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Market share is an indicator of business success. The market share is the percentage of sales a company controls in the overall market. A company’s market share can be essential in judging how effective the revenue generation plans are, whether initiatives and campaigns are progressing as expected or if adjustments need to be made. Market share is also reliable in measuring the success of a business versus the competitors. Many companies focus internally on metrics such as brand awareness, leads, satisfaction, and loyalty, and while those are important, they are often misleading as they do not take into account the competitor’s performance, which may reveal that one business is performing below-par.
It is essential to focus attention on increasing market share to scale the company and increase the focus on profitability. A higher market share gives the company an edge over the competition. It allows the company to sell faster, produce higher volumes, achieve lower operational costs, and a quicker return on investment.
How to Increase Market Share
Increasing the business’ market share correlates directly with increasing the business’ sales. The business must implement new and additional strategies to help generate more sales than the competitor. How can they do that? This post will explain four ways.
Consumers will be able to identify the company’s products among similar items if a brand possesses distinguishing characteristics that set it apart from the competition. Having distinguishing characteristics such as a logo and unique design is crucial to establishing a niche as this serves as a part of the company’s brand identity and can lead to the perception of the product being of higher quality than the competition. If a customer can see the business’s mark on a product, and the brand is positioned to represent high-quality products, the customer will know what they are getting to inform their purchase decision.
Finding a customer need and fulfilling that need can also help the positioning of the brand. This provides the brand with a bit of exclusivity, which can help increase brand awareness and increase sales. For example, Elemis, a leading luxury skincare brand, is “unique in their positioning because of their philosophy, “Defined by nature, led by science.” This philosophy is what the brand’s story is built on. Elemis was one of the trendsetters in the clean beauty trend, with natural ingredients being the basis of their story since the 1990s.”
The branding strategy must include unique ideas to create a unique brand image and position to communicate to consumers. This unique brand strategy will help the brand attract new customers and maintain their existing customers.
A company can increase its market share through innovation. New technology not yet offered by competitors puts a business at a significant advantage in the market. Many consumers will switch from a brand they have loyalty to, to a more innovative brand in order to explore a new experience, many of those customers can result in loyal customers based on their experience which increases the brand’s market share. While the brand will maintain its distinguishing characteristics such as logo and design, updates must be applied to match the ongoing trends and times. An example of a brand using innovation as a competitive edge is Elemis, “Using cutting edge technology, Elemis has made amazing discoveries in the field of marine and plant medicinal therapy and has patented some of their principal and most common ingredients such as Padina Pavonica and the scientific innovation in developing their Tri-Enzyme technology. This makes the company unique as only Elemis can use these groundbreaking scientific discoveries.”
Building a relationship with customers is necessary for the company to protect and increase their market share. Engaging with customers and showing them the business values them by allowing them to engage and have input on the brand is an excellent way to maintain and increase market share. A brand can gather data from customers through surveys to find out what improvements they would like to see in terms of design, updates, and more. Working at Elemis, it is interesting to see how this can affect the customer’s loyalty to the company. Allowing customer’s input on whether or not they find the new packaging functional or asking them to suggest a new trending ingredient they would like the company to introduce. This not only allows the customers to feel a part of the company, thus protecting current customers from feeling the urge to jump ship, but it provides excellent insights. Positive customer relationships also help market share by word of mouth. Customers who are satisfied with their experience from a particular brand will frequently speak of it to friends and family who will become loyal customers.
The acquisition of a competitor is one of the surest ways of increasing market share. The acquisition allows the brand to tap into an existing customer base while reducing the competition. Larger companies are usually on the lookout for smaller companies that aligns with their products and services. This allows the larger company to gain a larger market share or expand their product offerings. “The company L’Occitane International, the leading manufacturer, and retailer of natural cosmetics has recently acquired the company, Elemis, thus increasing the company’s reach and digital presence from being primarily UK based to a more international scale.”
Increasing the market share of a business is a long and continuous process. By finding the company’s niche, employing unique brand strategies, innovating, implementing new technologies, keeping up with trends, trendsetting, developing relationships with customers, engaging with customers and acquiring smaller companies that align with the brand’s products and services, the most successful businesses today are increasing market share and maximizing on return on investment.