How to Increase Market Share: 7 Tips Your Business Needs to Know
Market share is the percentage of sales your business has in its industry. In the search engine market, Google has about 86% market share, while its closest competitor has almost 7%.
You don’t need to dominate your market the way that Google does. You do need to increase market share to maintain a viable business.
More market share means that you have more customers. It also means you have more power. You can negotiate better contracts with vendors and lower your operating costs.
It’s easier to scale and you’re more profitable. Your position in the market gets stronger and stronger.
How can you make this happen in your business? Read on to discover how to increase market share and become the main player in your industry.
1. Invest in Branding and Marketing
The reason why so many people use Google is that it’s a reliable brand. Since the company began in the late 1990s, the search engine found a way to separate itself from the others.
Not many people remember Excite!, Ask.com, or Yahoo!
Google’s brand grew because of marketing, too. It invested heavily in other tech solutions like artificial intelligence, advertising, phones, maps, and email.
They’re all free solutions, so people learned to trust the brand over time.
You don’t need to use that exact strategy. You do need to define your brand and market it consistently. Find the right marketing channels that allow you to reach your target market.
2. Innovation
If you want to grow market share through innovation, you have to offer something that your competitors don’t.
It also has to be something that serves your target market.
A product that’s fully sustainable is a good example of innovation. It doesn’t have to be revolutionary like an iPhone, but it does have to offer a solution to a problem.
3. Improve the Customer Experience
The customer experience is everything in your business. It’s made up of every single touchpoint that a customer has with your business.
An exceptional customer experience can turn into greater market share. Customers are so happy with the service they receive that they refer people to your business.
It’s an organic way to grow your business.
Look at each touchpoint in your business and find ways to improve them. How can you improve shipping times? How can each social media post have more engagement?
These are the little things that you should focus on.
4. Adjust Your Prices
This is difficult to pull off, but it is something to consider. Lower your prices and undercut your competitors.
You’ll gain market share, but it might not be worth it.
The issue is that your profitability drops dramatically because you’re breaking even or losing money on each sale.
You either have to have razor-thin margins and rely on a lot of sales to become profitable or have one product serve as a loss leader.
A loss leader is a product that’s sold at a loss to attract new customers. Customers that buy from your business once are likely to buy again.
They’re attracted to the inexpensive product, like it, and try out other products and services.
5. Hire a Sales Team
What if you don’t want to hire salespeople because of the costs? Outsource sales to a company that specializes in sales in your industry.
Carr Company is a great example of this. They work with manufacturers to generate demand and help them increase their market share.
Find a similar company in your industry to partner with. You’ll have a team that generates buzz so you can focus on delivering products and services to the customers.
6. Acquire Another Company
Do you know how Facebook became the dominant social media company? It wasn’t through innovation.
When the company was getting outflanked by Instagram, it spent about $1 billion in 2012 to acquire it. Facebook spent billions to acquire WhatsApp and dozens of other companies over the years.
If you have the financial means, you can buy out your competition. That eliminates them from the market and you take their market share.
The trick to making mergers and acquisitions work is that the companies have to be aligned with each other. The company you buy has to be stable and fit with the vision of your business.
If you just look at market share, you run the risk that the merger will be a colossal failure like the AOL-Time Warner merger in 2000.
7. Upsell Products and Services
Increasing market share doesn’t always have to mean that you need to acquire new customers. Leverage the customers you have to increase market share.
This entails adding products and services that they need in addition to your services. For example, you have an IT services company.
You already work with customers to manage uptime and efficiency. Right now, cybersecurity is top of mind for the majority of businesses. Add services like a cyber security audit and monthly services.
That allows you to grow revenue and market share at the same time.
It’s Possible to Increase Market Share
Why is it important to increase market share? If you want to scale your business and become more profitable, market share is a great way to do that.
There are several ways to increase market share. You can focus on branding and marketing. Product innovation, pricing, and the customer experience are other ways to increase market share.
If you can’t innovate, you can always buy out your competitors. That leaves you and your business with more market share. Your business will be the dominant business in your industry.
For more helpful insights for your business, check out the other articles on the blog today!