strategies in place to get a bigger share of the marketplace.