When you know your market share percentage, you can perfectly evaluate the strengths and weaknesses of your business, as well as the value your company generates. Knowing the size of your market share is an excellent indicator of your competitiveness and performance, and can help you predict the financial future of your company.
How to Calculate Your Market Share
There are two effective ways to calculate your market share:
- According to units sold *
- According to sales revenue
Refresh your memory here on these two formulas to calculate your market share.
Knowing and applying these two models will allow you to create a strategy to increase your market share and have a clearer direction in your business decisions. That way you will be able to continue to grow safely.
Other Concepts Necessary to Know Your Market Share
In addition, it is important that you know some relevant points about market share:
- Market stability. You need to know if the market is stable and if it’s growing or decreasing.
- You need to know if the product or service you offer is very different, or very similar, to others in the same market.
- You need to know your company resources. Are they scarce? Do you have plenty?
- You must keep your competitors in the spotlight. Are they few? Are they many? Are their strategies aggressive? Are their strategies effective?
10 Ways to Increase Your Market Share
Let’s keep learning new ways to increase the market share of your business. To strengthen your market share indicators, it is essential to focus on strategies that will allow you to increase your number of clients, as well as retain and extend the life cycle of those who are currently loyal to your company. For this you have to:
- Offer products or services that meet your clients’ needs. You should focus on products or services that are useful and relevant to your customers, and market them accordingly. Think: What needs are you covering? What are your consumers’ habits? What is the frequency of purchase? For this, you can meet with your team and share information, ideas, and perceptions. They must be creative enough to let new concepts flow and come up with new ways of delivering your current offer. For example, let’s say Alice’s Coffee Shop decides to reuse its coffee waste, in the form of fertilizer for plants, exfoliating and beauty products, soaps, etc. Interesting, right?
- Diversify your offer. The previous point will allow you to focus on business aspects that you are not currently considering. This can mean new sales channels, brand growth, optimization of your capacity, and new sources of income for those products that you previously considered as waste.
- Survey potential clients and know their preferences. What do you think of your products or services? Do they satisfy your clients? If the average consumer doesn’t buy from you, where do they do go? What is most important for them when deciding their purchase? (price, convenience, tradition, technology, quality, etc.) Once this information has been collected, you will be able to compare other products with what you currently offer and, if necessary, make adjustments in order to have a value proposition that is attractive and relevant to the public.
- Create a marketing campaign for your company. You must use the information collected in surveys to define clear objectives (you can rely on the SMART methodology: your objectives must be Specific, Measurable, Achievable, Relevant and Time-Based), and thus communicate the value proposition of your company , your products, services, and how these are an important part of the life and likes of your customers.
- Expand your marketing scope. Use techniques such as mystery shopping and organizing focus groups that will allow you to learn more about your consumers and their shopping experiences, their likes and dislikes, as well as what they expect to receive or buy in the future. This will give you an insightful pattern of changes in purchasing habits and to be flexible and cautious when variations happen.
- Know the market niches. You should consider new market niches that you had never thought of. They may have special purchasing habits both in money spent and in the volume of purchase. Imagine that Alice’s Coffee Shop has an unexplored market niche of young consumers of organic coffee that consume 3 times more coffee than a regular consumer, in addition to having a preference for artisan, ecological and sustainable products. Have you wondered what are the unexplored territories for your products or services and what would imply to address these new niches?
- Be innovative. Knowing how your buyers think and feel will allow you to keep abreast of changes in industry and technology, which will also allow you to enrich your business and adapt relevant features to your offer.
- Discover new distribution channels. Consider various communication channels within your physical store, as well as within its virtual presence and the ways you send your products or services to consumers. Does your business have a virtual and physical presence to meet the questions and needs of your customers?
- Practice benchmarking. What are some of the good practices that are currently taking place in the industry in which you compete? Are you implementing them in your own company? Otherwise, you are probably missing new ways of doing things. Checking what the competition does is good, that way you can improve and learn from the success and mistakes of your business.
- Develop an incentive plan for your sales team. Draw new strategies and rewards for your sales team. Contemplate both digital and physical channels for marketing your products or services. This will allow you to expand the geographical boundaries of your business and reach places that your sales team has not explored yet.
Increasing your market share can be a challenge, so it’s something you need to do strategically and with a proper plan. Thus, you will be able to strengthen your presence in the industry, among your competitors, your clients, and your potential customers. While it’s true that small businesses may have limited resources, there are always safe and reliable business loan options that will help your company continue to consolidate and improve its current position.
As an entrepreneur, you must ask yourself these questions: do you want to grow your business?; What tools do you have to achieve it?; What will your new decisions consist of? You must be clear about where you want to go, what your dreams are, and use them as an incentive to make the best decisions.
So, how far do you want to go? You are the one who sets the limit!
To find more information and inspiration for your business, keep reading Customer Engagement: 15 Ways to Gain and Retain Customers.