Market share is the metric that refers to the percentage of sales of a business in relation to the total sales of its competitors in a specific market.
For example, if 100 million avocados are marketed per year -of which 25.5 million units were sold by X producer-, the latter’s market share would be 25.5%.
It can also be defined based on sales at the monetary level. Either method is valid, as long as it is based on official data or from serious research.
What is the importance of defining market share?
This metric is essential to visualize the importance of the brand or product in the market. Through it, you can determine who your competitors are, industry leaders, incoming threats, and some strategies to increase customers and sales.
On the other hand, several studies recognize that one of the main determinants of business profitability is market share.
This is explained – in large part – because the greater the market share, the greater the economy of scale, that is, the better the advantages for making processes more efficient and increasing the level of competitiveness.
How to increase your share of the market?
According to Thomas Michael Hogg, an outstanding german business consultant, in order to enhance this indicator, you should focus on strategies that allow you to increase your customers and retain the ones you have, such as the following:
1. Develop products that meet new needs
Carry out several surveys in order to determine what needs you are not covering and define the feasibility of putting new products or services on the market that satisfy them.
2. Conduct a potential customer preference survey
After identifying new potential customers, conduct a survey in which you ask:
If they are acquiring the product that you sell and from which business they buy it.
Whether or not they are satisfied with their current suppliers.
If they did not consume the product or service, the reasons that led them to make such a decision.
Important factors in your purchase decision.
Based on the results, create a value proposition that allows you to attract those consumers.
3. Expand the reach of your marketing
Seek expert advice, which allows you to design marketing plans with intelligent objectives based on real data about the behavior of the market in general and the consumer in particular.
4. Develop an incentive plan for your sales team
Without compromising the profitability of sales, create a rewards plan for your salespeople. That will stimulate your production.
5. Create a marketing campaign suitable for your company
Taking surveys or prior research will make it easier to put together your marketing campaign. Start by defining your objectives, we recommend using the SMART methodology (Specific, Measurable, Achievable, Relevant and with a specific time).
Followed by this, define your target audience, this is who the campaign is aimed at.
Begin to implement the necessary strategies, such as advertising on social networks, events, product or service demonstrations, mailing, among more. Always remember to stick to a designated budget for the campaign.
Every campaign ends by analyzing the results of these actions, do it with your team, verify the processes and improve the areas of opportunity for future campaigns.
Any action to increase market share must consider high-impact pricing and sales strategies. For example, Valve – a video game company – offered a 75% discount on its Left 4 Dead game, and increased its sales by 1,470%.
A simple maneuver, similar to that of several companies that increased their market share exponentially, that you can also apply, although taking into account the specific characteristics of your business.
Keep in mind that, given the dynamics of the current market, you should focus on making processes more efficient and loyalty to the customers you already have. If you keep them happy, they will buy from you again and become ambassadors for your brand.